5493000HZTVUYLO1D793 2021-01-01 2021-12-31 5493000HZTVUYLO1D793 2020-01-01 2020-12-31 5493000HZTVUYLO1D793 2019-01-01 2019-12-31 5493000HZTVUYLO1D793 2021-12-31 5493000HZTVUYLO1D793 2020-12-31 5493000HZTVUYLO1D793 2019-12-31 5493000HZTVUYLO1D793 2018-12-31 5493000HZTVUYLO1D793 2019-01-01 2019-12-31 ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2019-01-01 2019-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2019-01-01 2019-12-31 ifrs-full:NoncontrollingInterestsMember 5493000HZTVUYLO1D793 2019-01-01 2019-12-31 ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2019-01-01 2019-12-31 ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2019-01-01 2019-12-31 ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2020-01-01 2020-12-31 ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2020-01-01 2020-12-31 ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2020-01-01 2020-12-31 ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2020-01-01 2020-12-31 ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2020-01-01 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2020-01-01 2020-12-31 ifrs-full:NoncontrollingInterestsMember 5493000HZTVUYLO1D793 2021-01-01 2021-12-31 ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2021-01-01 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2021-01-01 2021-12-31 ifrs-full:NoncontrollingInterestsMember 5493000HZTVUYLO1D793 2021-01-01 2021-12-31 ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2021-01-01 2021-12-31 ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2021-01-01 2021-12-31 ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:NoncontrollingInterestsMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2018-12-31 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember ifrs-full:NoncontrollingInterestsMember 5493000HZTVUYLO1D793 2019-12-31 ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2019-12-31 ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2019-12-31 ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2019-12-31 ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2019-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2019-12-31 ifrs-full:NoncontrollingInterestsMember 5493000HZTVUYLO1D793 2020-12-31 ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2020-12-31 ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2020-12-31 ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2020-12-31 ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2020-12-31 ifrs-full:NoncontrollingInterestsMember 5493000HZTVUYLO1D793 2021-12-31 ifrs-full:IssuedCapitalMember 5493000HZTVUYLO1D793 2021-12-31 ifrs-full:SharePremiumMember 5493000HZTVUYLO1D793 2021-12-31 ifrs-full:RetainedEarningsMember 5493000HZTVUYLO1D793 2021-12-31 ifrs-full:OtherReservesMember 5493000HZTVUYLO1D793 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5493000HZTVUYLO1D793 2021-12-31 ifrs-full:NoncontrollingInterestsMember iso4217:GBP iso4217:GBP xbrli:shares
Ann
ual R
epor
t
2
0
21
Content
s
Strategic repor
t
Ou
r busi
nes
s mode
l
01
202
1 per
formance summary
02
Chair’s
stat
ement
03
CEO
’
s st
atemen
t
05
Financial performance
07
Our long-
term priorities
1
0
Ou
r cultu
re
1
1
Key
performance indicators
1
2
Ou
r exte
rna
l envir
onme
nt
1
3
Innovation 1
7
Performance 29
T
rust 34
Consumer Healthcare
4
1
Stakeholder en
gagement
44
Risk management
46
Gr
oup ﬁn
anci
al rev
iew
55
Corporate governance
Th
e Boa
rd and G
SK Le
ade
rshi
p T
e
am
83
Ch
air’s G
overn
ance s
tate
ment
89
Board roles
and respon
sibilities
92
New ambitions for patie
nts
,
shareholders
and our people
Cautionary statement
See the
inside
back co
ver
of t
his docu
ment f
or the
cautionary stat
ement
regarding
forward-looking stat
ements.
Non-
IFRS measures
We use a n
umb
er of ad
jus
ted, n
on-
Inte
rna
tion
al Fi
nan
cia
l Repo
rt
ing St
and
ard
s (IF
RS) me
asu
res to r
epo
rt t
he per
fo
rma
nce o
f our bu
sin
ess
. T
ota
l repo
rt
ed
results represent
the Group
’
s o
verall
performance under IFRS. Adjusted
results and
other
non-IFRS measures may
be considered
in addition
to
, but
not
as a
su
bsti
tute f
or or su
per
ior to
, info
rmat
ion p
res
ente
d in acc
ord
anc
e wit
h IF
RS. A
djus
ted r
esul
ts an
d othe
r non-
I
FRS m
eas
ure
s are d
eﬁn
ed on p
ages 5
6 and 59 a
nd
re
con
cili
atio
ns to th
e nea
res
t IFR
S mea
sur
es ar
e on pa
ges 70 to 73
.
I
n 2
0
2
1, w
e made ma
j
or p
rogress on o
ur jo
ur
ney t
oward
s t
h
e most s
i
gn
iﬁcan
t
co
r
po
rat
e c
ha
nge f
o
r GSK i
n m
o
re t
han 2
0 y
ears
. W
e are on track to separate i
n
20
2
2 to cre
a
te two n
ew le
ad
i
n
g c
om
pa
n
i
es, bot
h wi
t
h t
h
e oppo
r
tu
n
i
t
y t
o i
m
pa
ct
h
u
man he
alt
h a
t sc
ale a
nd de
l
i
v
er co
m
pell
ing per
f
o
r
ma
nc
e f
o
r s
ha
re
h
o
l
ders.
GSK
G
S
K will unite science, talent and technology to
get Ahead of disease T
ogether
. We will prioritise
innovation in vaccines and specialty medicines,
maximising the increasing opportunities to prevent
and treat disease.
Step ch
ange in grow
th
–
E
xpe
cted sa
les gr
owth o
f more th
an 5% and ad
juste
d
ope
rating p
roﬁt g
row
th of mor
e than 1
0% on a
co
mpound b
asi
s 202
1
-26
–
R&D f
ocuse
d on the s
cienc
e of the im
mune sys
tem,
human
genetics
and adv
anced t
echnol
ogies
–
Pos
itivel
y impac
ting the h
ealt
h of more th
an 2.
5 billio
n
peo
ple over ten ye
ars
–
Le
ading ES
G per
form
ance to b
e maint
aine
d
W
e set out our new purpose, growth commitments
and R&D catalysts at an investor update in June 2021.
For more detail see gsk.com
Haleon
Haleon will be a global leader 1
00% focused on
consumer health. It will have a clear purpose to
deliver better everyday health with humanity
, and a
focused strategy to deliver sustainable ab
ove-market
growth and attractive r
eturns to shar
eholders.
Stro
ng prospec
ts for grow
th
–
E
x
ceptional port
f
olio of
category-leading brands with
attractive
global f
ootprin
t and
competitiv
e capabilities
–
C
ompe
lling st
rategy to ou
tper
for
m in a growi
ng, £1
5
0
bill
ion plu
s secto
r which i
s more r
elevant t
han ever
–
4-
6% annu
al org
anic s
ales g
row
th in the me
dium ter
m,
sustainable moderat
e margin
expansion and
high cash
conversion
–
At
tract
ive grow
th pro
ﬁle wi
th cap
acit
y to invest a
nd
deliver shareh
older ret
urns
W
e set out our strategy, capabilities and growth
ambitions at a Consumer Healthcare capital markets
day in February 2022. F
or more detail see gsk.com
Board committee informa
tion
93
Board archit
ecture
94
Board activity
95
Bo
ard pr
ogre
ss i
n 202
1
96
Board’s
approach t
o cont
inuous
engagement
99
Board-led pu
rpose and
cultu
re
102
Board performance
10
3
Board committee reports
10
4
Se
ctio
n 1
72 sta
temen
t
1
1
6
Directors’ report
1
1
7
Remuneration report
Chair’s
annual
statemen
t
1
20
Annual report on remuneration
1
25
2022 Re
mune
ratio
n poli
cy sum
mar
y
1
43
2022 Re
mune
ratio
n poli
cy re
por
t
1
44
Financial state
ments
Directors’
statemen
t of
responsibilities
1
54
Independent Audit
or’s
report
1
5
6
Financial sta
temen
ts
1
68
No
tes to the ﬁ
nanc
ial s
tatem
ents
1
72
Financial sta
temen
ts of
Gla
x
oSmithKline plc prepared
und
er UK G
A
AP
252
Investor
information
Quar
t
erly trend
258
Five-year
record
263
Product development
pipeline
269
Products, competition and
intellectual
propert
y
27
2
Pr
inci
pal r
isks a
nd unc
er
tai
ntie
s
275
Share capital
and share
price
288
Dividends 290
Financial calendar
20
22
29
1
An
nual G
ene
ral M
eeti
ng 2022
291
T
a
x inf
ormation f
or shareholders
292
Shareholder service
s
and contacts
294
US l
aw and re
gula
tion
296
Gr
oup co
mpa
nies
299
Gl
oss
ar
y of ter
ms
3
1
1
GS
K Ann
ual R
epor
t 2021
01
Strategic report
Governance and remuneration
Financial statements
Investor information
Our b
us
i
nes
s mo
del
A
s w
e pr
epa
r
e f
o
r a new future, we c
on
t
i
nue t
o h
el
p i
m
p
rov
e t
he h
eal
t
h of
h
u
ndred
s o
f m
ill
ions of peop
l
e arou
n
d t
he wo
r
l
d b
y d
iscov
ering, deve
l
op
i
n
g a
nd
man
ufacturing i
n
no
va
t
i
ve m
ed
i
ci
nes, vacc
i
nes a
nd c
o
nsum
er heal
t
h
care prod
ucts.
What we do
We develop a
nd deli
ver med
icine
s, vac
cine
s and co
nsume
r
healthcare products that impact
human health a
t scale. Our
operations span
the v
alue chain
from ident
ifying, researching,
devel
oping a
nd testi
ng grou
nd-br
eak
ing dis
coveri
es, to
regulat
ory approval, manufact
uring and
commercialisation.
Ce
ntra
l t
o our s
ucce
ss ar
e our peo
ple: expe
rt
s in scie
nce,
technology
, manufacturing, regula
tion, int
ellectual
propert
y
and commercialisation. W
e also
collaborate with
world-leading
exp
er
ts and for
m strate
gic pa
rtn
ersh
ips to com
plem
ent our
existing
capabilities.
The va
lue w
e create: n
o
w and in the future
Th
e greate
st cont
ribut
ion we ma
ke is to improve t
he hea
lth
of pe
ople a
round th
e world
. In 202
1 that in
clude
d deli
vering
1
.
7 billi
on medi
cine
s, over 767 millio
n vaccin
es
1
and 3
.
7 bill
ion
consumer healthcare products. Looking ahead, GSK has a
cle
ar amb
ition to p
ositi
vely im
pact th
e heal
th of more t
han
2.
5 billio
n peop
le over the n
ext te
n years
.
We create va
lue for s
hareh
older
s by inves
ting in ou
r busin
ess
to prov
ide sha
reho
lder re
turns
, and in 2021 we paid a d
ivid
end
of 80 p
ence p
er sha
re. We have made n
ew comm
itment
s
to grow
th an
d a step cha
nge in p
er
forma
nce over th
e nex
t
ﬁve ye
ars
.
We aim to be a mo
dern e
mployer, develo
ping ou
r peopl
e
and o
ffe
ring a br
oad ra
nge of be
neﬁt
s, inc
luding p
reventa
tive
he
althc
are se
rv
ice
s, that h
elp us at
trac
t and ret
ain the b
est
people.
We employ ove
r 90,0
00 pe
ople ac
ross 92 c
ountr
ies an
d work
dir
ectly w
ith 37
,50
0 supp
lier
s. In 2021 we paid £1
.3 bi
llion i
n
co
rpor
ation ta
x
, as well a
s a sign
iﬁc
ant amo
unt of othe
r
business and employment
-relat
ed taxes
.
Deliv
ering strategic transformation b
y pri
oritisin
g Inno
v
ation, Per
formance
a
n
d
Tr
u
s
t
In r
ecen
t years
, we have tra
nsfor
med GS
K to impr
ove
per
f
ormance, stren
gthen capabilit
ies and
prepare fo
r a
new fut
ure. W
e
ha
ve don
e this
by
prioritising Inno
vation,
Per
for
manc
e and T
rust – ac
ros
s the enti
re com
pany –
dri
ving a mu
lti-ye
ar pro
gramm
e to improve R
&D pro
ducti
vit
y
,
commercial execut
ion, Group struct
ure and
capital allocation.
Thi
s is unde
rpin
ned by a new cu
lture wi
th more a
mbiti
on and
accountabili
ty
.
Innovation
is cri
tica
l to how we impr
ove healt
h and cr
eate
ﬁna
ncia
l value. I
n 202
1
, our total R
&D exp
enditu
re was
£
5.3 bi
llion
, up by 3.
5% AER on 2020
. W
e have a robu
st
late-
stag
e R&D pip
eline w
ith ma
n
y as
sets h
a
vin
g the potent
ial to
be ﬁ
rst or b
est in c
las
s. We conti
nue to bel
ieve the ra
pid
convergence of
science and t
echnology in biopharmaceuticals
prov
ides s
igni
ﬁca
nt oppor
tun
ity a
nd is why ou
r R&D wil
l
co
ntinue to fo
cus on the s
cien
ce of the i
mmune sy
stem, hu
man
genetics
and use
of
advanced
techn
ologies.
Performance
i
s delive
red by inve
sting ef
fe
ctivel
y in our
bus
ines
s and our p
eopl
e and exec
uting c
ompet
itivel
y
. Our
abi
lity to l
aunch n
ew produ
cts suc
ces
sfu
lly and gr
ow sal
es fro
m
our ex
istin
g por
tfo
lio is key to our c
omme
rcia
l succ
ess
. Over t
he
nex
t ﬁve ye
ars
, with 2021 as a ba
se yea
r
, we expec
t GSK to
del
iver hig
hly at
tract
ive grow
th wi
th sale
s and ad
justed
ope
rating p
roﬁt o
f more th
an 5% and m
ore tha
n 1
0
%
respectively on a
compound basis.
Tr
u
s
t
unde
rpins eve
ry
thi
ng we do. We have main
taine
d
our acknowled
ged leadership
in en
vironmental,
social and
gover
nanc
e (ESG) iss
ues, d
emon
strated by o
ur sec
tor
-le
ading
pos
itio
n in the Dow J
ones S
usta
inabi
lity I
ndex an
d our lon
g-
st
anding l
eade
rshi
p in the Ac
ces
s to Medi
cine I
ndex.
W
e remain
deeply committed t
o addressing
the issues tha
t
mat
ter for th
e susta
inab
ilit
y of our co
mpany, incl
uding pr
icin
g
and a
cce
ss, g
lobal h
ealt
h, the env
ironm
ent, an
d inclu
sion a
nd
dive
rsit
y, w
ork
ing w
ith integ
rit
y and ca
re.
1
Including A
S
03 adjuva
nt sale
s
02
GS
K Ann
ual R
epor
t 2021
202
1 per
f
or
manc
e su
m
mary
Stro
ng com
m
erc
ial e
xecu
t
i
on drives grow
t
h ac
r
oss Pha
rm
a
ceu
t
i
cals, V
a
cc
i
n
es
an
d Co
nsum
er H
eal
t
hcare (
e
xcl
u
d
i
ng d
i
vestm
en
ts/
bran
ds under r
eview
)
–
£
34.
1 billion Group turnover stab
le a
t AER
, +
5% CER
–
P
harmaceutic
als £
1
7
.7 billion +
4
% AER
, +
1
0% C
ER; new and specialt
y medicines
£
1
0 billion +
2
0% AER
, +
26% C
ER
–
V
accines £
6.8 billion -3% A
ER, +
2% CER
–
C
O
VID
-
1
9 solutions sa
les £
1
.4 billion
–
C
onsumer Heal
thcare £9.6 billion -4% AER
, stable C
ER (
+4
% excluding brands dives
t
ed/under
revie
w
)
Cos
t d
isci
pl
in
e su
ppo
r
ts del
ivery of ad
j
ust
ed EP
S grow
t
h
–
T
otal EP
S 8
7
.6p -
2
4
% AER
, -
1
3
% CER
–
Adjus
t
ed EPS 1
1
3.
2
p -
2% AER
, +
9% CER; c
ontribution to gro
w
th from COVID
-
1
9 solutions +8%
AER
, +
9% CER
–
T
otal op
erating proﬁt £6.
2 billion -
2
0% AE
R, -9
% CER
–
Adjus
t
ed operating proﬁ
t £8.
8 billion -
1
% A
ER, +9% CER
–
Dividend of 80p
On t
ra
ck to crea
t
e two new l
ead
ing com
pa
n
i
es t
hroug
h dem
erger i
n mi
d-
20
22
–
New GS
K inv
estor update in June 20
2
1 set out our new purpose, grow
th commitments and R&
D
catalys
ts.
For detail s
ee gsk.c
om
–
C
onsumer Heal
thcare capi
tal markets day in Februar
y 202
2 highlighted our strategic prioritie
s, ke
y
grow
th drivers and detaile
d ﬁnancial information. F
or detail see gsk
.com
Co
n
t
i
n
u
ed mo
men
tu
m i
n R&D del
iv
er
y a
nd strengthen
ing of p
i
pe
l
i
ne
–
Th
ree major product ap
pro
vals; 8 phase II
I star
ts; 2
2 vaccines and me
dicines in pivotal trials
–
Strong pipe
line of 2
1 vaccine
s and 43 medicine
s, many of which of
fer pot
ential bes
t or
ﬁrst-i
n-class oppor
tu
nities for
patien
ts
–
20+ deals executed securing ac
cess to novel clinical progr
ammes including in immuno
-oncology
,
immuno-neurol
ogy and ﬂu, plus technologie
s tha
t expand our c
apabilities in human ge
net
ics a
nd
ar
tiﬁcial int
elligence/
machin
e learning (AI/
ML)
L
e
ad
i
n
g ESG per
fo
rm
a
nc
e
–
1
s
t in the pharmaceutic
al industr
y for Dow Jones Susta
inability Ind
e
x
–
1
s
t in the Access to Me
dicine Index
–
Gold recognition in S&P
’
s Su
stainability Y
e
arbook
–
A- in CD
P Climat
e Change
GS
K Ann
ual R
epor
t 2021
03
Strategic report
Governance and remuneration
Financial statements
Investor information
Chair’
s s
t
at
ement
GS
K has b
een del
iveri
ng a prog
ramm
e of funda
ment
al str
ategic
tra
nsfor
matio
n since E
mma st
ar
ted as C
EO ﬁve year
s ago,
de
signe
d to tack
le the ro
ot cau
ses of th
e comp
any’s long-te
rm
underper
f
ormance, including
on shareholder
returns.
Th
e Boar
d is ple
ased t
hat unde
r Emma’s lead
ersh
ip 202
1
saw f
urt
her pro
gres
s agai
nst the c
lear p
rior
ities s
et to enab
le
this:
improving the
pipeline and R&D productivity
, sharpening
commercial execut
ion and cost
discipline an
d tackling the
Group’
s structure
and capital allocation prioritie
s, underpinned
by a shi
ft i
n cultur
e.
Building on
the
signiﬁcant progress made o
ver t
his period,
I bel
ieve we are no
w ﬁrml
y on trac
k to demer
ge GS
K into
t
wo world-
cla
ss com
pani
es in mid
-
2022 – one foc
used
on ph
arma
ceuti
cals a
nd vacc
ines a
nd one fo
cused o
n
consumer healthcare.
2021 deliver
y
The Board remain
s focu
sed on en
suring GSK’
s fun
damentals
co
ntinue to be e
nhanc
ed to ens
ure both c
ompa
nies a
re full
y
co
mpetit
ive at the po
int of sp
lit.
Whi
le the C
O
VI
D
-
1
9 p
ande
mic con
tinued to m
ean a hi
ghly
dyn
amic o
perati
ng envir
onmen
t, the B
oard wa
s plea
sed th
e
co
mpany exc
eede
d its ea
rning
s per sh
are gui
danc
e set at
the s
tar
t of the ye
ar
. This w
as achi
eved thro
ugh over-de
liver
y
across the business, including ex
cellent commercial ex
ecution
in key ma
rkets an
d thera
py area
s, s
howing o
ur abili
ty to
co
mpete and g
row mar
ket shar
e. The B
oard wa
s als
o plea
sed
to see t
he comm
erci
al per
for
manc
e and pat
ient im
pact of
Xev
udy
, our le
ading m
onocl
onal a
ntibod
y for
CO
VID
-19
devel
oped th
rough o
ur par
tner
ship w
ith Vi
r Biotec
hnolo
gy
.
Savi
ngs pro
gram
mes an
nounc
ed in ea
rly 2020 have de
livere
d
and
, as a re
sult
, GSK
’
s cos
t bas
e is now co
mpetit
ive vers
us
our p
eers
. Cap
ital a
lloc
ation pr
iori
ties a
re cle
ar – to inves
t in
the R&
D pipe
line, n
ew produ
ct laun
ches
, and de
liver
ing retur
ns
to shareholders.
We have made c
onsid
erab
le adva
nces o
n our dis
tinct
ive
app
roach to R
&D bas
ed on th
e scie
nce of the i
mmune s
ystem,
hum
an gene
tics a
nd advan
ced tec
hnolo
gies u
nder our C
hief
Sci
enti
ﬁc Of
ﬁc
er (CSO) Ha
l Barr
on. T
o
ny W
ood wi
ll tran
sitio
n
into th
e role of C
SO fro
m Augus
t as pa
rt of a c
aref
ully
considered succession plan and will
build
on the
signiﬁcant
progress already made. T
on
y is o
ne of
the w
orld’
s leadin
g
che
mists a
nd has a
n impr
ess
ive trac
k reco
rd of me
dicine
devel
opmen
t over his 30
-ye
ar car
eer in t
he UK an
d US.
Pr
ogre
ss was s
tar
ted to be re
ﬂec
ted in the s
hare pr
ice
per
fo
rmanc
e duri
ng 202
1
. H
owever
, the B
oard (and
management
) recognise t
hat sustaini
ng this
ov
er the
long t
erm
will depend
on consisten
t performance, delivery and further
strengthened
competitiv
eness.
T
arg
ets for sus
taine
d per
formance
As we
ll as pe
rfo
rman
ce in-ye
ar
, the B
oard ma
inta
ins a cle
ar
foc
us and over
sigh
t of the co
mpany’s str
ategy an
d plans to
separate
which is proposed,
subject t
o shareholder
approval,
to hap
pen in mi
d-202
2.
At the i
nvestor up
date in Jun
e 202
1
, th
e purp
ose an
d strateg
y
of new G
SK was s
et out a
nd clea
r per
for
manc
e targ
ets for
sa
les an
d oper
ating pr
oﬁt ma
rgin grow
th
, begin
ning in 2022,
were c
ommu
nicate
d. If ac
hieved
, these wo
uld rep
rese
nt top
quartile per
formance
in our
sector
. Similar stret
ching ambit
ions
are being set
for the
consumer health business.
Of c
our
se, ma
nagem
ent must n
ow deli
ver agai
nst the t
arget
s
set
. And we a
re cle
ar remu
nerati
on mus
t be tied to e
nhanc
ing
sha
reho
lder val
ue. As s
uch, we a
re link
ing exec
utive
remuneration
to
reward
for out
performance. Fur
ther
details o
f
the
se pro
posa
ls are l
aid out l
ater in thi
s repor
t an
d there w
ill be
a cha
nce for s
hare
holde
rs to vote on th
em at our AGM i
n May.
In a
dditio
n to what new G
SK do
es, th
e Boar
d is full
y focus
ed on
how th
e compa
ny oper
ates, t
hrough a c
lear a
genda f
or ESG
(
envi
ronme
ntal, s
ocia
l, gover
nanc
e
) l
eade
rshi
p. GSK h
as a
str
ong tra
dition to b
uild on i
n these a
rea
s inclu
ding ma
xim
ising
acc
es
s t
o med
icine
s acro
ss the wo
rld and e
nsuri
ng fur
ther
progress on these ma
tters will be
a priority
.
W
e made sign
iﬁcan
t p
rogress towards demergi
ng GSK i
n
to two
le
ad
i
n
g a
nd c
om
pet
i
t
i
v
e co
mpa
n
ies i
n m
i
d-
20
22.
0
4
GS
K Ann
ual R
epor
t 2021
Shareholder
engagement
and Boar
d trans
ition
Through this
period of
considerable transition,
the Board and
management
hav
e mai
ntained v
ery signiﬁcant engagement
wit
h shar
ehold
ers
. It is cl
ear fr
om this th
at, the va
st ma
jorit
y
sup
por
t the str
ategy a
nd dire
ction th
e comp
any is ta
king
, and
are clear there
should be
no dist
raction from
sustained delivery
.
Thi
s mes
sage h
as bee
n hear
d by the Bo
ard wh
ose
acc
ount
abili
ty ﬁr
st and fo
remo
st is to act i
n the inter
ests
of all shareholders.
A key par
t of th
is str
ategy is th
e sepa
ration o
f Cons
umer
Healthcare, where there is
a broad
base of support among
shareholders for direct ownership of this outstanding business
thro
ugh a dem
erge
r
. O
f cou
rse
, the GS
K Boar
d has a ﬁ
ducia
ry
dut
y to rema
in ope
n to consi
der al
ternati
ve prop
osal
s to
demerger tha
t could crea
te
superior value
for
shareholders,
but n
o such pr
opos
als have be
en rec
eive
d to date.
We are now in t
he ﬁnal s
tage
s of cre
ating wh
at will b
e an
exceptional
company
and I’m
delight
ed with
the designa
te
app
ointm
ents of Si
r Dave Lewi
s to lead th
e Boar
d and Br
ian
Mc
Nam
ara a
s CEO. W
e stro
ngly be
lieve the n
ew comp
any
of
fer
s an attr
acti
ve proﬁ
le for pro
spec
tive inve
stors
, as re
ﬂecte
d
by the g
rowt
h outlo
oks set o
ut at the c
apita
l marke
ts day in
Februar
y
202
2.
As we m
ove close
r to sepa
ration
, we are al
so con
tinuin
g t
o
asses
s
the
skills, capabilities an
d experience
the GSK Board
wil
l need a
s a pure bi
opha
rma bus
ines
s. I wa
s delig
hted to
welc
ome A
nne Be
al to the Bo
ard in M
ay
. Anne b
ring
s exten
sive
healthcare experience as a doctor and
entrepreneur combined
wit
h a pas
sion fo
r patien
t advoc
acy
. In J
anuar
y, Dr Ha
rr
y (Hal)
C Di
etz, j
oined t
he Boa
rd. Ha
l is a worl
d-le
ading ex
per
t in
hum
an gene
tics a
nd Prof
ess
or of gene
tic med
icine at t
he John
s
Ho
pkin
s Univer
sit
y Scho
ol of Me
dici
ne in the U
S. I am c
onﬁd
ent
that w
ith the
se app
ointme
nts, a
nd the co
ntinue
d input o
f Hal
Ba
rron fr
om Augu
st as a N
on-E
xec
utive B
oard D
irecto
r
, the
scientiﬁc credent
ials of
GSK’s
Board are n
ow am
ong th
e
str
onges
t in the in
dustr
y.
I als
o want to ta
ke this opp
or
tunit
y to thank Lynn E
lsen
hans
,
who w
ill be s
tepping d
own at the s
epar
ation of t
he cons
umer
he
alth bus
ines
s in mid
-
2022. Lynn ha
s made an o
utst
anding
co
ntribu
tion to the B
oard a
nd the deve
lopme
nt of cur
rent
str
ategy over te
n years
, inc
luding n
otabl
y as Ch
air of the
Corporate Respon
sibility Committee, which
is i
ncreasingly
at the c
entre o
f the Boa
rd’s work
. She wi
ll be mis
sed by a
ll
on th
e Boar
d.
Fi
nally, I would li
ke to thank al
l employe
es, p
ar
tner
s,
shareholders and customers for
their support and commitment
thro
ugh the l
ast ye
ar and I lo
ok for
ward to w
hat pro
mise
s to be
an exc
iting 2022 for G
SK
.
Sir Jonathan Symonds
Chair
Chair’s
statement
co
ntinued
GS
K Ann
ual R
epor
t 2021
05
Strategic report
Governance and remuneration
Financial statements
Investor information
CEO’
s s
tatement
I am ver
y pl
eas
ed to repo
rt t
hat in 202
1
, GSK d
eliver
ed
strong operat
ional performance and pipeline
progress. At
the same time,
we complet
ed our m
ulti-year programme o
f
far reaching
transformation
to
tackle long-standing issues
impacting the
company’
s success.
We are now re
ady to de
liver th
e most si
gniﬁ
cant c
orp
orate
cha
nge for G
SK in 20 ye
ars: cre
ating t
wo new, excepti
onal
co
mpani
es wit
h ambit
ious ta
rgets f
or grow
th and w
ith a cle
ar
pur
pose to p
ositi
vely im
pact th
e heal
th and live
s of bill
ions
of people.
2021 performance provides momentum
Gr
oup sa
les wer
e £34 b
illio
n in 202
1
, u
p 5% CER
. Our
pro
ducts m
eani
ngfull
y help
ed patie
nts acr
oss a r
ange of
dif
f
erent disease area
s, including
respiratory, immuno-
inﬂammation, oncology and HIV
; prot
ected people
from viruses
like sh
ingle
s and me
ningit
is; prevente
d hospi
tali
satio
ns and
de
aths fro
m COVI
D-
1
9; and h
elpe
d improve o
ral he
alth,
red
uce pa
in and tr
eat ever
yday ai
lments
.
Strong o
perational performance enabled us t
o i
ncrease
inves
tment i
n R&D to £
5.3 bi
llion a
nd to rea
lise ea
rnin
gs per
sha
re in exc
ess of ex
pec
tation
s for the ye
ar
. In add
ition
, we
gen
erated ove
r £4.
4 billi
on of fre
e cas
h ﬂow, suppo
rti
ng
inves
tment
s and a div
iden
d of 80 pen
ce per s
hare fo
r the yea
r
.
Th
e improve
ments we have m
ade to our c
ommer
cial exe
cuti
on
and c
ost ba
se, to
gether w
ith str
ength
ening p
or
tfoli
o and
pip
eline
, mean we n
ow have mome
ntum to deli
ver a step
-
cha
nge in gr
owth s
tar
ting i
n 2022.
Accelerating our inno
vation
We conti
nue to beli
eve the ra
pid conve
rgenc
e of sci
ence
and technology
in biopharmaceuticals provides signiﬁcant
opp
or
tunit
y for GS
K. I
t is why ou
r R&D wi
ll conti
nue to focu
s
on th
e scien
ce of the i
mmune sy
stem, hu
man ge
netic
s and
use of a
dvanced t
echnologies. This approach
is deliv
ering
improvements in
R&D and our
pipeline.
In th
e las
t 1
2 mont
hs, we re
por
ted reg
ulator
y app
rovals
for th
ree new me
dici
nes, i
nclud
ing the ﬁ
rst-ever l
ong-ac
ting
inj
ecta
ble Pr
EP tre
atment o
ption fo
r HIV, as well a
s sta
rti
ng
eig
ht pha
se II
I clin
ical t
rial
s. We curre
ntly have 22 a
sset
s in
pivo
tal cli
nica
l studi
es at the ti
me of rep
or
ting. We als
o
co
nclud
ed more t
han 20 de
als wit
h exte
rnal p
art
ners
, sec
uring
acces
s
to
nov
el clinical programmes in oncology
,
neurology
and H
IV; as wel
l innovati
ve t
ech
nolog
ies
, notab
ly thro
ugh
further expansion
of our
capabilities
in hum
an genet
ics,
functional genom
ics and use o
f artiﬁcial intelligence.
These achiev
ements
spearhead a
strengthen
ing pipel
ine,
2
1 vac
cines a
nd 43 me
dicin
es now in c
linic
al devel
opmen
t –
many o
f which h
ave the potent
ial to be ﬁ
rst or b
est-in
-cla
ss.
Of c
our
se, one p
rior
ity h
as bee
n to contr
ibute so
lutio
ns to the
COV
ID
-
1
9 pand
emic. We have su
cce
ssf
ully devel
oped a n
ew
monoclonal an
tibody
treatment,
Xevu
dy
, with ou
r par
tner
s Vir
Bi
otechno
logy. Thi
s medic
ine ha
s proven ef
fec
tive aga
inst
mult
iple va
riant
s, inc
luding O
micr
on, an
d we are now se
curi
ng
rapid regulat
ory approvals
worldwide. Through
our a
djuvant
par
tn
ersh
ips, we s
tand r
eady to s
upply n
ew vaccin
es whe
n their
dat
a read
s out. M
ore br
oadly, we are a
lso inc
rea
sing inve
stmen
t
in ou
r mRN
A cap
abilit
y – this m
ajor n
ew plat
form now va
lidate
d
by t
he pandem
ic.
Neve
r has the r
ole of vac
cine
s been m
ore wi
dely ap
prec
iated or
und
ersto
od by the wor
ld than r
ight now, and th
e oppo
rtu
nity fo
r
GS
K to protec
t peop
le and de
liver gr
owth i
n a broad r
ange o
f
vaccines remains
very signiﬁcant.
Mu
ch of the pr
ogre
ss we have se
en in R&
D over the la
st four
yea
rs is du
e to the outs
tandi
ng lea
ders
hip of Ha
l Bar
ron, ou
r
C
SO. In Aug
ust, h
e will ha
nd over re
spons
ibili
ty to T
o
ny W
ood,
who h
as be
en a key par
tne
r t
o Ha
l. T
ony i
s an outs
tand
ing
sci
entis
t, and w
ith his d
eep exp
er
tise in s
cien
ce, dat
a and new
tech
nolog
ies
, is per
fec
tly pla
ced to ta
ke over and c
apture t
he
valu
e and opp
or
tuniti
es we see w
ith GS
K’s R&D a
pproa
ch.
We are al
so deli
ghted that H
al wil
l rema
in par
t of GS
K as a
No
n-E
xecu
tive Boa
rd Dir
ector.
New purpos
e and new ambitio
n
With the
demerger of
Consumer Healthcare, we wi
ll establish a
new GS
K
, purel
y focus
ed on bi
ophar
mace
utic
als
. Las
t year, we
ann
ounce
d a new pur
pose a
nd new grow
th am
bitio
ns for thi
s
n
ew
co
m
pa
n
y.
GS
K’s new pur
pose i
s to unite sc
ience
, tale
nt and tec
hnolo
gy
to get A
head of d
isea
se T
o
gethe
r
. W
e will do t
his by pri
oriti
sing
innovat
ion in va
ccines and specialt
y medicines, maximis
ing
opp
or
tuniti
es to preven
t and tre
at dise
ase
. Our aim i
s to
pos
itive
ly impa
ct the he
alth of m
ore tha
n 2.5 bi
llion p
eopl
e over
the ne
xt ten ye
ars
, deli
ver stro
nger a
nd more s
usta
inabl
e return
s
to sha
rehol
ders
, and b
e a comp
any wher
e outs
tandi
ng
people thrive.
We have set our
sel
ves amb
itious ﬁ
ve-ye
ar sa
les and o
pera
ting
pro
ﬁt co
mpound
ed grow
th ta
rgets
, of mor
e than 5% a
nd more
tha
n 1
0
% resp
ecti
vely. By 2031
, we a
im to deli
ver more t
han
£
33 bill
ion in an
nual s
ales – t
his, f
rom sa
les of ex
istin
g late-
st
age pip
eline a
sset
s, wi
th no cont
ribut
ion yet inc
lude
d from
ea
rly-s
tage a
sset
s or futu
re busi
ness d
evelop
ment. T
hes
e
ta
rgets re
pres
ent a new l
evel of amb
ition fo
r GSK a
nd would
deliver t
op-quartile sector performance.
We are emb
eddi
ng thes
e comm
itment
s deep
ly in the c
ompa
ny
,
inc
luding i
n ince
ntive pr
ogram
mes
, to drive fo
cus and a
ction
.
W
e ended 2
02
1 strongl
y
, and w
e en
t
er 20
2
2 wi
t
h go
od mo
men
tu
m.
T
h
is is go
i
n
g t
o be a la
nd
mark year f
or t
he com
pa
n
y
.
0
6
GS
K Ann
ual R
epor
t 2021
A cultur
e for per
formance an
d suppor
t to succe
ed
I str
ongly b
elieve GS
K shou
ld be a co
mpany w
here pe
ople
ca
n thrive
. Cre
ating the r
ight cu
lture to do th
is and to de
liver
our n
ew purpo
se and p
er
forma
nce a
spir
ations i
s a prior
ity fo
r
me an
d my team. We ar
e focus
ed on GS
K bein
g a place w
here
people are ambitious f
or patien
ts, accountable for impact
and
do th
e right th
ing.
We also have a
n enor
mous re
spon
sibili
ty to ins
pire a
nd supp
or
t
our p
eople to s
ucce
ed. We con
tinue to lo
ok for ways to inves
t
in ou
r peopl
e’
s grow
th and d
evelopm
ent and to h
elp them
bal
ance t
heir wor
k and pe
rson
al live
s. Th
is incl
udes a s
trong
foc
us on man
ageme
nt ski
lls, tr
aini
ng and su
ppor
t for me
ntal
he
alth an
d wellbe
ing, a
s well as th
e heal
th and s
afety o
f all
who wo
rk at GS
K.
L
ast ye
ar
, we put in p
lace ad
ditio
nal new pr
ogra
mmes to
sup
por
t thes
e prio
ritie
s and we ar
e comm
itte
d t
o devel
oping
mor
e. The s
ame is t
rue for o
ur appr
oach to inc
lusi
on, equ
ity
and d
ivers
ity. We have made go
od pro
gres
s agai
nst our
2025 as
pirati
onal t
arget
s for fema
le and et
hnic
ally di
verse
rep
rese
ntati
on in sen
ior rol
es. We are a
lso ta
king s
teps to
ens
ure our c
linic
al tri
als are r
epre
sent
ative of the p
atient
s
we aim to h
elp.
E
SG leade
r
Op
eratin
g resp
onsib
ly is co
re to GS
K. O
ur aim is to c
ontinu
e
to
deliver sect
or
-leading
ESG performance – as recognised
in ou
r latest r
anki
ngs in th
e Dow Jon
es Sus
taina
bilit
y In
dex,
the Ac
ces
s to Med
icine I
ndex a
nd Anti
-Mi
crob
ial Re
sist
ance
benchmark. This reﬂects progress across our
six core ESG
areas: En
vironmen
t, Access, Global Health, Inclusion
and
Di
versi
ty, Prod
uct Gove
rnan
ce, Eth
ics
. All of th
ese have c
lear,
lon
g-term go
als and a
mbiti
ons, b
ut we are n
ot comp
lace
nt and
we want to g
o fur
ther.
We set ca
rbon n
et
-
zero a
nd nature p
osit
ive goal
s in 2020 and
,
recognising the increasing need and impor
tance t
o provide
inves
tors
, and oth
er sta
kehold
ers
, with evi
denc
e of tang
ible
ESG p
er
forma
nce, we a
re devel
oping n
ew meas
ures a
nd
rep
or
ting. Valid
ated by thir
d par
tie
s and our ow
n audit te
ams
,
we wil
l share t
his wit
h investor
s later th
is year. I hope i
t will
further demonstrate
our commit
ment t
o best
-in-class ESG
per
f
ormance and transparent
reporting.
Haleon – a ne
w wor
ld-leading consumer
health company
Haleon is a compell
ing prospect. Completely
dedicat
ed to
consumer health, and with
a world-class port
folio
of cat
egor
y-
le
ading br
ands
, it of
fer
s an att
racti
ve prop
ositi
on. It b
rings d
eep
human understanding
toget
her with
trusted science
– t
o deliv
er
bet
ter ever
yday he
alth w
ith huma
nit
y
. It wil
l be a world l
eade
r
and
, as a new s
tand
alone c
ompa
ny
, will of
fer p
rospe
ctive
inves
tors a hi
ghly at
trac
tive ﬁna
ncia
l proﬁ
le of above
-mar
ket
sa
les gr
owth
, sust
aina
ble mar
gin exp
ansio
n and hig
h cas
h
generation.
It w
ill have a fan
tas
tic lea
ders
hip tea
m, led by C
EO desi
gnate
Br
ian M
cNam
ara
, and a B
oard l
ed by Sir Dave L
ewis wh
o
brings a w
ealth of
int
ernational
consumer sector
experience.
The creation
of Haleon reﬂects successful delivery of a
series
of pr
ogre
ssive s
trategi
c moves we too
k over the la
st few yea
rs
.
Altogether
, we estimat
e t
hat t
hrough a
cquisitions, int
egrations
of
new bu
sine
sse
s and tar
geted di
vestm
ents
, close to £1
5 billi
on
of val
ue has b
een cr
eated in th
is busi
nes
s.
It i
s now time fo
r share
hold
ers to ac
ces
s that valu
e and inve
st
in wh
at we beli
eve will be a s
trong
, highl
y succ
ess
ful grow
th
-
orientat
ed business, capable o
f deliv
ering s
ustainable
per
f
ormance and ret
urns.
2022 is a l
andmark year
Th
e pande
mic ha
s shone a s
potli
ght like neve
r before o
n the
dif
fer
ence o
ur indus
tr
y can ma
ke to soci
ety. T
o se
e how our
peo
ple – sc
ienti
sts, f
actor
y team
s, sup
ply exp
er
ts, th
ose wh
o
work with
healthcare professionals
,
and man
y thousands of
othe
rs – have ri
sen to the c
halle
nge of en
surin
g patien
ts and
peo
ple in a
ll par
ts of th
e world c
ontinu
e t
o rec
eive th
e produ
cts
they ne
ed ha
s been d
eepl
y inspir
ing. I
t reﬂ
ects th
e ver
y deep
commitment that
people working a
t GSK hav
e for
the people
we ser
ve a
nd for eac
h other.
Our p
eopl
e are the r
eas
on why GS
K and H
aleon w
ill be
suc
ces
sful i
n year
s to come
. I want to than
k them for a
ll they
have ach
ieved in 2021 and the m
oment
um they ar
e delive
ring.
I am exc
ited and o
ptimis
tic for th
e futur
e. 2022 will be a
lan
dmar
k year for G
SK an
d we are co
mmit
ted to thos
e who
rel
y on us an
d excited by w
hat we ca
n achieve tog
ether.
Emma Walmsley
Chi
ef E
xecuti
ve Of
ﬁc
er
CEO's statement
conti
nued
GS
K Ann
ual R
epor
t 2021
07
Strategic report
Governance and remuneration
Financial statements
Investor information
Finan
cial per
formanc
e
Finan
cial result
s
2021
£m
£%
Growth
CE
R%
T
urnover
3
4
,
114
–
5
T
otal operating proﬁt
6,
201
(20)
(9)
T
otal earnings per share
8
7.
6
p
(24)
(13
)
Adjusted operating proﬁt
8,806
(1)
9
Adjusted earnings per share
113
.
2
p
(2)
9
Net cash from operating activities
7,
9
5
2
(6)
Free cash ﬂow
4,
437
(18
)
T
u
rnove
r
St
rong co
mmerc
ial execu
tion d
rives grow
th a
cross
Pharmaceu
ticals
,
Vaccines and Consumer Healt
hcare
(ex
clu
ding bra
nds dives
ted
/
under rev
iew
)
Gr
oup turn
over was £
34,
1
1
4 millio
n in the yea
r
, stab
le at AER
but u
p 5% CER
. Sa
les of C
OVID
-
1
9 solu
tions (sa
les of
Xevurdy
and pandemic
adjuvant
) cont
ributed
approximat
ely 4
percentage
poi
nts to grow
th in th
e year.
Ph
armac
euti
cal tur
nover in th
e year wa
s £
1
7
,7
29 milli
on, up
4% AER a
nd 1
0
% CER
. Sa
les of
Xe
vud
y
, the
monoclonal
anti
body t
reatme
nt for C
O
VI
D-
1
9 of £
958 mi
llion c
ontri
buted
approximat
ely 6
percentage point
s t
o t
otal Pharmaceuticals
grow
th.
V
acc
ines tu
rnover wa
s £6,77
8 milli
on in the ye
ar
, down
3% A
ER but up 2
% CER
, pri
mari
ly drive
n by pand
emic
adj
uvant s
ales
, par
tia
lly of
fset b
y lower dem
and for r
outine
adult v
accination
due t
o CO
VID
-
1
9 vaccination
programme
deployment
and disease circula
tion across reg
ions. V
accines
tur
nover exclu
ding pa
ndemi
c vacci
nes de
crea
sed 9
% AER
,
5% CE
R to £6,
33
1 mill
ion.
Co
nsume
r Hea
lthc
are tur
nover was £
9,607 milli
on, dow
n
4% AER b
ut rema
ined s
tabl
e at CER re
ﬂec
ting dilu
tion fr
om
dive
stme
nts given t
he com
pletio
n of the po
rt
folio r
ation
alis
ation
at the e
nd of Q
1 202
1
. Sale
s exclud
ing bra
nds di
vested
/
unde
r
revi
ew decr
eas
ed 1
% AER but i
ncre
ased 4% C
ER reﬂ
ecti
ng
the underlying
strength
of brands
across the portfolio and
cate
gori
es and c
ontinui
ng grow
th in e
-com
merc
e.
Operating performance – 202
1
T
u
rnove
r
2021
£m
Growth
£%
Growth
CE
R%
Pharmaceuticals
17,
7
2
9
4
10
V
accines
6,
778
(3)
2
Consumer Healthcare
9,
607
(4)
–
Group turnover
3
4
,
114
–
5
Oper
ating proﬁ
t
T
o
tal op
eratin
g proﬁ
t was £6
,20
1 mill
ion co
mpare
d with
£7
,7
83 mi
llion in 2020
. This pr
imar
ily re
ﬂecte
d an unfavou
rabl
e
co
mpari
son to the n
et proﬁ
t on dis
posa
l in Q2 2020 of H
orli
cks
and o
ther C
onsum
er bra
nds and r
esul
tant s
ale of sh
ares i
n
Hin
dust
an Unil
ever
. This wa
s par
tly o
ff
set by lower m
ajor
restructuring costs, low
er re-measurement charges
on the
co
ntinge
nt cons
ider
ation li
abili
ties an
d the unwi
nd in 2020 of
the fa
ir mar
ket value u
plif
t on inven
tory a
risi
ng on co
mpleti
on
of the C
ons
umer He
alth
care J
oint Venture w
ith P
ﬁzer.
Adj
usted op
erati
ng proﬁ
t was £
8,8
06 mil
lion, 1% lower tha
n
2020 at AE
R, bu
t 9% hig
her at CE
R on a turn
over incr
eas
e of
5% CE
R. T
he Adju
sted op
erati
ng margi
n of 25.8
% was 0.
3
percentage points
low
er at
AER, 0.9 percentage points
higher
on a C
ER bas
is than i
n 2020. The i
ncrea
se in Ad
juste
d
operating pr
oﬁt primarily reﬂected
the beneﬁt fro
m incremental
pan
demic s
ale
s, sa
les gr
owth i
n Pha
rmac
eutic
als an
d tight
co
ntrol of o
ngoing c
osts
, favour
able le
gal se
ttle
ments a
nd
beneﬁts from continued restructuring
across the business.
Thi
s was of
fs
et by lower s
ales i
n V
accin
es, hi
gher s
upply c
hain
co
sts in Vacci
nes and C
ons
umer H
ealth
care
, dives
tment
s in
Co
nsume
r Hea
lthc
are and i
ncre
ased i
nvestm
ent in R&
D acros
s
V
accines and Pharmaceuticals.
Earnings pe
r
share
T
o
tal EP
S was 87
.6p, c
ompa
red wi
th 1
1
5.5
p in 2020. Thi
s
pri
mari
ly reﬂ
ected a
n unfavour
able c
ompar
ison a
s 2020
ben
eﬁted f
rom the n
et proﬁ
t on dis
posa
l of Hor
licks a
nd rel
ated
tra
nsac
tions
, par
tly of
fs
et by a cre
dit of £
397 millio
n to T
a
xatio
n
in 2021 resu
lting fr
om the reva
luatio
n of defe
rred t
ax a
sse
ts,
lower
major restructuring
costs and
lower
re-measurement
charges on the
contingent
consideration
liabilities. Adjust
ed
EP
S was 1
1
3
.2p co
mpar
ed with 1
1
5.9p i
n 2020, down 2
%
AE
R but up 9% C
ER
, on a 9% C
ER inc
rea
se in Adju
sted
operating pr
oﬁt primarily reﬂecting
incremental pandemic
sales,
sa
les in
crea
ses in P
har
mace
utica
ls, ti
ght co
st cont
rol and
favour
able l
egal s
ettl
ement
s and lower i
nteres
t cos
ts, pa
rtl
y
of
fse
t by lower sa
les in Vacc
ines
, highe
r suppl
y chai
n cost
s in
V
acc
ines
, incr
eas
ed R&D i
nvestme
nt and a hi
gher ef
fec
tive
tax rate
.
C
ash ﬂ
ow
Th
e net ca
sh inﬂ
ow from op
erati
ng acti
vitie
s for the ye
ar
was £7
,
952 millio
n (
2020 – £8
,44
1 millio
n
). The de
crea
se
primarily reﬂected a
dverse ex
change impacts, in
creased trade
rec
eiva
bles
, adver
se tim
ing of retu
rns an
d rebate
s (R
AR) and
increased separa
tion costs,
partly offset by
impro
ved
adjust
ed
ope
rating p
roﬁt a
t CER an
d reduc
ed ta
x paym
ents in
cludi
ng ta
x
on disposals.
0
8
GS
K Ann
ual R
epor
t 2021
T
ot
al an
d Adjuste
d result
s
Intangible asset amort
isation and i
mpairment
Amor
tisat
ion of
intangible
assets excludes
computer so
ft
ware
and c
apit
alis
ed devel
opmen
t cost
s. Im
pair
ment of in
tangi
ble
as
sets (exclud
ing com
puter so
ft
ware) and go
odwi
ll.
Major r
estru
cturing
Ma
jor re
stru
cturin
g cost
s, wh
ich inc
lude im
pair
ments of t
angib
le
assets and comput
er software, (
under speciﬁc Board appro
ved
pro
gram
mes that a
re str
uctur
al, of a s
igniﬁ
can
t scal
e and wh
ere
the c
osts of i
ndivi
dual o
r related p
roje
cts exce
ed £25 mil
lion),
including
integra
tion costs f
ollowing
mat
erial acquisitions.
T
ransac
tion-re
lated
T
ransaction-related accountin
g or o
ther adj
ustments rela
ted
to
signiﬁcant acquisitions.
Dives
tment
s, s
igniﬁc
ant lega
l and other i
tems
Proceeds and
costs of
disposal o
f associat
es, product
s and
businesses;
signiﬁcant settlement
income
; sign
iﬁcant legal
cha
rges (net o
f insur
ance r
ecover
ies) and exp
ense
s on the
set
tlem
ent of li
tigati
on and gove
rnmen
t investi
gatio
ns; other
ope
rating i
ncom
e other th
an royal
ty inc
ome, a
nd other i
tems
inc
luding t
he impa
ct of the r
evaluati
on of defe
rred t
a
x ass
ets
and l
iabil
ities f
ollowi
ng enac
tment of t
he incr
eas
e in the he
adline
rate of U
K cor
pora
tion ta
x fr
om 1
9
% to 25% (
ef
fecti
ve 2023
).
Separation cost
s
Additional costs
to
establish Consumer Healthcare as an
independent business
,
as well as admission listing and
demerger costs.
T
otal reported results represent t
he Group
’
s o
verall
per
f
ormance.
GS
K also u
ses a num
ber of ad
juste
d, non-
IF
RS, m
eas
ures to
rep
or
t the per
for
manc
e of its bu
sine
ss. A
djuste
d resu
lts and
other n
on-I
FRS
measures may be
considered in
addition t
o,
but n
ot as a sub
stitu
te for or sup
erio
r to, infor
mation p
rese
nted
in ac
cord
ance w
ith I
FRS
. Adjus
ted res
ults ar
e deﬁn
ed below
and o
ther non
-I
FRS me
asu
res ar
e deﬁn
ed on pag
e 59.
GS
K beli
eves that Ad
justed r
esul
ts, wh
en con
sider
ed
toget
her wi
th T
ota
l res
ults, p
rovid
e investor
s, an
alyst
s and
other stakeholders with
helpful complementary information
to
understand be
tter t
he ﬁnan
cial performance and
positio
n
of the G
roup f
rom per
iod to pe
riod
, and all
ow the Gr
oup’
s
per
fo
rmanc
e to be mor
e eas
ily com
pare
d again
st the ma
jori
ty
of it
s peer c
ompan
ies
. Thes
e mea
sure
s are al
so use
d by
man
ageme
nt for pla
nning a
nd rep
ort
ing pur
pose
s.
Th
ey may not be di
rectl
y comp
arab
le with s
imila
rly de
scr
ibed
me
asur
es use
d by other c
ompan
ies
.
GS
K enco
urage
s investo
rs and a
nalys
ts not to re
ly on any
sin
gle ﬁna
ncia
l meas
ure but to r
eview GS
K’s An
nual Rep
or
ts
including the ﬁnancial statements
and not
es, in their entirety
.
GS
K is unde
rt
aki
ng a numb
er of Boa
rd-a
pproved M
ajo
r
restructuring programmes in
response t
o signiﬁcant changes i
n
the G
roup’s tradi
ng envir
onment o
r overal
l strate
gy
, or foll
owing
mater
ial ac
quisi
tions
. Co
sts, b
oth ca
sh and n
on-c
ash
, of thes
e
programmes are pro
vided for
as individual elemen
ts are
app
roved an
d meet the a
ccou
nting re
cogn
ition c
riter
ia.
As a r
esult
, char
ges may b
e incur
red over a nu
mber of ye
ars
following
the initia
tion of
a Major restructuring programme.
Adjust
ing items
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
Separation
costs
£m
Adjusted
results
£m
T
urnover
3
4
,
114
3
4
,
114
Cost of sales
(
11,
6
0
3
)
701
(3
3)
15
4
28
27
(10
,
7
26
)
Gross proﬁt
22,5
1
1
701
(33)
15
4
28
27
23,388
Selling, general and administration
(10
,
9
7
5)
426
25
17
282
(10
,
2
2
5
)
Research and development
(5
,278)
101
355
46
(4,776)
Royalty income
419
419
Other operating (expense)/income
(476
)
1,10
6
(662)
32
–
Operating proﬁt
6
,2
01
802
322
626
1,15
9
(618
)
3
14
8,806
Net ﬁnance costs
(75
6)
2
1
(75
3)
Share of after-tax proﬁts of associates
and joint ventures
33
33
Loss on disposal of interest in associates
(3
6)
36
–
Proﬁt befor
e taxation
5,44
2
802
322
628
1,1
5
9
(
5
8
1)
3
14
8
,086
T
axation
(3
46)
(15
9
)
(
8
1)
(
114
)
(19
6
)
(470
)
(4
9)
(1,
41
5)
T
ax rate
6
.4%
17.
5
%
Proﬁt after taxation
5,096
643
241
514
96
3
(1
,
0
5
1)
265
6
,671
Proﬁt attributable to non-controlling interests
7
11
295
1,
0
0
6
Proﬁt attributable to shareholders
4,385
643
2
41
514
66
8
(1
,
0
5
1)
26
5
5,
665
Earnings per share
8
7.
6
p
12
.
9
p
4.8p
10
.
3
p
13
.
3
p
(21.0)
p
5.3
p
11
3
.
2
p
Financial pe
rformance
c
ontinued
GS
K Ann
ual R
epor
t 2021
09
Strategic report
Governance and remuneration
Financial statements
Investor information
Financial pe
rformance
c
ontinued
Adjust
ed result
s
2021
2020
£m
% of
turnover
£m
% of
turnover
£%
Growth
CE
R%
T
urnover
3
4
,
114
10
0
34,099
10
0
–
5
Cost of sales
(
1
0,726
)
(31.
4)
(1
0
,
19
1)
(2
9.
9)
5
8
Gross proﬁt
23,388
68.6
23,
908
7
0
.1
(2)
4
Selling, general and administration
(10
,
2
2
5)
(
30.0
)
(1
0
,
7
17
)
(3
1.4
)
(5)
(1)
Research and development
(4
,7
76)
(
14
.
0)
(4,
603)
(13
.
5
)
4
8
Royalty income
419
1.
2
318
0.9
32
32
Operating proﬁt
8,806
25.
8
8
,906
2
6
.1
(1)
9
Net ﬁnance costs
(753)
(
844
)
Share of after-tax proﬁts of associates and joint ventures
33
33
Proﬁt befor
e taxation
8,086
8,095
–
11
T
axation
(1,
4
15)
(1,
2
9
5)
T
ax rate
17.
5
%
16
.
0
%
Proﬁt after taxation
6
,671
6,800
(2)
9
Proﬁt attributable to non-controlling interests
1
,006
1,
0
31
Proﬁt attributable to shareholders
5
,665
5,76
9
Earnings per share
113
.
2
p
11
5
.
9
p
(2)
9
How we per
f
ormed
Cos
t of sales
Adj
usted c
ost of s
ales a
s a perc
enta
ge of turn
over was 31
.
4%,
1
.6 perc
enta
ge poin
ts highe
r at AER a
nd 0.8 p
erce
ntage p
oints
hig
her at CE
R comp
ared w
ith 2020. Th
is prim
aril
y reﬂe
cted
hig
her pan
demic s
ale
s (
Xev
udy
)
as well
as higher su
pply chain
costs in V
accines resulting from lo
wer d
emand and h
igher
invento
ry a
djust
ments an
d highe
r comm
odit
y and fr
eight c
osts
in C
onsum
er He
althc
are, p
ar
tly of
fse
t by pric
e bene
ﬁts in
Pharmaceuticals, including the
beneﬁt from prior
period RA
R
adjustments, a
further contribution fro
m restructuring
savings
across all three businesses and favourable mix in
V
accines.
Selling
, general and adminis
tratio
n
Adj
usted SG
&A c
osts a
s a per
cent
age of tur
nover were 3
0.0%
,
1
.5 pe
rcent
age po
ints lower a
t AER tha
n in 2020 and 1
.8
per
cent
age poi
nts lower o
n a CER ba
sis
. Adjus
ted SG&
A c
osts
dec
rea
sed 5% A
ER
, 1
% C
ER whic
h reﬂe
cted th
e tight c
ontrol
of on
going
costs and
reduced
variable
spending
across
all
thr
ee busi
nes
ses as a r
esul
t of the C
O
VI
D-
1
9 lo
ckdown
s, and
the c
ontinu
ing ben
eﬁt of r
estr
ucturi
ng in Ph
arma
ceuti
cals
,
Consumer Healthcare and support functions. The decrease
als
o reﬂe
cted a favou
rabl
e lega
l sett
lemen
t in 202
1 comp
ared
to inc
reas
ed leg
al co
sts in 2020 as w
ell as on
e-of
f be
neﬁt
s in
pen
sions a
nd insu
ranc
e whic
h were pa
rtl
y off
set by the o
ne-o
ff
ben
eﬁt fr
om res
truc
turing o
f post-re
tirem
ent ben
eﬁts i
n 2020.
Thi
s was pa
rtl
y of
fset by in
crea
sed i
n
ves
tment b
ehind la
unche
s
in HIV and V
accines.
Research and dev
elopment
Adj
usted R&
D expen
diture w
as £
4,
77
6 millio
n (
1
4
.0% of
tur
nover
), 4% highe
r at AER
, 8% hi
gher at C
ER than i
n 2020.
Oper
ating proﬁ
t
Adj
usted op
erati
ng proﬁ
t was £
8,8
06 mil
lion, 1% lower tha
n
2020 at AE
R, bu
t 9% hig
her at CE
R on a turn
over incr
eas
e of
5% CE
R. T
he Adju
sted op
erati
ng margi
n of 25.8
% was 0.
3
percentage points
low
er at
AER, 0.9 percentage points
higher
on a C
ER bas
is than i
n 2020.
The increase in Adj
usted opera
ting proﬁt
primarily reﬂected
the beneﬁt
from inc
remental pandem
ic sales contri
buting
app
roxima
tely 6% A
ER, 7
% CER to Ad
justed o
perati
ng proﬁ
t
growth. Adj
usted
operat
ing pr
oﬁt also
beneﬁted
from
sales
grow
th in P
har
maceu
tica
ls incl
uding th
e bene
ﬁt fro
m prior p
erio
d
R
AR ad
justm
ents an
d tight c
ontrol o
f ongoi
ng cos
ts inclu
ding
reduced pro
motion
al and
variable
spendin
g across
all t
hree
bus
ines
ses a
s a resu
lt of the C
OVID
-
1
9 loc
kdowns
, favoura
ble
leg
al set
tlem
ents co
mpar
ed to incr
eas
ed leg
al cos
ts in 2020
and b
eneﬁ
ts from c
ontin
ued re
struc
turin
g acros
s the bu
sines
s.
Thi
s was pa
rtl
y of
fset by lowe
r sal
es in Vaccin
es, p
rimar
ily
Shingrix
, higher
supply chain
costs in V
accines and Consumer
He
althc
are
, dives
tments i
n Cons
umer H
ealt
hcar
e and inc
rea
sed
inves
tment i
n R&D acr
oss Vacci
nes an
d Phar
mace
utic
als.
Ta
x
T
a
x on
Adjust
ed proﬁt amoun
ted t
o £
1
,4
1
5 million representing
an ef
fec
tive Ad
justed t
ax r
ate of 1
7
.5
% (
2020 – 1
6
.0%).
Non-
controlling
interests
The allocation
of Adjust
ed earnings
to
non-controllin
g int
erests
amo
unted to £1
,
006 mi
llion (2020 – £1
,0
3
1 milli
on
). The
reduction in
allocation primarily
reﬂected a
reduced allocation
of Vi
iV He
althc
are p
roﬁts o
f £4
38 milli
on (2020 – £4
7
4 mi
llion),
par
tl
y off
set by hig
her net p
roﬁt
s in some o
f the Gro
up’
s other
entitie
s
with non-
controlling interes
ts. The alloc
ation of
Consumer Healthcare Joint V
enture proﬁts w
as £5
1
5 mil
lion
(2020 – £5
1
5 mi
llion).
Earnings pe
r
share
Adj
usted EP
S was 1
1
3.2p c
ompar
ed wit
h 1
1
5.9p i
n 2020, down
2% A
ER but up 9
% CER
, on a 9
% CER in
crea
se in Ad
justed
operating pr
oﬁt primarily reﬂecting
incremental pandemic
sales,
sa
les in
crea
ses in P
har
mace
utica
ls, ti
ght co
st cont
rol and
favour
able l
egal s
ettl
ement
s and lower i
nteres
t cos
ts, pa
rtl
y
of
fse
t by lower sa
les in Vacc
ines
, prim
arily
S
hingrix
, higher
sup
ply cha
in cos
ts in Vaccin
es, i
ncre
ased R
&D inves
tment
and a h
igher e
ffe
ctive t
ax r
ate. The c
ontri
butio
n to grow
th from
COV
ID
-
1
9 solut
ions wa
s approx
imatel
y 8% AER
, 9
% CER
.
10
GS
K Ann
ual R
epor
t 2021
Our long-term pri
orities
Innov
ation
We inves
t in scie
nti
ﬁc and t
echn
ical
excel
lenc
e to develo
p and laun
ch
a pip
eline o
f new prod
uct
s tha
t
mee
t the ne
eds of o
ur pat
ient
s,
pay
ers and
consumers.
Per
f
ormance
We de
liver g
row
th by inve
sti
ng
ef
fec
tive
ly in our bu
sines
s,
developing
our people a
nd
ex
ecuting competitively.
W
e put I
nn
ova
t
i
on, Perfo
r
ma
nc
e an
d T
r
ust ﬁr
st t
o re
al
ise our am
b
i
tio
ns fo
r pa
t
i
en
ts,
s
ha
re
h
o
l
ders an
d our peop
le
. I
n 2
0
2
1 we del
iver
ed a strong per
f
o
r
ma
nc
e, a
nd we are
on track fo
r a su
cc
essfu
l d
emerg
er t
o crea
t
e two new l
ead
ing co
mpa
n
ies i
n 20
2
2.
2021 objec
tives
–
Continue to
deliver on-
time, in-
full supply
of our products
–
Improve manager
capability to
motivat
e,
focus, dev
elop and
care for people
–
Continue to
deliver
progress on T
rust
commitments
Progress
–
Mainta
ined
sector-leading rankings in
ES
G indi
ces
, inc
ludi
ng the D
ow Jon
es
Su
sta
inab
ilit
y In
dex, A
cce
ss to M
edi
cine
Index and Antimicrobial Resistance
Benchmark
–
Mainta
ined
supply and manufacturing
without signiﬁcant disruption throughout
the pandemic
–
M
ade fu
rt
her pr
ogr
ess to d
eli
ver on ne
t zero
im
pact o
n clim
ate, a
nd a net p
osi
tive im
pac
t
on n
ature by 2
030
–
Rolled out a
new
training
programme to
develop
our managers
to
support them to
be g
reat m
anag
ers a
nd le
ad wi
th ca
re
–
Continued to
prioritise
diversity
, with
good
progress made against
our gender
and
ethnicity targets
to
improv
e representat
ion
in senior
roles
–
WHO recommended wider use
of our
RTS,S vaccine for
children
in reg
ions with
moderate
to
high m
alaria transmission
2022 priorit
y object
iv
es
–
Deliver leading ESG performance and
effective risk man
agement wit
h disciplin
ed
compliance
2021 objec
tives
–
Deliver Inno
vation
sales with
excellent
commercial, R&D and
supply
chain
execution
in oncology
,
HIV and vaccines
–
Accelerate and
strengthen
pipeline
with
robust commercial input,
including
business development
Progress
–
Received three
major approv
als in
202
1
:
Apretude
, our long-acting HIV prevention
medicine,
Jemperli
for
endometrial
cancer
an
d
Xevu
dy
, for COV
ID
-
1
9
–
Str
ong p
ipel
ine of 21 vac
cin
es an
d 43
medicines, man
y of
which
offer pot
ential
best or ﬁrst
-in-class opportunities for
pat
ient
s and 22 of w
hic
h are i
n pivot
al tr
ial
s
–
20+ d
eal
s execu
ted se
cur
ing ac
ces
s to
novel
clinical
programmes including
with
iT
eos
in immuno-oncology
,
Alector in
immuno-neurology and Vir Biotechnology
in ﬂ
u, plu
s tech
nolo
gie
s that ex
pan
d our
ca
pab
ilit
ies i
n huma
n gene
tic
s and A
I /M
L
2022 priorit
y object
iv
es
–
Deliver Inno
vation
sales with
excellent
commercial, R&D and
supply
chain
execution
–
Further accelerate
and strengt
hen pipelin
e
with ded
icated
in-ho
use e
xpertise and
robust commercial input,
including
optimised
capital allocat
ion and
business
development
2021 objec
tives
–
Continue t
o prioritise
spending
to
deliver
gr
owt
h and re
turn o
n inves
tme
nt
–
Continue to
deliver
two-year programme
to
prepare GSK fo
r separation
int
o two
new leading companies
–
Build a
stronger
, more
diverse w
orkforce
for t
wo new l
ead
ing co
mpa
nie
s
Progress
–
Strong commercial e
xecution
across
Pharmaceuticals
,
V
accines and
Consumer
Healthcare
–
Pharmaceuticals £1
7
.7
billion +
4%
AER,
+
10% C
ER wit
h doub
le-
digi
t grow
th i
n
new
and specialty
medicines +
20% AER,
+
2
6% CER
–
Vacc
ine
s £6.
8 bill
ion -
3% AE
R, +2% C
ER
–
Consumer Healthcare -4% AER, stable
CE
R; -
1
% A
ER
, +4% CE
R exclu
ding
divestments/brands under
revie
w
–
On track
to
deliver
separation plans
in
mi
d-2
022
2022 priorit
y object
iv
es
–
De
live
r mor
e than 5
% sal
es gro
wth a
nd
more than
1
0% a
djusted operati
ng proﬁt on
a co
mpou
nd ba
sis i
n the nex
t ﬁ
ve year
s
–
Continue t
o prioritise
spending
to
deliver
gr
owt
h and re
turn o
n inves
tme
nt
–
Deliver a
successful demerger in
mid-
20
22
Tr
u
s
t
We a
re a r
esponsible compan
y
.
We com
mit to use o
ur scie
nce
and technology to address health
nee
ds, m
ake our pro
duc
ts
af
fordable and a
vailable and be
a modern emplo
yer
.
Culture
As we m
ove towa
rds th
e cre
atio
n of two n
ew lea
ding c
omp
ani
es, we h
ave be
en emb
edd
ing a cu
ltur
e wher
e we are a
ll am
biti
ous fo
r pati
ents
, acc
oun
tabl
e
for i
mpa
ct, a
nd con
tinu
e to do the r
ight t
hing
. We trac
k our cu
ltur
al ch
ange w
ith a r
ange o
f indi
cato
rs
, incr
eas
ingl
y emb
eddi
ng as
se
ssm
ents i
n HR
pr
oce
sse
s, an
d the B
oard r
ece
ive
s regu
lar up
date
s. S
ee pag
es 99 a
nd 1
02.
Princip
al risks
Ou
r ris
k mana
geme
nt fr
amewo
rk is d
esi
gned to s
upp
or
t our lo
ng-te
rm pr
iori
tie
s. Se
e pag
es 46 an
d 1
1
2.
1
Innovat
ion sa
les de
ﬁned o
n page 12
GS
K Ann
ual R
epor
t 2021
11
Strategic report
Governance and remuneration
Financial statements
Investor information
Ove
r the pa
st four ye
ars
, we have focus
ed on em
bedd
ing a
cul
ture anc
hore
d in purp
ose an
d per
form
ance
. W
e’ve made
great progress, demonstrat
ed b
y strong
engagement
and pride
in GS
K
, whic
h has co
ntrib
uted to impr
oved R&D p
roduc
tivi
ty
and performance of our commercial
teams and
in ou
r supply
cha
ins. At t
he sam
e time, t
he impa
ct of the C
OVID
-
1
9
pan
demic h
as dr
iven our te
ams to wor
k more dy
nami
call
y
,
wit
h a deep
er conn
ecti
on to our pur
pose a
nd eac
h other.
GS
K’s purp
ose – to uni
te scie
nce, t
alent a
nd techn
ology to g
et
Ah
ead of di
sea
se T
og
ether – p
uts our pe
ople at t
he hea
rt of o
ur
suc
ces
s. T
o delive
r on that pu
rpos
e, and h
elp our ou
tsta
nding
peo
ple thr
ive, th
e focus fo
r our cultu
re is for G
SK to be a pl
ace
whe
re we are a
ll ambi
tious f
or patie
nts, ac
coun
tabl
e for impa
ct,
and d
o the rig
ht thing
.
Thi
s mean
s helpi
ng our pe
ople to co
nsta
ntly st
rive to do thi
ngs
bet
ter and f
aster, always f
ocuse
d on what m
atter
s mos
t. It
me
ans set
ting c
lear o
bject
ives an
d ensur
ing acc
ount
abili
ty for
re
sults
, whil
e givin
g everyo
ne the su
ppor
t or sp
ace they n
eed to
suc
cee
d. As ever, this me
ans do
ing ever
y
thing re
spo
nsibl
y with
care and
int
egrity
, because
our
people, an
d people
aroun
d the
worl
d, cou
nt on us
.
We mea
sure thi
s progr
ess th
rough a r
ange of i
ndic
ators
,
loo
king at h
ow our pe
ople ex
peri
ence GS
K as a p
lace to
work
, how th
ey embo
dy the cul
ture, a
nd how this a
ffe
cts
our p
er
forma
nce. E
ngage
ment re
mains h
igh at 78%
, set
tling
bac
k to 20
1
9 leve
ls af
ter a boos
t duri
ng the ea
rly pha
ses o
f
the p
andem
ic. As p
ar
t of chan
ges to ma
ke our app
roach to
measur
ing
culture increasingly dyna
mic, w
e will augment our
ann
ual sur
vey wi
th puls
e sur
veys, s
o that we ca
n more qu
ickl
y
ide
ntif
y are
as of su
cce
ss and a
rea
s of focus
. We are a co
mpany
that h
as re
spec
t for peo
ple at its c
ore. T
his gi
ves us an
opp
or
tunit
y to build a
n inclu
sive cul
ture inter
nall
y and to be a
forc
e for go
od in imp
roving i
nclus
ion and d
ivers
ity i
n soci
ety.
We conti
nue to focu
s on build
ing a mor
e inclu
sive cul
ture,
wit
h inclu
sion tr
ainin
g for our pe
ople a
nd lead
ers a
longs
ide
our wo
rk to evolve our p
olic
ies
, proce
sse
s and pr
acti
ces
.
We know th
at lead
ers an
d manag
ers pl
ay a cruc
ial rol
e in
bri
nging c
ulture to li
fe for our p
eople
, and we c
ontinue to
devel
op our ma
nager
s throu
gh focu
sed tr
aining
, to suppo
rt
the
m to be grea
t manag
ers: to moti
vate their te
ams, to h
elp
the
m focus on w
hat mat
ters m
ost, to s
uppor
t the
ir per
for
manc
e
and d
evelopm
ent, a
nd to lead w
ith ca
re for ever
yone a
s
indi
vidu
als
. W
e mea
sure th
e effe
ctive
nes
s of our glo
bal
manager population through
annual One80 feedback and
co
ntinue to bu
ild and r
efres
h the exp
er
tise in o
ur seni
or lea
ders
,
wit
h 1
4% of our top 1
1
5 leade
rs ap
pointed i
n 202
1
. O
ur
broader HR processes, including re
ward and
succession
pla
nning
, will c
ontinue to b
e bas
ed on as
ses
smen
ts of both
wha
t we delive
r and how we do i
t (ie our c
ultura
l behavi
ours).
Our a
ppro
ach to hybr
id work
ing – Per
for
manc
e with C
hoic
e –
is an
chore
d in dri
ving in
divi
dual an
d colle
ctive p
er
forma
nce,
while creating
more ﬂexibility for
our ofﬁce
-based people in
how an
d wher
e they get th
eir work d
one. T
his hel
ps them
per
fo
rm at thei
r best
, bas
ed on the
ir role
, team an
d pers
onal
circumstances. As pandemic-related
restrictions began t
o ease
in ma
ny count
ries i
n 202
1
, al
l of our of
ﬁc
e-ba
sed p
eopl
e have
eit
her alr
eady c
hange
d the way they wor
k or st
ar
t
ed di
scus
sing
it wi
th thei
r manag
er
. In 2021
, al
l of our of
ﬁc
e-ba
sed wo
rkers
(approx
imatel
y a quar
ter of ou
r peopl
e
) worked s
ome par
t
of the
ir week f
rom hom
e, and we c
ontinu
ally lo
ok at ways to
sup
por
t our pe
ople in a
ll role t
ype
s to bala
nce th
eir work a
nd
personal liv
es.
We know th
at the str
onges
t cultu
res ne
ed to be buil
t from
the top d
own, th
e botto
m up and fr
om the ins
ide ou
t t
o be
suc
ces
sful
. This i
s why this ye
ar we have be
en bri
nging pe
ople
toget
her fro
m aroun
d the worl
d, rep
rese
nting ever
y ro
le ty
pe,
bus
ines
s are
a and reg
ion, to he
lp us acc
eler
ate the cul
ture
acr
oss th
e comp
any
. W
e’
re re
ady an
d excited to c
ontinu
e t
o
make p
rogre
ss on o
ur cultur
e in GS
K, s
o togethe
r we can
del
iver a step c
hang
e in comp
etiti
ve grow
th and bu
ild a
suc
ces
sful c
ompa
ny that imp
roves the l
ives of p
eople a
cros
s
the world.
Consumer Healthcare culture, see page 43
Ou
r cul
ture powers our pur
pose to ge
t Ah
ead o
f d
isease T
oget
her
,
dr
i
ves d
el
ivery of our strategy and makes GSK a pla
ce w
her
e
out
s
tan
din
g p
eo
ple
th
riv
e.
Our
cultur
e
12
GS
K Ann
ual R
epor
t 2021
T
o see how we are progress
i
ng aga
i
nst our three l
ong-
t
er
m p
rio
ri
t
ies,
we use ten k
ey per
f
o
r
ma
nc
e i
n
d
ic
at
o
rs.
K
e
y per
f
or
ma
nce i
nd
icato
rs
Innov
ation
2021
2020
20
19
Innov
ation sales
R
Ph
arma
ceut
ica
ls and Vacc
ines – s
ale
s of prod
ucts l
aunc
hed in th
e las
t ﬁve yea
rs
£6.
8bn
1
£
4
.1b
n
2
£3
.0bn
2
Co
nsum
er He
althc
are – s
ale
s from p
roduc
ts whi
ch are n
ew to a mar
ket in the l
ast
thr
ee yea
rs as a % o
f total s
ales
10
%
11
%
12
%
Pipeline v
alue and
progress
R
–
the va
lue of pr
oduc
ts in our p
ipeli
ne and R
&D
milestones achieved
n
/r
n/r
n
/r
Per
f
ormance
2021
2020
20
19
Group turnover
R
–
ﬂat a
t AER
, 5% CE
R
£
3
4
.1b
n
£
3
4
.1b
n
£33
.8bn
Proﬁt
R
T
otal op
erat
ing pro
ﬁt – dow
n 20% A
ER, d
own 9% C
ER
£6.
2bn
£
7.
8
b
n
£
7.
0
b
n
Adj
usted o
pera
ting pr
oﬁt – dow
n 1
% AER
, up 9% C
ER
£8
.8bn
£
8.9bn
£9.0
bn
T
otal operating margin
18
.
2
%
22.8%
20.6%
Adjusted
operating
margin
25.
8%
2
6
.1%
26.6%
Free c
ash ﬂow
R
–
d
o
w
n
18
%
£4
.4bn
£
5.4bn
£
5
.1b
n
Ma
rket share
– o
ur
mar
ket sha
re in re
latio
n to our com
peti
tors
n
/r
n/r
n/r
T
op tal
ent and s
ucce
ssion p
lans fo
r k
ey role
s
– our mo
st tal
ented em
ployee
s
in key ro
les wi
th succ
es
sion pl
ans in pl
ace
n
/r
n/r
n/r
T
rust
2021
2020
20
19
Employ
ee feedb
ack
–
employ
ee engagement scores from
our global emplo
yee
sur
v
ey
78%
84%
78
%
Sup
ply ser
vic
e level
–
percentage of
orders delivered
on-time,
in-fu
ll
n
/r
n
/r
n/r
Corporate reputation
–
reputat
ion index
among stak
eholders and in
formed public
me
asur
ed glo
ball
y and in top 13 marke
ts
n
/r
n
/r
n/r
R
Lin
ked to E
xe
cutive LT
I awa
rds a
nd annua
l bonu
s, se
e pa
ges 120, 1
29 and 131
F
rom 20
22, E
xec
utive LT
I awa
rds an
d annua
l bonu
s wil
l be ba
sed o
n a mix of Tota
l sale
s gr
owth
, Adju
ste
d oper
ating p
roﬁt g
row
th, pip
eline and E
SG
ta
rge
ts. S
ee pa
ges 12
2, 124 an
d 136 to 137
1
2021 inc
ludes p
roduc
ts th
at have b
ene
ﬁted f
rom sig
niﬁ
cant life
cyc
le innova
tion
2
Comp
ar
ative in
form
ation r
eﬂe
cts s
ale
s of thos
e produ
cts t
hat me
et the de
ﬁnition for 20
20
n
/r
N
ot rep
ort
ed ex
ter
na
lly du
e to comme
rcia
l sen
sitivitie
s
Th
e GSK Le
ader
ship T
eam (G
L
T
) and our B
oard r
eview ou
r
key per
for
manc
e indi
cator
s (KP
Is
) reg
ularl
y
. W
e als
o update
our p
eople o
n progr
ess eve
ry q
uar
ter
. W
e dec
ide our p
eopl
e
’s
bon
uses b
ase
d on releva
nt subs
ets of ou
r t
en K
PI
s, whi
ch
we als
o use to rewa
rd our exe
cutive
s’ per
form
ance (see
pag
es 1
20, 1
29 and 1
3
1
).
We track a
ll our op
eratin
g KP
Is inter
nall
y
, and bel
ow we give
data f
or those
we
report externally
. Commercial
sensitivities
me
an we can’
t publis
h data fo
r all ope
ratin
g KPI
s (
show
n as n/r).
T
o r
epor
t our b
usine
ss pe
rfo
rman
ce, we us
e adjus
ted, no
n-I
FRS
me
asur
es, in
cludi
ng Adjus
ted res
ults
, free c
ash ﬂ
ow and CE
R
grow
th r
ates (
as d
escr
ibed o
n pages 5
6 and 59).
GS
K Ann
ual R
epor
t 2021
13
Strategic report
Governance and remuneration
Financial statements
Investor information
A reop
ening of the gl
obal econo
m
y, driv
en
by healthcare innovation
Th
e events of 2021 gave a cle
ar demo
nstra
tion of th
e
co
ntribu
tion ou
r indus
try c
an ma
ke t
o the wor
ld. A
s the
pandemic cont
inued, col
laborations
between companies,
governmen
ts, regulat
ors and i
nterna
tional organisat
ions
bro
ught new vac
cine
s and me
dicin
es to the wor
ld in re
cord
tim
e. Regul
ator
y proc
ess
es got fa
ster an
d comp
anie
s invested
in R&
D to delive
r novel pro
ducts a
nd expa
nded m
anufa
cturi
ng
capacit
y
. The rollout of v
accine programmes enabled the g
lobal
ec
onomy to re
open
. Later i
n the year, regu
lator
y appr
oval was
gra
nted for C
OVI
D-
1
9 tre
atment
s. GS
K contr
ibute
d to the
glo
bal re
spons
e, thro
ugh our ag
reem
ents wi
th the US
, EU
and a n
umber o
f other gove
rnme
nts to supp
ly our C
O
VI
D-
1
9
therapeutic,
X
evudy
(
sotrovimab
), and our ongoing
vaccination
devel
opmen
t progr
amme
s with S
anoﬁ
, Medi
cago
, SK
Bioscience and Cure
V
ac.
At the s
ame tim
e, the v
irus c
ontinue
s to take li
ves, a
nd the
worl
d is stil
l deali
ng with t
he eco
nomic a
nd soc
ial imp
act of
the pandemic.
The worst prediction
s of
prolonged economic
recession ha
ve
not
mat
erialised,
with g
lobal econo
mic f
orecasts
pre
dicti
ng grow
th of 5.
9% in 2021 and 4.9
% in 2022, al
though
the
re is som
e unce
rt
aint
y abou
t the unif
ormit
y of the r
ecover
y,
the managemen
t of
debt, and
inﬂationary trends.
1
Similarly
, t
here
will be
conti
nued econ
omic an
d social
threat
s posed
by
new
variants such as Omicron. Althoug
h global healthcare spending
is ex
pecte
d to rise, t
here w
ill be co
mpeti
ng fundi
ng dema
nds
bet
ween f
ront-lin
e staf
f cos
ts, th
e ongoi
ng need f
or pand
emic
medical products and cat
ch-up programmes to
tackle growing
wai
ting lis
ts. G
overnme
nts and h
ealt
hcar
e systems w
ill have to
evalu
ate the co
st of new ph
arma
ceuti
cal in
novation a
nd its ro
le in
hel
ping to add
res
s the bur
den of ill
ness a
cros
s all the
rapy ar
eas
.
Out
look for th
e global hea
lthc
are market
Th
e pre-p
ande
mic tre
nds in the u
se of me
dicin
es and s
pendi
ng
remain relativ
ely constant. In
higher income
countries, the
ado
ption of n
ew treatm
ents
, off
set by pate
nt lifec
ycles a
nd
competition from
generics and biosimi
lars, is expected
to
co
ntinue a
s the mai
n drive
r of medi
cine sp
endin
g and grow
th
.
Gl
obal me
dicin
e spen
ding tota
lled $1
.4 tril
lion in 2021 and
is ex
pecte
d to grow at 3-
6% CAGR th
rough 2026
, reac
hing
abo
ut $1
.
8 trill
ion in tot
al mar
ket size, exc
ludin
g spend
ing on
COV
ID
-
1
9 vacci
nes
. The US m
arket is f
orec
ast to gr
ow by
0
-3% CAGR ove
r the nex
t ﬁve ye
ars
. Spen
ding in th
e top ﬁve
Eur
opea
n market
s is expe
cted to inc
rea
se by $5
1 billi
on.
Chi
na is exp
ected to in
crea
se its u
ptake of n
ew and or
igina
l
med
icine
s (gr
owing by $
35 bil
lion by 2026), with sp
endin
g
in em
ergin
g market
s likely to in
crea
se by $1
28 bil
lion.
2
Global
spe
nding o
n vacci
nes is p
redic
ted to grow at 1
2
-
1
5%
, reach
ing
$
46 billi
on in 2025.
3
It i
s forec
ast t
hat by 2026, spe
cial
ty me
dicin
es wil
l acco
unt
for ne
arl
y 60% of tot
al exp
enditu
re in hig
h-inc
ome mar
kets,
with the
remainder
,
predominantly
older and
traditional
therapies, becoming progressively lo
wer
-cost o
ver t
ime. The
t
wo leadi
ng glob
al ther
apy are
as – onc
olog
y and imm
unolo
gy
– are f
orec
ast to gr
ow 9-
1
2% an
d 6-9
% CA
GR r
espe
ctive
ly
thro
ugh to 2026, li
fted by s
igni
ﬁca
nt incre
ase
s in new
tre
atment
s and med
icine u
se. I
t is expe
cted that 100 mor
e
onc
olog
y treatm
ents wi
ll come to m
arket over ﬁ
ve year
s.
2
Our posi
tion
Our 2021 per
for
manc
e sugge
sts th
at we are wel
l posit
ioned
to ca
pita
lise on th
e forec
ast g
row
th in spe
cial
ty me
dicin
es.
In
crea
sed inve
stme
nt for key R&D p
rogr
amme
s and exp
anded
sup
por
t for new an
d ongoi
ng laun
ches h
as res
ulted in s
ale
s
grow
th dr
iven by st
rong upt
ake of new m
edici
nes
. In 202
1
,
new an
d spec
ialt
y medi
cine
s grew by 26% C
ER and we
recorded double-digit sales growth in immuno-inﬂammation,
re
spira
t
or
y and o
ncolo
gy. W
e see the
se re
sults a
s ver
y
encouraging and
a demonst
ration o
f strong
progress against
our s
trategi
c prio
ritie
s. Th
ese ne
w medic
ines a
re at the for
efron
t
of an exc
iting
, high-
value pi
pelin
e we conti
nue to buil
d acros
s
the p
reventio
n and tre
atmen
t of dise
ase.
Ou
r ex
tern
al e
n
vironme
nt
1
IM
F
, W
orld Ec
onomic O
utloo
k: Re
cove
ry D
ur
ing a Pan
demic
,
Octob
er 202
1
2
IQV
IA
, Th
e Globa
l Use of Me
dicines 2
022, Janu
ar
y 2022
3
IQV
IA
, Globa
l Medicin
e Spen
ding and U
sage Tre
nds O
utlo
ok to 2025,
Ap
ri
l 20
21
T
he w
o
r
ld is c
hangi
ng, s
haped by ma
j
o
r soc
ial and ec
on
om
ic trends that
co
n
ti
nu
e to b
e i
nﬂuen
c
ed by t
he C
O
VID-
1
9 pand
em
i
c. W
h
il
e t
he c
on
tribu
t
i
on
of va
cc
i
n
es, med
i
c
i
nes a
n
d heal
t
hcare ha
s bee
n cle
arl
y h
ig
hl
ig
h
t
ed t
h
is ye
ar
,
c
hallenges rema
i
n. W
e respond t
o t
h
i
s d
yn
a
m
ic en
viron
men
t b
y wo
r
ki
ng wi
t
h
go
ver
n
m
en
ts, reg
ula
t
o
rs and i
n
d
ustr
y pa
r
tners t
o del
iv
er i
n
no
va
t
io
n t
o
heal
t
hcare syst
ems tha
t dem
onstrat
es valu
e t
o pa
t
ie
n
ts and pa
y
ers.
14
GS
K Ann
ual R
epor
t 2021
Our ext
ernal environment
continu
ed
Healthc
ar
e en
vir
onment: op
por
tu
nities and cha
llenges
Pricing and access
Equal access to
healthcare
For g
overnm
ents, e
qual a
cce
ss to hea
lthc
are is a gr
owing
pol
icy pri
orit
y
. The c
halle
nge of br
ingin
g COVI
D-
1
9 vac
cine
s
equitably t
o the
global popula
tion hig
hlight
ed the
dilemma.
In
dustr
y ha
s manuf
actur
ed and di
strib
uted over 1
1 bill
ion
1
vaccine doses, but the
y ha
ve disproportionally gone t
o high-
inc
ome co
untri
es. O
nly 9.6% o
f peopl
e in low-i
ncom
e countr
ies
have re
ceive
d at lea
st one do
se.
2
Gove
rnmen
ts attem
pt to
bal
ance i
mmedi
ate acc
ess fo
r their re
spe
ctive po
pulati
ons
with global
health
responsibilities.
Th
ough glo
bal ini
tiative
s such a
s COVAX h
a
ve hel
ped wi
th
acc
es
s t
o vac
cines
, the di
spar
ity le
d some g
overnm
ents and
interna
tional organisat
ions t
o question
intel
lectual property (IP)
frameworks, most n
otably the
W
orld T
rade Organization
’
s
agreement on
T
rade-Related Aspects of
Intellectual
Propert
y
Rights (TR
IPS
) waiv
er pro
visions. Howe
ver
, there is concern
that a
ny moves to alte
r IP pr
otectio
ns won’t ad
dres
s the
pro
blem a
nd coul
d dest
abili
se innova
tion wi
thin lif
e scien
ces
.
In tu
rn, thi
s coul
d threate
n future c
olla
borat
ions like t
he ones
that we
re so imp
or
tant i
n creati
ng the vac
cine
s and tre
atment
s
use
d to tack
le thi
s pande
mic.
Th
e need to de
monst
rate the val
ue of innov
ation to pub
lic
and p
rivate he
alth
care p
ayers is g
rowing
. Ex
pendi
ture on
pharmaceuticals is heavily scrutinised, with
renewed calls
for tr
ansp
arenc
y in pri
ce set
ting
. However, there ha
s bee
n
signiﬁcant moderation o
f pharmaceutical expendit
ure o
ver
the l
ast de
cade
. Acros
s 1
1 m
ajor ma
rkets su
rveye
d by IQV
IA
,
medicines’
expenditure
represents only
1
5% of t
otal healthcare
spe
nding a
nd has r
emai
ned rel
ativel
y ﬂat even tho
ugh rel
ianc
e
on pharmaceuticals has increased.
3
Continued genericisation
of medicin
es across therapeutic
cla
sse
s, in
cludi
ng can
cer
, and t
he incr
eas
ed use of b
iosi
milar
s
is c
ontinu
ally im
provin
g affo
rdab
ilit
y and ac
ces
s. Howeve
r
, the
out
look wi
ll conti
nue to be ch
allen
ging an
d the dem
and for da
ta
and real-world e
vidence to su
ppor
t
continued reimbursement
of new p
roduc
ts is like
ly to incr
ease
. W
e will wo
rk wit
h payers
to des
ign inn
ovative so
lution
s that man
age the
ir risk a
nd
uncer
tainty
.
Th
ere is al
so likel
y to be a gre
ater emph
asis o
n heal
th res
ilien
ce
and t
he role th
at preven
tative c
are c
an play in i
mprovi
ng
health out
comes. Health protection
int
erventions, including
immunisation,
represent signiﬁcant value
in t
erms of
return
on
inves
tment (this i
s estim
ated to be £
34 for eve
ry p
ound sp
ent
in th
e UK
).
4
US med
icines
policy
Th
ere were s
everal l
egis
lative ef
for
ts to ad
dres
s drug p
rici
ng
in th
e US throu
ghout th
e year a
nd pric
ing be
came a fo
cal p
oint
in at
tempts to p
ass th
e $
1
.
7
5 tril
lion so
cial s
afet
y and cli
mate
pac
kage (B
uild B
ack Bet
ter Act) towa
rds the e
nd of the ye
ar
.
5
Th
e drug pr
icing r
eform p
ropo
sals p
rovide
d for dir
ect
neg
otiatio
ns bet
ween th
e feder
al gover
nment
's Me
dica
re
In
suran
ce Pr
ogram
me and i
ndustr
y on t
he pric
e of the ten
co
stlie
st dru
gs for dis
eas
es, s
uch as c
anc
er and di
abete
s, that
onl
y have one sup
plier, with n
ew pric
es ta
king e
ffe
ct in 2025.
Th
e meas
ures s
ought to ad
dres
s out-of-po
cket exp
endit
ures
for s
enior
s by cap
ping sp
endin
g at $2,00
0 per p
erso
n per yea
r
.
Co
mpan
ies that r
aise
d the pr
ice of me
dici
nes ab
ove inﬂati
on for
par
ts B a
nd D of Me
dica
re would b
e pena
lised
. The in
ﬂatio
n cap
would a
lso ap
ply to pri
vate insu
ranc
e market
s.
Though the out
-of
-pocke
t measures should impro
ve affordability
for s
enior
s, the i
ndust
ry i
s conc
erne
d that, t
aken toget
her
, the
pac
kage c
ould re
duce p
atient c
hoic
e and limi
t acc
ess to
inn
ovation in th
e futur
e. With n
o agree
ment re
ache
d on the exa
ct
term
s of the Bu
ild Bac
k Bet
ter Act by th
e year en
d, the ex
tent
and e
ffe
ct of the d
rug ref
orm pac
kage r
emai
ned unc
lear.
European pha
rmaceutical refo
rm
In E
urope
, there c
ontinu
es to be c
onsid
erab
le scr
utiny of
dru
g pric
ing and a g
rowing tr
end towar
ds the c
entra
lised
pro
curem
ent of vac
cine
s and me
dicine
s. A w
ide-r
angi
ng review
of EU ph
arma
ceuti
cal l
egisl
ation b
egan a
s par
t of the EU
’s
pha
rmac
eutic
al str
ategy. The s
trategy i
s bas
ed on four p
illar
s,
cove
ring ac
ces
s, co
mpeti
tivene
ss an
d innovatio
n, cri
sis
pre
pare
dnes
s and a st
rong EU voi
ce in the wo
rld. T
he revi
ew
is al
so loo
king at i
mproved r
egula
tory p
roce
dure
s and the
vulnerability of supply
of m
edicines.
L
ast ye
ar
, the Eur
opea
n Com
miss
ion ce
ntrali
sed th
e
pro
curem
ent of C
O
VI
D
-
1
9 va
ccin
es on be
half of m
embe
r
st
ates and in 2021 it co
nclud
ed a joi
nt procu
reme
nt agree
ment
to
purchase monoclonal an
tibodies.
Beyond
Europe, many
countries are implementing
various
refo
rms r
anging f
rom re
gulator
y pathways to c
ost c
ontai
nment
.
In C
hina
, the gove
rnmen
t has co
mmit
ted to acc
eler
ating pa
tient
acc
es
s t
o he
alth ins
uran
ce cover a
nd innovat
ive medi
cine
s.
Chi
na com
pleted a
n update to it
s nation
al reim
burs
ement d
rug
lis
t (NR
DL) in 2021 and wil
l add new hi
gh-val
ue medi
cine
s in
the f
uture. H
owever
, acc
ess to th
e NR
DL ca
n resu
lt in pri
ce
red
uctio
ns – on avera
ge, 61
% in 201
9
, 5
1
% in 2020 and 62%
in 2021
.
6
Our posi
tion
We aim to bri
ng our new m
edici
nes
, vaccin
es and c
onsum
er
healthcare products to
patients a
cross the world, n
o matter
whe
re they li
ve. We have an indu
str
y-le
ading tr
ack re
cord o
n
this
, as s
hown by our c
ontinu
ed top ra
nkin
g in the Ac
ces
s to
Me
dicin
e Index
. We are work
ing to en
sure th
at as med
icine
s
be
come mo
re spe
ciali
sed
, we maint
ain our c
ommi
tment to
acc
es
s. We will do th
is by mak
ing our p
roduc
ts wid
ely avail
able
at re
spons
ible p
rice
s that ar
e sust
ainab
le for our b
usine
ss
.
1
World Ec
onomic For
um
, From z
ero CO
VID
-
19 vaccine
s to 11.2 bil
lion
in a yea
r, 4 J
anua
r
y 2022
2
Ou
r World in Dat
a, Cor
onav
ir
us Vaccin
ation
s, a
s at 1
9 Janua
r
y 2022
3
IQV
IA
, Dr
ug E
xp
endit
ure D
yn
amics 1995
-
2020
, Octob
er 2021
4
A
BPI, E
conomi
c and So
cieta
l Impac
ts of Vacc
ination
, 2020
5
H
.R
.5376 - Buil
d Bac
k Bet
ter Ac
t, 11
7th Con
gre
ss, 2
021
-2022
6
Ph
ar
ma
E
xec
.com
, China 2
021: The N
R
DL Read
out, Janu
ar
y 2022
GS
K Ann
ual R
epor
t 2021
15
Strategic report
Governance and remuneration
Financial statements
Investor information
Getting the balance
right between responsible
pricing
and s
usta
inabl
e busi
ness i
s funda
ment
al to our In
novation
,
Per
for
manc
e and T
rust p
rior
ities
. Whe
n set
ting pri
ces fo
r our
med
icine
s in matur
e marke
ts, we us
e a value
-bas
ed app
roach
that b
alan
ces rewa
rd for in
novation w
ith ac
ces
s and af
ford
abili
ty
(
see p
age 36). W
e aim to p
rovide t
ruly di
ffe
renti
ated, inn
ovative
pro
ducts t
hat of
fer ef
fec
tive hea
lth outc
omes fo
r patie
nts and
payer
s, so t
hat all pr
oduc
ts deli
ver value
.
For more on pricing see our ESG Performance Report
Regulatory environment
Growin
g ﬂexibil
ity and cooperation
Despite t
he obstacles posed
by
the pan
demic, regu
lato
rs
and t
he indus
tr
y conti
nue to pri
oriti
se the su
pply of e
sse
ntial
vac
cines a
nd medi
cine
s, whi
le als
o acce
lerat
ing the
developmen
t of
new
products. New regu
latory approaches
hav
e faci
litat
ed inno
va
tion, particularly i
n digital
healthcare,
ce
ll and ge
ne ther
apie
s, co
mplex cl
inic
al tria
ls, b
ig data a
nd
real-world e
vidence.
Reg
ulator
s have worked i
n close c
oope
ratio
n with in
dustr
y,
often across regula
tory jurisdictions, thro
ugh supranat
ional
bodies, such as the
Internat
ional Coalition of
Medicines
Reg
ulator
y Auth
oriti
es. T
here i
s the poten
tial for t
he per
manen
t
adoption
of regula
tory adaptations
that
support the dev
elopment
and a
pprova
l of a broa
der ra
nge of new vac
cine
s and me
dicin
es.
Th
ere is al
so an op
por
tunit
y to simp
lif
y regul
ator
y proc
ess
es.
Our ext
ernal environment
continu
ed
Acr
oss re
gions
, majo
r regul
ator
y initi
atives h
a
ve bee
n
ann
ounce
d, inc
luding i
n the UK
, Ch
ina
, US and E
urope
. In the
US
, negoti
ation
s betwe
en the in
dustr
y an
d the Foo
d and Dr
ug
Admi
nistr
ation (F
DA) about t
he Pre
scr
iption D
rug Us
er Fee A
ct
(PD
UFA) VI
I have con
clude
d. Potent
ial re
gulator
y inn
ovations
cove
red in th
e resul
ting co
mmitm
ent let
ter are m
oving on to
the l
egisl
ative pro
ces
s. I
n the EU, the i
ndust
ry c
ontinu
es to
prepare for
the Eur
opean Commission’
s re
vision of
general
pharmaceutical legislation. The industry is also working with
the
UK
’s Medi
cine
s and He
althc
are P
roduc
ts Reg
ulator
y Agen
cy
(M
HR
A), whi
ch is es
tabl
ishin
g new and en
hanc
ed par
tne
rshi
ps
wit
h regul
ators ou
tside t
he EU. Fol
lowing B
rexi
t, ther
e are sti
ll
signiﬁcant regulatory challenges around implementation
of the
No
rth
ern Ir
elan
d Protoc
ol. Th
e indus
tr
y conti
nues to en
gage
wit
h both U
K and EU age
ncie
s to reso
lve the
se.
Our posi
tion
GS
K clos
ely mo
nitors a
nd enga
ges
, wher
e relevan
t and
appropriate,
to
improv
e regula
tion. This
happens mainly
in
the U
K
, Europ
e, US, C
hina a
nd Japa
n.
For e
xampl
e, sci
entiﬁ
c innovati
on is mov
ing beyon
d the sco
pe
of cur
rent r
egulat
ion and s
tand
ards
, and we c
ontinu
e t
o lea
rn
fro
m our exp
erie
nce wi
th COVI
D-
1
9. Work
ing w
ith our p
eers
,
we are e
ngagi
ng with g
overnme
nts to cre
ate a bala
nced
regulat
ory framework tha
t supports the d
iscovery and deliv
ery
of vaccines and medicines dev
eloped through emerging
technologies and t
echniques.
Global en
vi
ronment:
opportunities and challen
ges
Changing nee
d
s
Age
ing pop
ulation
s are inc
rea
sing gl
obal d
emand fo
r prevent
ive
and therapeutic health solut
ions, and changing
the wa
y
healthcare is deliv
ered worldwide.
The acceleration o
f digital
he
alth an
d t
ele
medi
cine have revo
lutio
nised t
he deli
ver
y of
he
althc
are over th
e las
t two yea
rs as p
atient
s incre
asi
ngly
managed their o
wn healthcare at home.
The global digital
health
mar
ket is exp
ected to r
each $
484 b
illion i
n 2025 at a CAGR
of 25%
.
1
Pati
ents ar
e beco
ming mo
re enga
ged wi
th their
healthcare, and
companies are
adoptin
g more
‘pat
ient
-centric
’
approaches, focused on
patient
outcomes, pat
ient satisfact
ion
and user
experien
ce.
Predictions suggest th
e global pop
ulation
will gro
w t
o 8.5 billion
by 203
0 (
from 7
.7 bill
ion, 201
9), des
pite the p
andem
ic
dec
rea
sing li
fe expe
ctan
cy in som
e count
ries i
n 2020-2
1
. The
numb
er of over-
65-ye
ar-old
s is set to do
uble be
twee
n 20
1
9
and 20
50.
2
Mo
re peo
ple are l
iving i
n citie
s, be
comi
ng af
ﬂuent
and l
iving to a
n advanc
ed age
. This i
s par
ticu
larly t
rue in C
hina
,
whi
ch is exp
erie
ncing t
he world
’
s fas
test-ever ex
pans
ion of the
mid
dle cla
ss
, with pr
ojec
tions th
at 1
.
2 billi
on peo
ple wil
l be
mid
dle cla
ss by 2027
.
3
Adva
nce
s in scie
nce an
d techno
logy w
ill help u
s resp
ond to
the gr
owing d
emand fo
r heal
thca
re cre
ated by cha
nging
dem
ogra
phic
s, gre
ater pati
ent co
ntrol an
d the dem
and for
digital hea
lth.
Our posi
tion
Cha
nging d
emogr
aphi
cs wil
l contr
ibute to ri
sing de
mand fo
r
he
althc
are, w
hich we c
an re
spond to w
ith our di
vers
e por
tfo
lio
spa
nning i
nfecti
ous dis
eas
es, H
IV, oncol
ogy, immuno
logy a
nd
re
spira
t
or
y dis
eas
e. W
e aim to po
siti
vely imp
act the h
ealt
h of
over 2.
5 billi
on peo
ple over th
e nex
t ten year
s with ou
r produ
cts
.
In li
ne with o
ur Inn
ovation pr
iori
ty, we are inve
sting in a p
ipeli
ne
of vac
cine
s and sp
ecial
ty me
dicin
es that w
ill mee
t chang
ing
he
althc
are ne
eds
. W
e believe t
hat new tec
hnolo
gies wi
ll enab
le
the e
arli
er iden
tiﬁc
ation o
f disea
ses a
nd we will d
evelop
precision medicines t
hat will
target t
reatments
to
groups of
pati
ents mo
st likel
y to beneﬁ
t. In v
accin
es, te
chnol
ogic
al
inn
ovation is a
llowin
g us to addr
ess un
met med
ical n
eeds
acr
oss al
l age gro
ups.
1
Di
gita
l Healt
h Globa
l Ma
rket Re
por
t 2021 – COV
ID 19 Gro
wth an
d
Ch
ang
e, Res
ear
ch and Ma
rke
ts
, Ma
rch 2021
2
Unite
d Nation
s, World Pop
ulati
on Pro
spe
ct
s 2019 (Rev
is
ed), 2019
3
Br
ookin
gs, C
hina’s inﬂue
nce on the g
loba
l middle c
la
ss
, Homi Kh
ar
as
and M
eaga
n Doole
y
, Octob
er 202
0
16
GS
K Ann
ual R
epor
t 2021
Advances in science and te
chnology
We are at an exc
iting t
ime in me
dica
l disc
over
y
, fuell
ed by
the g
enetic r
evoluti
on of the la
st de
cade c
ombin
ed wit
h the
expansion
of (patien
t
-driven
)
healthcare da
ta and
advanced
technology
like
artiﬁ
cial
int
elligence/
machine
learning (AI/M
L)
.
Advances in fu
nctional genomics, such
as CRI
SPR gene
edi
ting, h
ave alrea
dy sta
rte
d to redeﬁ
ne wha
t is pos
sible i
n
dru
g disc
over
y
, allowi
ng res
earc
hers to u
nravel the my
steri
es
of bi
ology a
nd help p
inpoi
nt novel dr
ug tar
gets wi
th a highe
r
pro
babil
ity of s
ucc
ess
. This i
s driv
ing a phe
nomen
on we cal
l the
‘
digitisation
of biology’
, which allo
ws scient
ists t
o explore
human
bio
logy in a w
a
y never p
oss
ible be
fore. I
t hold
s much pr
omise
for tr
eating d
isea
ses p
reviou
sly ou
t of reac
h, and r
equir
es AI
and machine learning.
Res
ear
cher
s, reg
ulator
s and payer
s are a
lso exp
lorin
g how
the
se tech
nologi
es ca
n help im
prove cli
nica
l tria
ls and ge
nerate
bet
ter ins
ights o
n produ
ct ef
fecti
venes
s – and eve
n new
combinations of
products – t
o impro
ve
health.
Rapid advan
ces in science
and t
echnology
are fundame
ntally
cha
nging li
fe sci
ence
s R&D. Th
e pand
emic ha
s acc
eler
ated
vaccine in
nova
tion, incl
uding mRNA techn
ology
. This
enables
the b
ody’s own c
ells to pro
duce s
peci
ﬁc pr
oteins
, or antig
ens,
so th
e immune s
ystem c
an preven
t or ﬁght i
nfecti
ous dis
eas
e.
Our posi
tion
We are at the f
orefr
ont of adva
nce
s in scie
nce an
d techno
logy,
work
ing to cr
eate inn
ovative sol
ution
s t
o all k
inds o
f heal
thca
re
challenges.
Advanced technology plat
f
orms
– The
se are c
entra
l to
our R&
D appr
oach
. W
e have expe
rti
se in A
I and fun
ction
al
gen
omic
s. Ou
r dedic
ated glo
bal in-
hous
e AI team i
s usin
g
mac
hine le
arni
ng to unloc
k the poten
tial of c
omple
x geneti
c
dat
a with neve
r
-bef
ore-s
een leve
ls of spe
ed, p
recis
ion an
d
sc
ale. (Se
e page 1
8 for mor
e deta
ils
).
Vacci
nes
– W
e use di
vers
e plat
form tec
hnolo
gies fr
om
adj
uvants th
at impr
ove vaccin
e ef
fecti
venes
s throu
gh to mRN
A
tech
nolog
y
. The
se are at th
e hear
t of o
ur pipe
line dif
fer
entiat
ion.
Collaborations
– We
’re par
tne
ring wi
th team
s from the c
utt
ing
edg
e of ﬁel
ds with
in and ou
tside p
harm
aceut
ical
s and vac
cine
s
to help s
teer new s
cien
ce and deve
lop the
rape
utic
s. (See p
ages
1
7 to 27 for mor
e detai
ls
).
Responsib
le business
Society’s
expectatio
ns of
businesses remain
high. Companies
across all
secto
rs face i
ncreased scruti
ny
on th
e social
and
environmental impacts
of their
operations. At
the same time,
long-t
erm socio-economic trends
continue
to
drive
down trust
in bu
sine
ss. O
rgan
isati
ons mus
t meet exp
ect
ations o
n how
they e
ngage w
ith – and b
eneﬁ
t – soci
ety, the ec
onomy an
d the
environm
ent. Companies are
partnering with
policymake
rs and
non-proﬁt organisation
s on ﬁndi
ng ne
w collaborativ
e solution
s
to
complex long-
term
issues, such as climat
e chan
ge and g
lobal
health i
nequaliti
es.
Our ext
ernal environment
continu
ed
Clima
te change in fo
cus
Rec
ent po
litic
al and e
cono
mic cha
lleng
es may have sl
owed
progress on the UN’s
Sustainable Development
Goals but the
need for
action remains
urgent. A
top
priority is addressing
envi
ronme
ntal is
sue
s. E
x
treme we
ather even
ts, new s
cient
iﬁc
dat
a on clim
ate chang
e and ci
vic act
ivis
m have rapi
dly adva
nce
d
the case for
sustainable energy sol
utions and
stronger
prote
ctio
ns for the na
tural wor
ld and b
iodi
versi
ty. The Gl
asg
ow
CO
P26 sum
mit was t
he 202
1 foca
l point f
or inter
nation
al
cli
mate chan
ge solu
tions
. It le
d to the Gla
sgow C
limate Pac
t,
whi
ch incl
udes n
ew emis
sions p
ledg
es that
, if ful
ﬁlled
, will li
mit
glo
bal war
ming to ab
out 2.
4 degre
es above p
re-i
ndust
rial leve
ls.
1
For t
he ﬁrs
t time at C
OP a pl
an was al
so set o
ut for red
ucing
glo
bal us
e of coal – r
esp
onsib
le for 40
% of annu
al CO
2
emissions.
2
Reco
gnising good E
SG man
agement
Soc
ieta
l expec
tatio
ns of bus
ines
s conti
nue to inc
reas
e, wit
h
bus
ines
ses ex
pecte
d to play thei
r par
t in add
res
sing so
me
of the
biggest challenges
facing society
.
The int
ernational
inves
tment c
ommun
ity i
s resp
ondin
g t
o this c
ontex
t by plac
ing
higher v
alue on
businesses that act
ively mana
ge ESG
risks
and o
ppor
tuni
ties
. The
se busi
nes
ses ar
e seen to of
fer a b
ette
r
foundat
ion for
long-
term, sustainable
growth;
with good
environm
ental st
ewardsh
ip and
climat
e
risk mitiga
tion
planning
be
comin
g a prior
ity f
or investo
rs.
Our posi
tion
T
rust is e
sse
ntial to h
ow we delive
r on our pu
rpos
e and cre
ate
lon
g-term val
ue for bot
h share
hold
ers an
d soci
ety. W
e have 1
3
co
mmitme
nts that s
uppor
t our Trust pr
iori
ty an
d we are de
eply
co
mmit
ted to addr
ess
ing the is
sue
s that mat
ter
, incl
uding
pri
cing a
nd acc
ess
, globa
l hea
lth, the e
nviron
ment, a
nd
inclusion
and div
ersity.
Dur
ing 2021
, we m
ade goo
d progr
ess a
cros
s many of the
se
are
as
. W
e reta
in a sec
tor
-le
ading p
ositi
on in the D
ow Jone
s
Sustainability Index. Our leading work in
improving
global health
and tacklin
g ant
imicrobial
resistance w
as recognised
by
the
Acces
s
to Medicine Foundation
through t
op rankings in their
Acc
es
s t
o Me
dicin
e Index a
nd AM
R ben
chmar
k. T
he WHO
recommended our malaria
vaccine f
or wider
use in ch
ildren in
regions with
moderate
to
high
malaria transmission. W
e
launched ne
w aspirational
gender and
ethnic
diversity targets,
to
increase representation a
t senior
levels,
alongside a
review
of re
crui
tment pr
oce
sse
s at all level
s to make sur
e we are
re
aching a
nd att
racti
ng diver
se ca
ndid
ates. A
nd we made
str
ong pro
gres
s on our 20
30 clim
ate and natur
e goal
s,
including
large-scale renewable
energy in
vestments
at two
maj
or manu
factu
ring si
tes, jo
ining a c
oalit
ion to cur
b
defo
rest
ation
, and inve
sting in R
&D to cut gr
eenh
ouse ga
s
emi
ssio
ns from o
ur meter
ed dos
e inhal
ers by up to 9
0%
(
see p
age 39).
1
L
ewi
s S & Ma
slin M, F
ive thing
s you ne
ed to kn
ow abo
ut the Gla
sgo
w
Clim
ate Pac
t, World E
conomic For
um
, 15 Novem
ber 202
0
2
Ritchie H an
d Ros
er M, C
O
2
emi
ssion
s by fu
el, O
ur World in Dat
a, L
as
t
acc
ess
ed 19 Janua
ry 20
22
GS
K Ann
ual R
epor
t 2021
17
Strategic report
Governance and remuneration
Financial statements
Investor information
In
novation i
s at the hea
rt o
f achiev
ing our pu
rpos
e – to unite
sci
ence
, tale
nt and tec
hnolo
gy to get A
head of d
isea
se
T
o
gethe
r
. I
t’s by dis
coverin
g and deve
loping n
ew vacci
nes
and m
edici
nes th
at we help pat
ients a
nd make a la
rge-
scal
e,
pos
itive i
mpact o
n human h
ealt
h throug
h preventi
on and
treatment
of disease.
R&D i
s the co
re of our in
novation
. In 2021
, we inve
sted £
5.3
bill
ion in R&
D – 3.
5% AER mo
re than 2020 – to e
nhanc
e our
pipeline of v
accines and medicines. Through our own work,
and p
ar
tner
ships w
ith othe
r busi
ness
es and a
cade
mia
, we
cur
rentl
y have 2
1 vacci
nes an
d 43 medi
cine
s in develo
pment
.
Ma
ny have the pote
ntial to b
e ﬁrst o
r bes
t
-in-
clas
s. I
n all we do,
we enc
oura
ge our tea
ms to purs
ue bol
d rese
arch
, backe
d by
data and science and underpinned by
clear accountabilit
y
.
We have stre
amlin
ed our R&
D govern
ance to al
low us to
keep u
p this pac
e. In 2021
, we switch
ed from s
epar
ate clini
cal
devel
opmen
t orga
nisati
ons for va
ccine
s and me
dicin
es to a
single combined
organisation. This
will hel
p us mak
e sure
we
inves
t in the pr
ogra
mmes w
ith the b
igges
t impa
ct for pati
ents
and u
nlock s
cient
iﬁc sy
nergi
es acr
oss pr
eventio
n and tre
atment
.
Our app
roach to R&D
T
o d
eliver t
rans
format
ional v
accin
es and m
edici
nes
, our R&D
app
roach i
s to focus o
n the sci
ence of t
he immu
ne system
,
hum
an gene
tics a
nd advan
ced tec
hnolo
gies
, such a
s ar
tiﬁ
cial
intelligence and machine
learning.
We prior
itis
e rese
arch i
nto vacci
nes an
d medic
ines ac
ros
s our
four t
herap
euti
c area
s of infe
ctiou
s dise
ases
, HI
V
, oncol
ogy,
and i
mmuno
logy in
cludi
ng resp
irator
y. W
e also r
emai
n open to
opp
or
tuniti
es outs
ide the
se co
re are
as whe
re the sc
ienc
e align
s
with our
strateg
ic approach.
Our pipeline consists of 64 po
tential v
accines and medicines
wit
h more th
an 70% that m
odulate th
e immun
e system
. In 202
1
,
we moved 19 ass
ets into pha
se I or p
hase I
I tri
als.
Spe
eding up the p
ace of discover
y and
dev
elopment
Th
e produ
ctivi
ty of o
ur R&D is i
ncre
asing
. Sinc
e 20
1
7
,
we’ve doub
led th
e number o
f ass
ets in ph
ase I
II o
f clinic
al
devel
opmen
t to 2
2 and c
ut overa
ll cycle ti
mes ac
ross
devel
opmen
t by 20%
. In add
ition
, in 2022 we antic
ipate
mil
estone
s on up to 7 of th
e 1
1 pote
ntial new va
ccin
es and
med
icine
s iden
tiﬁe
d as key futu
re grow
th dr
ivers
, incl
uding
Apretude
wh
ich wa
s approve
d at the end o
f 202
1 and
our respiratory syncy
tial virus (
RSV) vaccine candidate for
older adults.
Thi
s growi
ng pace h
elps u
s make a dif
fer
ence to mo
re
peo
ple’s lives
. For in
stan
ce,
Bl
enrep
(belant
amab mafodotin)
,
a tre
atment fo
r multi
ple myelo
ma, g
aine
d regul
atory a
pprova
l
jus
t two yea
rs af
ter the s
tar
t of its ﬁ
rst p
ivotal s
tudy. And ou
r
COV
ID
-
1
9 treat
ment, s
otrovim
ab, ach
ieved em
ergen
cy use
auth
oris
ation f
rom the F
DA just 1
3 month
s after o
ur par
tne
rship
wit
h Vir Bi
otechn
ology b
egan i
n Apri
l 2020, when t
he mole
cule
was s
till in p
recli
nica
l phas
e.
I
n
n
ova
t
i
on is a
t t
he c
o
re o
f w
hat we d
o. I
n 20
2
1, w
e co
n
ti
nu
ed to
streng
t
he
n our p
i
pel
ine o
f va
cc
i
n
es an
d med
ici
n
es, app
l
y o
ur growing
ex
per
t
ise and par
tners
h
i
ps i
n t
ec
h
no
logy and data, and i
ncrease the
prod
u
cti
vi
ty o
f our R&D. I
t ha
s been a y
ear of new la
u
n
c
hes, regulato
ry
app
rovals an
d i
m
po
r
ta
n
t cl
i
n
ical stud
i
es, tu
rni
ng o
ur e
xper
tise i
n
t
o
transfo
r
mat
i
o
nal vacci
nes and m
ed
i
c
i
nes f
o
r pa
t
i
en
ts.
Inno
v
ation
–
Strong pipeline of
2
1
vaccines and 43 medicines, many
wit
h the poten
tial to be ﬁ
rst or b
est-in
-cla
ss op
por
tuniti
es
for pa
tients
, 22 of whi
ch are in p
ivota
l trial
s
–
Ap
proval in t
he US for
Apre
tude
, our
long-acting HIV
preve
ntati
ve thera
py
–
Xev
udy
(
sotrovimab
), our
monoclonal
antibody
treatmen
t
for C
OVID
-
1
9, app
roved or a
uthor
ised fo
r condi
tiona
l/
temp
orar
y us
e in the US
, UK
, EU an
d over 1
2 oth
er
countri
es
–
Ap
proval fo
r
Jemperli
, as a tre
atment fo
r endo
metri
al
ca
ncer a
nd cer
ta
in soli
d tumour
s
–
Positiv
e phase III data f
or daprodusta
t for
patien
ts wit
h
ana
emia of c
hroni
c kidn
ey dise
ase
–
20+ dea
ls execu
ted sec
uring ac
ces
s to ﬁve nove
l clinic
al
asset
s
–
Approximat
ely 7
0% of
our targets
in research are
genetically v
alidated,
and published
scientiﬁc research
show
s that gen
etica
lly val
idated t
arget
s are at le
ast t
wic
e
as li
kely to be
come me
dici
nes
Pharmaceuticals and V
accines highl
ights
18
GS
K Ann
ual R
epor
t 2021
Innov
ation
co
ntinued
Leading progress
We
’ve had 13 major n
ew vaccin
es and m
edic
ines ap
proved
sin
ce 20
1
7
. T
his put
s us in the top q
uar
tile in o
ur indu
str
y
. For
201
8
-
20, we had a gr
eater th
an 90
% succ
ess r
ate for our
pivo
tal stu
dies
, comp
ared to 77% ac
ross th
e indus
tr
y
. Our
201
7-
20 numbe
r of laun
ches p
er billi
on doll
ars of R
&D
spe
nding wa
s over 50
% bet
ter than p
eer med
ian.
Lifecycle innov
ation
As we
ll as devel
oping n
ew treat
ments
, we look fo
r innovati
on
acr
oss th
e lifecyc
le of our ex
istin
g vacci
nes an
d medic
ines by
ﬁnd
ing new ways fo
r them to hel
p patien
ts, ei
ther on th
eir own
or c
ombine
d with ot
her the
rapi
es. S
ince 201
7
, we have
inc
rea
sed the nu
mber of l
ifecyc
le proj
ects p
er as
set by 50
%.
E
xamples are
:
–
Benlyst
a
for the tr
eatme
nt of both sy
stemic l
upus
er
ythemat
osus and l
upus nephrit
is.
–
Nucala
, ou
r anti I
L
-5 bi
ologi
c, whi
ch is now al
so app
roved
in th
e US and Eu
rope for s
evere eo
sino
philic a
sthm
a,
hypereosin
ophilic
synd
rome, eosi
nophil
ic granu
lomat
osis
and poly
angitis
and chro
nic rhin
osinusitis
with nasal polyps.
–
Our shingles vaccine,
Shingrix
, wh
ich was a
pprove
d for wid
er
use i
n severa
l marke
ts inclu
ding th
e US and C
anada
.
–
E
xpan
sion of o
ur clini
cal tr
ial pr
ogra
mme for
Zejula
into
new
indications
such as breast and l
ung cancer
.
–
Th
e contr
ibutio
n of
T
relegy Ellipta
to re
spir
ator
y dise
ase a
nd
lung h
ealt
h conti
nues to evol
ve.
Tr
e
l
e
g
y
has ex
pand
ed the
indi
cated u
se from c
hroni
c obst
ructi
ve pulmo
nar
y dise
ase
(COP
D
) to incl
ude as
thma in th
e US.
Str
ategic par
tne
rships – joining fo
rces to make
progress
Through strategic partnership
s
and business development,
we joi
n force
s with c
omme
rcial a
nd aca
demic p
ar
tner
s to open
up new aven
ues of di
scover
y or a
dvanc
e the devel
opmen
t of
new po
tential m
edic
ines
. In 202
1 alo
ne, we an
nounc
ed more
tha
n 20 par
tner
ship
s and co
llabo
ratio
ns that prov
ided u
s
acc
es
s t
o ﬁve n
ovel clini
cal a
sset
s, inc
ludin
g with i
T
eo
s in
immuno-oncology
, Alector in
immuno-neurology and
Vir
Bi
otechno
logy in ﬂ
u. We have also i
nvested i
n t
ech
nolog
ies
that
expand o
ur capabilit
ies in h
uman gene
tics and
artiﬁ
cial
intell
igence/
machine learning
(AI/M
L)
.
Genet
ics
, genomics and
technology
The s
ucce
ss of our R&
D res
ts not j
ust on ﬁ
nding new
tr
eatm
ent
s, b
ut on get
t
ing bet
ter a
t how we ﬁnd t
hem
. The
key to th
at is com
bining g
enet
ics
, gen
omics a
nd advan
ced
technologies
.
T
o f
ulﬁl o
ur purp
ose to get A
head o
f dise
ase T
ogethe
r
, we
prioritise gene
tically v
alidat
ed target
s t
o increase ou
r probabil
ity
of successfully delivering
an appro
ved
vaccine or
medicine.
Approximat
ely 7
0% of
our targets
in research are
genetically
validat
ed an
d publ
ished scient
iﬁc research show
s tha
t
gen
etica
lly val
idated t
arget
s are at le
ast t
wic
e as like
ly
to bec
ome me
dicin
es. We’re now abl
e to harne
ss ad
vance
d
technologies
to
convert insights
from hu
man genetics and
gen
omic
s to improve th
e prob
abili
ty of su
cce
ss for R&
D.
Mak
ing bet
ter predi
ction
s to help pati
ents
Th
e last d
ecad
e has se
en a revol
ution i
n geneti
c data an
d
gen
omic
s. A
I and mac
hine le
arnin
g help us ﬁ
nd pat
terns i
n
dat
a on a larg
er sc
ale and f
ar mor
e quick
ly tha
n befor
e. This
is le
ading to th
e ‘
digi
tisat
ion of bi
ology
’ and is a
llowin
g us to
bet
ter und
erst
and th
e root ca
use of ma
ny dise
ase
s.
At GS
K we par
tner w
ith the wo
rld's be
st min
ds and le
ading
ins
tituti
ons in the
se ar
eas
. W
e are a
lso inves
ting in o
ur own
ca
pabil
itie
s inclu
ding our L
ondon A
I hub, w
hich is u
sing
biomedical informat
ion, AI/M
L and
computing
platforms t
o
unl
ock new in
sights f
rom our g
eneti
c and cli
nica
l data
.
With these
capabilities w
e ha
ve
foun
d ne
w pot
ential
combinations
for e
xisting t
herapies, such as
Blenrep
in
co
mbinati
on wit
h a gamma s
ecre
tas
e inhibi
tor
, whic
h could
all
ow for gre
ater patie
nt bene
ﬁt.
Forming t
he right par
tne
rships in genet
ics
and genomics
Our collaboration
with consumer
genetics and
research
co
mpany 23a
ndM
e has yi
elde
d more th
an 40 novel r
ese
arch
pro
gram
mes
, one of wh
ich is now i
n phas
e I for the tr
eatme
nt
of c
ance
r
. We’ve als
o worked w
ith the U
K Bio
bank si
nce it
s
foun
ding an
d have joine
d the UK
’s most re
cent b
iore
sourc
e,
Our Futu
re Health. Additio
nally
,
we are
supporting new
er
dat
aset
s that featu
re diver
se po
pulati
ons, s
uch as th
e Gene
s
and H
eal
th Con
sor
tium in E
as
t Londo
n and the B
lack
Representation in
Genetic R
esearch Study with
23andMe.
In l
ate 202
1
, we a
nnounc
ed a ﬁve
-year c
olla
borati
on wit
h the
Uni
versi
ty of O
x
ford whi
ch wil
l focus on n
eurod
egen
erative
dis
eas
es. T
he new In
stitu
t
e wil
l leverag
e advan
ced tec
hnolo
gies
to buil
d on insi
ghts fr
om huma
n geneti
cs to acc
eler
ate the mo
st
promising areas fo
r drug d
iscovery.
GS
K Ann
ual R
epor
t 2021
19
Strategic report
Governance and remuneration
Financial statements
Investor information
In g
enomi
cs, o
ur par
tne
rs inc
lude the wo
rld’s pre
emine
nt
exp
er
ts: the Bro
ad Ins
titute in B
oston a
nd the L
abor
ator
y
for G
enomi
cs Re
sear
ch (LGR), wh
ich we es
tabl
ishe
d with
the U
niver
sit
y of Cali
forni
a in 20
1
9
. They’re he
lping u
s ﬁnd
gen
etica
lly val
idated dr
ug tar
gets by inve
stig
ating ar
eas
inc
luding g
eneti
c variat
ions an
d their c
onse
quenc
es for th
e
fun
ction o
f cells
. Worki
ng with t
he pion
eers o
f CRI
SP
R
tech
nolog
y at LGR
, we’
re unc
overing n
ew know
ledg
e about
disease mechanisms for immunology
,
oncology and neurology
in 1
2 dif
feren
t progr
amme
s. M
eanwh
ile, ou
r work wit
h UK
bio
t
ech A
dres
tia is leve
ragin
g a new are
a call
ed synth
etic
via
bilit
y to ﬁnd n
ovel drug t
arge
ts in har
d to treat di
sea
ses like
front
otempo
ral dement
ia (FTD)
.
We are al
so fundi
ng PhD s
tuden
tship
s at multip
le unive
rsi
ties
and i
nstitu
tes, i
ncludi
ng the Cr
ick I
nstitu
te, the Uni
vers
ity of
Ade
laide i
n Austr
alia a
nd Unive
rsi
ty of O
xfo
rd, St
anford
Uni
versi
ty, Camb
ridg
e
’s Cent
re for A
I and Me
dicin
e, and
War
wick U
niver
sit
y
. This w
ill help m
ake sur
e we have sust
aine
d
ta
lent po
ols and t
he righ
t skil
ls in the c
oming ye
ars
.
Using AI/
ML to build sc
ale and spee
d
In 2021
, we star
ted a new p
ar
tner
ship wi
th Kin
g’
s Col
lege
Lon
don us
ing AI
/M
L to under
sta
nd why so
me patie
nts res
pond
to ca
ncer tr
eatme
nt, whi
le dise
ase p
rogr
esse
s in othe
rs. T
he
technology will
tell
us more about
the role
of tumo
ur genetics,
the t
umour
microenvir
onment
and response
to
therapies. In
add
ition
, the tech
nolog
y will ai
d the cre
ation o
f t
ool
s to help
make bett
er clinical decisions
for
personalised treatment.
NVI
DIA
’
s Cambridge-2 supercomput
er is
performing a similar
role for
us in immun
o-oncology by fusing
different datasets
and b
uildin
g larg
e-sc
ale mo
dels to he
lp us deter
mine th
e best
tre
atment fo
r patie
nts. A
nd the la
rges
t ever chip p
roce
sso
r
for A
I, bu
ilt by Sil
icon Valley s
tar
t-up C
erebr
as
, is help
ing us
construct larger
-scale genetic
models tha
t learn from
DNA
to help d
eco
nstru
ct how gen
es ope
rate in di
ffe
rent di
sea
se
co
ntex
ts.
E
xtensive v
accine plat
form technologies
Our wo
rk in vac
cine pl
atfo
rm techn
ologi
es, w
ith the b
roade
st
por
t
folio i
n the indu
str
y
, enab
les us to s
elec
t the mos
t
promising t
echnology approa
ch (
or combinations of
different
platform techno
logies
) t
o de
velop
new
vaccines pre
viously
not th
ought possible. Pla
tform technologies
such as adjuv
ants,
bioconjugation, g
eneralised modules f
or membrane an
tigen
(GM
MA) an
d adenov
irus ve
ctors c
an be u
sed to make va
ccin
es
aga
inst a r
ange of di
ff
erent p
athoge
ns and al
low for a ta
ilore
d
approach t
o deliv
er success. This includes mRNA
, a
ke
y focus
are
a for our d
evelopm
ent as we s
ee it a
s a criti
cal p
latfo
rm
technology and
major opportunity for the fut
ure of v
accines.
W
e’
re
investing in
it signiﬁcantly,
including through
our
co
llabo
ratio
n with Cu
re
V
ac and by b
uildin
g on our in
-hous
e
end-t
o-end mRNA de
velopmen
t and
manufactu
ring capabilit
ies.
We are foc
using o
ur ef
for
ts on mod
iﬁe
d and non
-modi
ﬁed
mRNA technologies opt
imised for
high pr
otein
expression t
o
imp
rove mR
NA poten
cy and tol
erabi
lit
y
.
Di
gitis
ation
, machin
e lear
ning an
d AI ar
e helpi
ng us spe
ed
up the v
accin
e rese
arch a
nd manu
factu
ring pr
oce
ss. I
n 202
1
,
we ann
ounce
d a succ
es
sful pr
oof of co
ncep
t of a digit
al tw
in
app
roach f
or vacci
ne manu
factu
ring wi
th Sie
mens an
d Atos.
Th
e digit
al tw
in use
s machi
ne lea
rning a
nd mode
lling to pr
ovide
new in
sights f
or optim
ising th
e develo
pment a
nd manu
factur
ing
of vaccines.
Infec
tious diseases
The wo
rld fac
es a per
sist
ent th
reat f
rom infe
ct
ious
dise
ases t
hat no
t only cl
aim lives b
ut also p
ut st
rain on
he
alth
care s
ystem
s. Al
most h
alf th
e vacci
nes and
medicin
es in
our pipeline addre
ss infectio
us
diseases
.
We are ta
rgetin
g severa
l new laun
ches by 2026
, inclu
ding our
vac
cine c
andid
ate for RSV in o
lder ad
ults, a
nd gep
otidac
in, an
anti
bioti
c to treat un
comp
licate
d urina
ry tr
act in
fecti
ons (
uUT
I).
Bot
h have the poten
tial to be ﬁ
rst a
nd bes
t
-in-
clas
s. We als
o
aim to c
ompl
ete ﬁve pro
of of con
cept s
tudie
s for new vac
cine
ca
ndidate
s by 2023. Th
ose th
at succ
ess
fully d
emons
trate pr
oof
of co
ncep
t will be r
eady to move to r
egist
ratio
nal cli
nica
l trial
s.
In 2021
, we moved mult
iple vac
cine c
andi
dates into c
linic
al
trials. They includ
e a men
ingitis
ABCW
Y second
generation
vaccine and vaccine candidat
es for
Klebsiella pneumoni
ae
,
cy
tomeg
alovi
rus (CM
V) an
d new str
ains of va
rice
lla
(
chi
ckenpox). O
ur lates
t trial
s also i
nclud
e protein
-bas
ed,
adj
uvanted C
OVI
D-
1
9 vac
cine
s, whi
ch we are d
evelopi
ng
in collaboration
with o
ther companies.
Innov
ation
co
ntinued
20
GS
K Ann
ual R
epor
t 2021
Innov
ation
co
ntinued
Our combined exper
tise
in vaccines and medicines means
we are
uniquely posit
ioned t
o focus
on connections
between
treatment
and pre
vention.
Examples include:
–
COV
ID
-
1
9, for whi
ch we are wo
rki
ng on both t
reatm
ents
and vaccines
–
RSV and respiratory conditions, through our effor
ts
to
devel
op RSV vac
cine
s for the po
pulati
ons mos
t at risk
,
as we
ll as to deve
lop futu
re res
pirator
y me
dicin
es
–
Hepati
tis B, through our antise
nse oligonucleoti
de and
vaccine t
echnologies in dev
elopment
–
In
ﬂuen
za, f
or whic
h we are deve
lopin
g vacci
nes and
antibod
ies
Th
e close c
olla
borat
ion in R&
D acro
ss our re
sea
rch ar
eas
hel
ps us inn
ovate in are
as whe
re mult
iple too
ls might b
e
required, such
as antimicrobial
resistance (AM
R
) or
pandemic
re
spons
e. By dr
awing on t
he cros
sover
s bet
ween our wo
rk in
vac
cines a
nd pha
rmac
eutic
als we en
hanc
e our abil
ity to
devel
op innovat
ive solu
tions to m
eet pati
ent nee
ds.
Shingles
Ar
ound one i
n three p
eopl
e will deve
lop shi
ngles i
n their li
fetim
e.
In 201
7
, our
S
hingrix
vacci
ne sig
nalle
d a step cha
nge in
preve
nting th
is pain
ful and p
otentia
lly ser
ious il
lnes
s. I
t’s the ﬁr
st
non
-live sh
ingle
s vacci
ne, and i
t comb
ines a s
peci
ﬁc sub
unit
anti
gen wi
th an adj
uvant to su
stai
n the immu
ne res
ponse
.
In 2021
, we contin
ued to exp
and acc
es
s to
Shingrix
. We
lau
nched i
t in nine n
ew market
s
: Aus
trali
a, Si
ngap
ore, H
ong
Kong & M
acau
, Ita
ly
, Spa
in, De
nmar
k, F
inland
, Aust
ria and t
he
UK
. Sw
itze
rland f
ollowed i
n earl
y 2022.
Reg
ulator
s in the US
, Cana
da, A
ustr
alia
, Hong Ko
ng and
Sin
gapo
re also e
xten
ded the i
ndic
ation for t
he vacc
ine to adul
ts
1
8 year
s and old
er at incr
eas
ed ris
k.
Shing
rix
is the ﬁr
st shi
ngles
vac
cine ind
icate
d for this ex
pand
ed use.
We also ac
hieved r
egulato
ry a
pproval
s for the vac
cine i
n South
Kore
a, B
ra
zil, Swi
tzer
land a
nd T
a
iwan, i
nclud
ing for the 18
+ at
increased risk populatio
n. W
e gain
ed new
recommendations
for
the va
ccine i
n Ita
ly
, Spa
in, Aus
trali
a and Swi
tzer
land
.
In addition, t
he US’
s
National Comprehensive
Cancer Network
(NCCN) Survivorship Guidelines were
updat
ed t
o preferen
tially
recommend
Shingrix
for c
ance
r sur
vivor
s aged 5
0 years a
nd
old
er
, and the N
CC
N Guid
eline
s on the P
reventio
n and
T
reatment of Cancer
-Relat
ed Infections
were
updated
with
Shingrix
recommendations for aut
ologous hemat
opoietic cell
transplantation
(HCT), multip
le my
eloma and
lymphoma
pati
ents
. The Gl
obal I
nitia
tive for Ch
ronic O
bstr
ucti
ve Lung
Di
sea
se (
GO
LD
) guid
eline
s were al
so upd
ated to rec
ommen
d
shi
ngles va
ccin
ation to pr
otect aga
inst s
hingle
s in adul
ts with
CO
PD age
d 50 year
s and o
lder.
RSV
Res
pirato
ry Sy
ncy
tial V
irus (R
SV) i
s a ver
y commo
n viru
s and
a le
ading c
ause of a
cute res
pirato
ry i
nfecti
ons. I
n olde
r adult
s,
RSV can e
xacerbate
underlying condit
ions and
lead to
pne
umoni
a. I
t caus
es 360,
000 h
ospi
talis
ation
s and 24,00
0
de
aths in over-
60s ea
ch year i
n high-
incom
e count
ries
, yet
rem
ains on
e of the ma
jor infe
ctiou
s dise
ase
s witho
ut a vacc
ine.
RSV i
s the lea
ding ca
use of seve
re res
pirato
ry i
nfecti
ons in
inf
ants and c
aus
es more h
ospi
tali
satio
ns than in
ﬂuen
za in thi
s
vulnerable group.
Our p
rogr
amme to he
lp preven
t RSV con
sists o
f two ca
ndid
ate
vac
cines
, the mo
st adva
nced o
f which i
s being te
sted in a
dults
age
d 60 year
s and over. It us
es a rec
ombi
nant pr
e-fus
ion F
anti
gen co
mbine
d with ou
r AS01 adjuva
nt. Th
e AS01 adjuv
ant
is a key in
gredi
ent in
Shingri
x
and boost
s the
immun
e response,
hel
ping to overc
ome th
e chall
enge
s ass
ociate
d with pr
otectin
g
old
er peo
ple. We anti
cipate ph
ase I
II d
ata on thi
s cand
idate
vac
cine in th
e ﬁrs
t half of 2022
. W
e stopp
ed enro
lment a
nd
vac
cinati
on in tri
als of ou
r RSV mater
nal ca
ndidate va
ccin
e in
Fe
bruar
y 2022 fol
lowing fe
edba
ck from t
he Ind
epend
ent Dat
a
Mo
nitori
ng Com
mit
tee (ID
MC). Fur
the
r analy
sis to bet
ter
und
erst
and s
afety d
ata fro
m thes
e trial
s is ongo
ing.
We have stopp
ed develo
ping a ph
ase I
I RSV pa
ediatr
ic
ca
ndidate va
ccin
e base
d on an ad
enovir
us vecto
r
, w
hich wa
s
not us
ing the p
re-fus
ion F an
tigen
, bec
ause it wa
s unlike
ly to
mee
t our ef
ﬁc
acy tar
get. We are c
urre
ntly inves
tigat
ing new
tech
nolog
ies to add
res
s this imp
or
tant m
edic
al nee
d.
Meningit
is
Ab
out 1
.2 mil
lion pe
ople deve
lop inva
sive me
ningo
cocc
al
dis
eas
e (IM
D
) ever
y year, with i
nfant
s, young c
hildr
en and
adolescents particularly vu
lnerable. E
ven
with early
diagnosis
and a
dequa
t
e tre
atment
, 5% to 1
0
% of pati
ents wi
th bacte
rial
men
ingiti
s die, of
ten wi
thin 24 to 48 hour
s of sym
ptoms st
ar
ting.
Lef
t unt
reated
, menin
gitis is f
atal in u
p to 50% of c
ase
s and ca
n
ca
use br
ain dam
age, h
eari
ng los
s or disa
bilit
y in 1
0% to 20
% of
sur
v
ivors
.
We are a le
ader in I
MD p
rotect
ion, w
ith over ten mi
llion p
atients
vac
cinated i
n 202
1 alone
.
Bexsero
, our me
ningi
tis B vacc
ine,
and
Me
nveo
, our m
eningi
tis ACW
Y vacc
ine, tog
ether he
lp
prot
ect agai
nst most
IMD cases
.
In 2021
, GSK ﬁl
ed a sub
miss
ion to the F
D
A for a fu
lly liq
uid
ver
sion of
M
enveo
. T
his woul
d simpl
ify a
dmini
strati
on of the
vaccine b
y healthcare pro
viders.
We are devel
oping t
wo Me
nAB
CW
Y pent
avalent (5
-in-
1
)
vac
cines
, whi
ch would me
an jus
t one vac
cine, r
ather th
an two
,
cou
ld be us
ed to help p
rotect ag
ains
t all ﬁve m
ajor di
sea
se-
causing serogroups
.
The ﬁrst generation MenA
BCWY vaccine
ca
ndidate i
s in pha
se II
I cli
nica
l tria
ls and wa
s create
d by
co
mbinin
g the tech
nologi
es we have us
ed to develo
p our
exi
sting
Bexsero
an
d
Menveo
va
ccin
es. I
n 202
1
, we a
lso st
ar
ted
a pha
se I/
II t
rial of a s
eco
nd gene
ration p
entava
lent c
andid
ate
for broader
age in
dications and
strains.
GS
K Ann
ual R
epor
t 2021
21
Strategic report
Governance and remuneration
Financial statements
Investor information
Innov
ation
co
ntinued
C
O
V
I
D
-19
Gl
oball
y
, more th
an 400 m
illion c
as
es of COV
ID
-
1
9 have bee
n
recorded since the
outbreak emerged, result
ing in
the deat
hs of
over ﬁ
ve and a hal
f milli
on peop
le. Wi
th our pa
rtn
ers
, we have
be
en develo
ping tre
atmen
ts as wel
l as sever
al vacc
ines
.
T
re
atment – harnessing
monoclonal antibodies
Al
ongsi
de vacc
ines
, ef
fecti
ve treatm
ents ar
e crit
ical to s
uppor
t
pati
ents an
d commu
nitie
s throu
gh the nex
t pha
ses o
f the
pan
demic
. Som
e COVI
D-
1
9 pat
ients a
re at a high
er ris
k of
hos
pita
lisat
ion and d
eath du
e t
o ris
k factor
s suc
h as old ag
e
or comorbidities. For
these pa
tients,
it will
remain i
mportant to
have ac
ces
s to earl
y
, ef
fecti
ve treatm
ent opti
ons inc
luding
monoclonal an
tibodies.
Thr
ough ou
r colla
bora
tion wi
th Vir B
iotechn
olog
y
, which b
egan
in 2020, we d
evelope
d
Xevu
dy
(sotrov
imab) – a SARS
-C
o
V
-2
mon
oclon
al anti
body th
at works to p
revent the v
irus f
rom
enter
ing an
d infec
ting he
althy ce
lls wit
hin the b
ody. In the ﬁ
rst
hal
f of 202
1
, GSK an
d Vir an
nounc
ed res
ults fr
om CO
ME
T
-
IC
E, a p
has
e II
I tria
l that inves
tigate
d intraven
ous (I
V) inf
usio
n
of sot
rovima
b in adul
ts with m
ild or mo
derate C
OVID
-
1
9 at hig
h
risk of prog
ression to se
vere
disease.
Sotr
ovima
b is autho
rise
d for eme
rgenc
y use in th
e US and
,
und
er the br
and nam
e
Xevu
dy
, has be
en gra
nted a mar
keting
authorisation
in the
EU. It
has conditional o
r provision
al market
ing
auth
oris
ation
s in Gre
at Bri
tain
, Swit
zerla
nd, Aus
trali
a and Sa
udi
Arabia. It has also
been appro
ved
via J
apan
’
s Special
Approv
al
for Emergency P
athw
ay
. T
emporary authorisations for
sotrovimab
have al
so bee
n grante
d in sever
al other c
ountr
ies
.
Sotr
ovima
b binds s
peci
ﬁca
lly to a reg
ion of the s
pike pro
tein
that i
s les
s likely to ch
ange, i
ncre
asin
g the poten
tial tha
t it may
rem
ain ef
fec
tive aga
inst va
riant
s that eme
rge over ti
me. Dat
a
from preclinical in
vitro st
udies demonstra
te
that so
trovimab
ret
ains ac
tivi
ty aga
inst a
ll tested va
rian
ts of con
cern a
nd inter
est
to date, i
nclud
ing Del
ta and O
micr
on.
Al
ong wit
h Vir
, we are c
ontin
uing to pro
gres
s the cli
nica
l
development
programme for so
trovimab and
are exploring
mor
e conveni
ent met
hods of a
dminis
trati
on. In N
ovembe
r
,
we rec
eive
d posi
tive res
ults fr
om the C
OM
ET
-
T
AI
L tri
al
inves
tigati
ng the int
ramu
scula
r (IM) r
oute of adm
inist
ration
of sot
rovima
b as an e
arly t
reatme
nt for mil
d-to-mo
derate
COVID-
1
9 in
high-
risk, non-hospital
ised adu
lts a
nd
pae
diatri
c patie
nts (
1
2 and over). Know
ing that t
he grea
t
es
t
nee
d for ef
fect
ive prop
hylac
tic tre
atment
s is likely to c
ome
from immuno-compromised people, GSK and Vir are
also
supporting clinical studies
speciﬁc to th
is popula
tion.
COVI
D
-
19 vaccin
es – using te
chnol
ogy to bo
ost
immune response
We are wor
king w
ith sever
al co
mpani
es on C
O
VI
D-
1
9 va
ccine
s
usi
ng our pr
oprie
tar
y adju
vant tec
hnolo
gy
. Adju
vants c
an make
vac
cines m
ore ef
fec
tive by boo
sting a
nd ex
tendin
g the bod
y’
s
imm
une res
pons
e. They a
lso ma
ke it pos
sible to p
roduc
e more
dos
es wi
th les
s antige
n, ena
bling th
e prod
uctio
n of more
vac
cine do
ses to add
res
s globa
l need
s.
Fol
lowing p
osit
ive pha
se II d
ata
, our vac
cine co
llabo
ratio
n
wit
h Sano
ﬁ bega
n phas
e II
I tria
ls in M
a
y 202
1
, in par
allel w
ith
a pro
gram
me of boo
ster stu
dies
. In De
cemb
er 202
1 we
ann
ounce
d posi
tive pre
limin
ar
y resul
ts show
ing that a s
ingle
booster
dose o
f the
adjuv
ant
ed recombi
nant
prot
ein-based
COVID
-
1
9 vaccine
candidate
delivered
consistently
strong
imm
une res
pons
es acr
oss al
l prima
ry va
ccin
es rec
eived
.
An
d, in Fe
brua
ry 2022, we a
nnounc
ed our i
ntentio
n to submi
t
app
licat
ions for r
egula
t
or
y app
roval of th
e vacci
ne in the US
and E
urope fo
llowi
ng the pos
itive r
ead out
s of both th
e boos
ter
and p
rima
ry ph
ase I
II t
rial
s with thi
s vacci
ne can
didate.
In D
ecem
ber 2021 we repo
rted p
osit
ive pha
se II
I dat
a for
the ad
juvan
t
ed pl
ant-ba
sed vac
cine we ar
e develo
ping wi
th
Me
dica
go, buil
ding on p
ositi
ve phas
e II r
esult
s annou
nced
ea
rlier i
n the yea
r
. B
ase
d on the
se data
, the va
ccine
, Covi
fenz,
was a
pprove
d in Cana
da in Fe
brua
ry 2022.
A thir
d vacci
ne usin
g our adj
uvant tec
hnolo
gy is in deve
lopm
ent
wit
h SK Bi
osci
ence
. If suc
ces
sful
, we intend to di
stri
bute this
vac
cine glo
ball
y throug
h the COVAX f
acili
ty. The G
PB5
1
0
vaccine,
a self
-assembled nanoparticle v
accine targe
ting t
he
receptor
-binding domain of t
he SARS-
Co
V
-
2
spike prot
ein,
st
ar
t
ed ph
ase I
II t
rial
s in Augus
t 202
1
.
We are al
so develo
ping se
cond g
ener
ation mR
NA C
OVID
-
1
9
vac
cine c
andid
ates usi
ng modi
ﬁed an
d non-m
odiﬁ
ed RN
A
vac
cine tec
hnolo
gies a
s par
t of our c
ollab
orati
on with C
ureV
ac.
In Au
gust a
nd Novemb
er 202
1 we ann
ounce
d enco
uragi
ng
results from
a range of
pre-clinical studies.
Ot
her infec
tious disease
s
Diphth
eria, tetanus and per
tussis
In E
urope
, heal
thca
re provi
ders c
an now gi
ve
Boostrix
,
our combination t
etanus, diphtheria and pertus
sis
vaccine,
togeth
er with on
e additional
vaccine
such as
Shingrix
, or
an una
djuvan
ted
or in
activa
ted
seasonal inﬂu
enza va
ccine.
Thi
s will s
ave patien
ts multi
ple vacc
inatio
n visi
ts and ma
ke
healthcare more efﬁ
cient.
Chronic hepatitis B
Over 300 mill
ion people suffer from
chronic hepa
titis B, and
eac
h year a
round 8
8
7
,0
00 die f
rom the de
comp
ensa
ted
cir
rhos
is or live
r can
cer it c
an ca
use.
Our c
andi
date vacc
ine, cu
rrent
ly in pha
se I
/I
I, is a t
argete
d
immunotherapy combining dif
ferent t
echnologies
,
including our
adj
uvant AS
0
1 also u
sed in
Shi
ngrix
and in ou
r RSV can
didate
vac
cine for o
lder ad
ults
. It aim
s to activate f
uncti
onal vi
rus-
spe
ciﬁ
c T
-
cell an
d B-c
ell re
spons
es and r
estor
e immun
e
co
mpetenc
e agai
nst hep
atitis B v
irus (H
BV). T
his im
mune
restoration
could lead t
o a
functional
cure of
chronic
hepatitis
B,
whi
ch is de
ﬁned a
s contr
ollin
g the vir
us with
out er
adica
ting it
fro
m the bod
y
. A func
tiona
l cure co
uld re
duce th
e risk of
long-t
erm complication
s of
chronic hepa
titis B
infection,
liver
inﬂ
ammat
ion and c
anc
er
. W
e expe
ct pro
of of con
cept d
ata in
2023.
22
GS
K Ann
ual R
epor
t 2021
Innov
ation
co
ntinued
We are al
so develo
ping be
pirovi
rse
n, an HBV a
ntise
nse
oli
gonuc
leotid
e, whi
ch has t
he potenti
al to be a ﬁr
st-in-
clas
s
functional cure
for
chronic HBV
and is
designed to
restore
the i
mmune sys
tem’
s natur
al abi
lity to e
liminate i
nfecte
d liver
ce
lls and p
rovide l
ong-ter
m contr
ol of HBV. Our pha
se I
Ia
programme demonstrated
that bepiro
virsen can reduce
hepatitis
B surface antigen a
fter four
weeks o
f treatmen
t.
We antic
ipate dat
a from ou
r ongoin
g phas
e II
b progr
amme
in 2022.
Cy
tomeg
alovirus
CM
V is a se
riou
s heal
th risk fo
r babi
es. M
ost in
fants w
ith
co
ngenit
al C
MV are a
symp
tomatic at b
irt
h but sti
ll at risk o
f
long-t
erm health problems, including
hearing and sight
loss,
del
ayed develo
pment a
nd sei
zures
. In th
e US, C
MV is th
e
le
ading in
fecti
ous cau
se of bir
th d
efect
s. Ab
out one i
n 200
bab
ies is b
orn wi
th con
genit
al CM
V infe
ction
, and ab
out one
in ﬁ
ve of thos
e will have lo
ng-term h
ealth p
robl
ems.
Th
ere’
s cur
rentl
y no appr
oved vacc
ine, bu
t we are wor
king to
cha
nge that w
ith an ad
juvante
d subun
it vacc
ine that e
ntered
pha
se I/
II t
rial
s in 202
1
.
Antibiot
ics and antimicrobial re
sistance
Ant
imicr
obia
l resi
stan
ce (A
MR) is a
n urgen
t threat to p
ublic
he
alth. B
y under
minin
g the ef
fect
ivene
ss of ant
ibioti
cs, i
t
cur
rentl
y contr
ibutes to 70
0,00
0 death
s every ye
ar glo
bally,
a ﬁgu
re that is e
xpec
ted to incr
eas
e signi
ﬁca
ntly unl
ess a
ction
is t
aken. We’
re foc
using o
n orga
nisms w
ith the hi
ghes
t risk o
f
devel
oping A
MR a
s char
acter
ised by th
e Cen
t
er
s for Dis
eas
e
Co
ntrol a
nd Preve
ntion (CD
C
) and World H
eal
th Org
aniz
ation
(
W
H
O).
Me
dicine
s – developin
g new mec
hanisms
We are devel
oping g
epoti
dacin
, a novel me
chani
sm
topoisomerase inhibitor
, for uncomplicated
urinary tract
infe
ctio
ns (
uUT
I) and go
norr
hea
, in par
tne
rshi
p with th
e
Biomedical Adv
anced R
esearch and
Dev
elopment
Auth
ority
(BA
RDA) in the U
S. Th
is is the ﬁ
rst ti
me a new or
al antib
iotic
ha
s addre
sse
d thes
e infec
tions in ove
r 20 year
s. Ge
potid
acin
is cu
rrent
ly in pha
se I
II
.
Vacci
nes – targeting
resistant pathogens
We are usi
ng new sc
ienti
ﬁc ins
ights an
d techno
logie
s, in
cludin
g
adjuvants, mRNA
,
bioconjugation
and generalised
modules for
mem
bran
e antige
ns (
GM
M
A) to targ
et pathog
ens that c
reate a
sig
niﬁc
ant he
alth b
urden a
nd are li
kely to devel
op antib
iotic
resistance.
We have four vac
cine
s in clini
cal tr
ials
, agai
nst Sta
phylo
cocc
us
aureus, Clostridium
dif
ﬁcile,
Shigella and
Klebsiella. We
also
have oth
er prog
ramm
es that c
ould have a ma
jor imp
act by
reducing cases of diseases directly
or indirectly
contributin
g
to AM
R
, inclu
ding RSV a
nd tube
rculo
sis.
Staphylococcus
aureus i
s often resistant
t
o anti
biotics, with
multiple
drug-resistant strains already
in circula
tion. In t
he US,
meth
icill
in-re
sist
ant str
ains c
ause m
ore tha
n 300,
000 c
ase
s in
hos
pita
l patie
nts, an
d an es
timated 1
0,60
0 death
s. In 2021
,
our c
andi
date vacc
ine to preven
t prima
ry a
nd rec
urri
ng sof
t
skin tissue infections
from t
his pat
hogen ent
ered phase II.
In th
e US, C
lostr
idium d
if
ﬁcil
e caus
es mor
e than 20
0,00
0
ca
ses i
n hospi
tal pa
tients a
nd lea
ds to aroun
d 1
2,
800 d
eaths
ever
y yea
r
. I
n 202
1
, we progr
ess
ed the ph
ase I ﬁr
st-time
-in-
hum
an stud
y of our ca
ndida
te vaccin
e again
st this p
athoge
n.
Kl
ebsi
ella pn
eumon
iae ca
n caus
e severe i
nfecti
ons in th
e lungs
,
bla
dder, brai
n, live
r
, eye
s and bl
ood, a
s well a
s typ
es of
men
ingiti
s. Th
ere is no a
pprove
d vacci
ne, and r
esis
tanc
e to
many t
reatme
nts is gr
owing
.
Our c
andi
date vacc
ine, deve
lope
d with L
imma
T
ec
h, sta
rte
d
cli
nica
l develop
ment in J
uly 202
1
. If it s
ucce
eds
, it coul
d help
preve
nt most K
leb
siell
a-as
soci
ated infe
ction
s in peop
le who
are at
highest risk, including
older people
with underlying
co
nditio
ns like dia
betes
, kid
ney dise
ase o
r chron
ic liver d
isea
se.
Th
e vaccin
e is a tetrava
lent bi
oconj
ugate inc
ludin
g O-a
ntigen
to tar
get the s
erogr
oup ca
using m
ost inf
ectio
ns. We com
bine
the a
ntigen
s with ou
r propr
ieta
ry ad
juvan
t system
, which
ha
s shown
, with vac
cine
s like
Shingrix
, that i
t can he
lp
prov
ide str
ong imm
une re
spons
es in pe
ople of a
ll age
s
including older adults.
Shi
gella c
ause
s over 200
,000 d
eaths eve
ry ye
ar and i
s the
se
cond le
ading c
ause o
f diar
rhea
l death gl
obal
ly af
t
er ro
taviru
s.
There is current
ly no
widely a
vailable l
icensed vaccines t
o
protect
against Shigella
; and
the
related
threat
of gro
wing
anti-microbial resistance is
a signiﬁcant issue.
We star
ted a p
hase I tr
ial of a q
uadri
valen
t Shige
lla vac
cine
ca
ndidate b
ase
d on our inn
ovative G
MM
A techno
logy. Thi
s is a
unique approach
to
creating
bacterial
vaccines b
y replicatin
g
the s
urf
ace ch
arac
terist
ics of t
he bacte
ria thr
ough me
mbra
ne
vesicles.
Early science and additional col
laborations
Our p
ar
tner
ships i
n infec
tious di
sea
ses in
clude o
ur work w
ith
Cur
e
V
ac on mR
NA vac
cine
s, not on
ly aga
inst C
O
VI
D-
1
9, b
ut
als
o ﬁve add
ition
al tar
gets inc
ludin
g sea
sonal a
nd unive
rsa
l ﬂu.
Building our under
standin
g
of the micro
biome in chronic
diseases
We have develo
ped co
llabo
ratio
ns with t
wo com
panie
s to
gen
erate sc
ienti
ﬁc ins
ights a
nd turn th
em into inn
ovation in
microbiome engineering and optimisation for
new t
herapies
.
In O
ctobe
r 202
1
, we ex
pande
d a coll
abor
ation w
ith Vio
me
Li
fe Scie
nces t
hat sta
rte
d in 20
1
9, i
nvesti
gating th
e role of t
he
mic
robio
me in chr
onic di
sea
ses
. It co
mbine
s our exp
er
tise in
imm
unolo
gy with V
iome’s mR
NA ana
lysis a
nd AI p
latfo
rms to
give u
s new insi
ghts into c
hroni
c disea
ses
, ca
ncer
s and age
ing.
We aim to gen
erate dat
a on how pat
hogen
s caus
e or
exacerbate chronic diseases, including autoimmune
inﬂammatory conditions an
d immuno-oncology
.
This will
help
us bu
ild a pre
dicti
ve mode
l t
o tell us m
ore ab
out ta
rgets fo
r
the
rapi
es that bu
ild on vac
cine tec
hnolo
gy to preve
nt and even
reverse chr
onic diseases.
Wi
th Eligo B
iosc
ienc
es, we a
re focu
sing on d
evelopi
ng
ways to tre
at acne
. This me
ans us
ing Eli
go’
s CR
ISP
R and
bacteriophage t
echnology to
remov
e unw
anted
bacteria while
leaving
beneﬁcial bact
eria in
tact.
GS
K Ann
ual R
epor
t 2021
23
Strategic report
Governance and remuneration
Financial statements
Investor information
Innov
ation
co
ntinued
HIV
HI
V is an urge
nt glob
al hea
lth t
hrea
t with 1.
5 millio
n new
ca
ses ea
ch year, inc
luding 3
8
,0
0
0 new cas
es in th
e US
and 2
2,
0
00 new c
ase
s in the E
U. However, of the 3
8 mill
ion
peo
ple liv
ing wit
h HIV, 55
% of the wor
ld’s cas
es
, o
ver 20
million
people, come from su
b-Saharan Africa.
1
Our wo
rk in H
IV is th
rough V
iiV He
alth
care
, the wor
ld’s only
specialist HIV pharmaceutical compan
y
,
which w
e majo
rity
own
, with P
ﬁze
r and Sh
ionogi a
s sha
rehol
ders
. Our g
oal is to
limi
t the imp
act of H
IV on p
eopl
e
’s lives by tr
eating
, preven
ting
and u
ltimate
ly curi
ng it.
We are devel
oping l
ong-a
cting me
dici
nes that h
ave the
pote
ntial
to
dramat
ically chan
ge people
’
s
experien
ce by
giving
the
m an alter
native to d
aily me
dicin
e. W
e are a
lso wor
king o
n
lon
g-acti
ng ther
apie
s to prevent H
IV
.
Repl
acing daily me
dicines wit
h long-
actin
g
regime
ns
Our a
im is to of
fer in
novative ch
oice
s that he
lp addre
ss th
e
evolv
ing nee
ds of pe
ople li
ving wi
th HI
V
. D
espi
te incre
dibl
e
pro
gres
s made w
ith cur
rent or
al HI
V medi
cine
s, so
me peop
le
liv
ing wit
h HIV f
ace ch
allen
ges ta
kin
g pills ever
y day. We are
tra
nsfor
ming th
e lives of p
eopl
e livin
g with H
IV by re
ducin
g the
numb
er of days t
hey take tr
eatme
nt from 36
5 to 1
2 or 6 p
er
yea
r
. T
his sp
ares t
hem the d
aily re
minde
r of livi
ng with H
IV,
as we
ll as re
lievin
g the pre
ssur
e of having to t
ake med
icine
ever
y day.
In J
anuar
y 2021
, we r
ecei
ved FDA ap
proval fo
r
Cabenu
va
,
the ﬁ
rst-ever c
ompl
ete, long
-acti
ng, inj
ecta
ble re
gimen fo
r HI
V
,
of
feri
ng peop
le liv
ing with H
IV i
n the US a new a
pproa
ch to
ca
re. Stud
ies sh
ow
Cabenuv
a
dosed on
ce-monthly is
as
ef
fect
ive as th
ree-
drug o
ral re
gimens t
hat pati
ents cur
rentl
y
ta
ke every d
ay
.
We rece
ived ap
proval fo
r dosin
g once eve
ry t
wo month
s in
the U
S in ear
ly 2022.
In E
urope
, the reg
imen is a
pprove
d as the c
ombin
ation of
V
ocabria
(
c
abot
egravir
)
and Rekambys (
rilpivirine
)
, with dosing
ever
y two m
onths
.
L
aunchi
ng this i
nnovative tr
eatme
nt regi
men ha
s esta
blis
hed
Vii
V Hea
lthc
are a
s the indu
str
y lead
er in deve
loping l
ong-a
cting
HI
V
medicines.
Giving p
atient
s a t
w
o-
drug regim
en option
Inte
gra
se inhib
itors a
re the go
ld sta
ndar
d in HI
V treat
ment an
d
our m
edici
ne dolu
tegravi
r is the mo
st wide
ly pre
scri
bed in th
e
worl
d. Mo
re than 21
.3 mill
ion pe
ople li
ving wi
th HI
V – almo
st
3 in 4 of th
ose cu
rrent
ly on HI
V medi
cine – a
re now ta
king a
dolutegra
vir-based regimen. Our
two-drug regimen oral
therapies
Dovat
o
and
Juluc
a
, ba
sed on d
oluteg
ravir, have
be
en shown to b
e as well to
lerate
d and ef
fec
tive as th
ree-
drug
reg
imens
. Thi
s allows p
eople l
iving w
ith H
IV to mai
ntain v
iral
suppression while taking fe
wer
HIV drugs over
their
lifetime.
W
e ha
ve a
robust and i
ndustry-le
ad
ing clinical trial programme
that i
s driv
ing con
ﬁden
ce in t
wo-dr
ug reg
imens
. Our go
al is to
ma
ke
Dovat
o
the
most successful dolutegravir
-based regimen
be
caus
e it has few
er reac
tions to d
rugs a
nd redu
ces ex
posur
e
to anti
retrovi
rals
. We now have more t
han thre
e year
s of ef
ﬁc
acy
and s
afet
y data fo
r
Dovato
w
hich s
ets the ba
r ver
y high for
t
wo-dr
ug ora
l treatm
ent reg
imens
. Both th
e US and E
urope
an
T
reatment Guidelines in
clude
Dovato
as recommended f
or
mos
t adult p
atient
s who ar
e new to thera
py as wel
l as for st
ably
sup
pres
sed pa
tients w
ho nee
d a switch i
n their H
IV th
erapy.
Supp
ort
ing people l
iving with HI
V with a range o
f
optio
ns
No s
ingle me
dici
ne works fo
r all pe
ople li
ving wi
th HI
V
, s
o we
of
fer in
novative ch
oice
s that hel
p addre
ss the
ir evolv
ing nee
ds.
Our p
or
tfol
io of app
roved ant
iretrov
iral m
edici
nes of
fer
s a rang
e
of the
rape
utic op
tions a
nd inclu
des
T
ivic
ay
and
T
riumeq
, whi
ch
contain dolutegravir
.
In 2021
, we rece
ived Eur
opea
n marke
ting auth
oris
ation fo
r the
ﬁr
st ever di
sper
sible t
able
t formul
ation of d
oluteg
ravir in t
he form
of
Tiv
icay
, a treat
ment for c
hildr
en from f
our week
s old and ove
r
thr
ee kil
ogra
mmes li
ving w
ith HI
V in Eur
ope. We als
o made a
reg
ulator
y sub
miss
ions to bot
h the FDA and E
MA fo
r approva
l
of a new di
sper
sibl
e tabl
et form
ulatio
n of the ﬁxe
d dose
combination of abacavir
, dolutegravir and lamivudine (
T
riumeq
)
and to l
ower the min
imum wei
ght at whi
ch a chil
d can b
e
prescribed this medicin
e.
In E
urope
, we rece
ived ap
proval i
n Febr
uar
y 202
1 for
Ruko
bia
(
fos
temsavi
r
), a ﬁrs
t
-in-
clas
s HI
V att
achme
nt inhib
itor
. Thi
s
addresses an u
nmet
need f
or hea
vily
treatm
ent
-experien
ced
adul
ts with H
IV-
1 w
ho are
n
’t re
spon
ding to cur
rent a
ntiretr
ovira
l
tre
atment a
nd have exha
usted a
ll other o
ptions
. The E
urope
an
app
roval fol
lowed US a
pproval i
n 2020, whe
n it was fa
st-
tra
cked as a
n FDA bre
akt
hrough t
hera
py
.
Preventin
g HIV with lo
ng-ac
ting c
abotegravir PrE
P
Pr
eventing H
IV i
s ess
ential
. This h
as be
en rein
force
d by the
US G
overnm
ent’s goa
l to reduc
e acqui
siti
on of HI
V by 75%
by 2025.
In D
ecem
ber 2021
, th
e FDA app
roved Vii
V Hea
lthc
are’s
Apretude
, the ﬁrst and on
ly long-acti
ng injectable pre-exposure
prophylaxis (PrEP)
option t
o redu
ce the risk
of sexually
acquired
H
I
V
-1.
Stud
ies
, repor
ted i
n 2020, showed t
he once
-ever
y-t
wo-mo
nth
reg
imen wa
s supe
rior to da
ily pil
ls, wi
th ef
fecti
venes
s thre
e to
nine t
imes hi
gher (i
n men and wo
men, r
espe
ctive
ly
) than th
e oral
med
icine i
n prevent
ing HI
V acqu
isiti
on.
1
hiv
.gov/hiv-ba
sics/over
view/data-and-t
rend
s/
globa
l-statis
tics
24
GS
K Ann
ual R
epor
t 2021
Increasing our ambition for patients
Our pipeline includes a number
of medicines with new
mec
hanis
ms of ac
tion tha
t could b
e comb
ined wi
th our
integrase inhibitor
, ca
bot
egravir
, to create medicines t
o further
ex
tend the i
nter
val bet
ween d
oses
. We have two ob
jecti
ves.
One i
s to produ
ce the wo
rld’s ﬁrs
t self-a
dminis
tered l
ong-ac
ting
med
icine f
or peop
le who wa
nt to take me
dicin
e at home
. The
othe
r is to develo
p an ultr
a-long
-acti
ng regi
men, wi
th dos
ing
intervals of
three mon
ths or
longer
.
We have a 20-
year his
tor
y of succ
es
s in develo
ping inte
gras
e
inhibitors for HIV
,
including dolut
egravir and cabotegra
vir
,
through
the collaboratio
n with o
ur shareholder
Shionogi.
Thi
s year we s
igned a
n exclus
ive col
labor
ation a
nd lice
nce
agreement with
Shionogi
for a
third-generat
ion int
egrase
inhi
bitor, a pre-
clini
cal c
andid
ate call
ed VH1
48
. W
e beli
eve it
wil
l give us th
e potentia
l to of
fer medi
cine
s with lo
nger do
sing
intervals than cabotegravir
.
This could anchor our
future pipeline
of inn
ovative, l
ong-ac
ting th
erap
ies for H
IV b
eyond 2030
.
Al
so in 202
1 we ann
ounce
d a lice
nsing ag
reem
ent wit
h life
sci
ence
s com
pany Ha
lozy
me for it
s reco
mbina
nt huma
n
hyalu
ronid
ase c
alled P
H20. Wh
en PH20 i
s injec
ted
subcutaneously
,
it crea
tes
a t
emporary expansion under
the
sk
in, al
lowing i
ncre
ased vo
lumes o
f medic
ine to be de
liver
ed,
wit
hout ad
ded dis
comf
ort to t
he patie
nt. Wi
th the abi
lity to g
ive
a lar
ger do
se, we ho
pe to expa
nd the inter
va
l betwe
en dos
es.
Thi
s open
s up oppo
rtu
nitie
s to combi
ne cab
otegrav
ir with o
ther
pro
ducts i
n our pip
eline to cr
eate ult
ra-lon
g-act
ing regi
mens fo
r
tre
atment a
nd preve
ntion of H
IV
. In p
ar
ticula
r
, there’s potent
ial
for us to u
se this te
chnol
ogy to inc
reas
e the do
sing inte
rva
l of
ca
botegr
avir for pr
eventio
n from ever
y t
wo month
s to as long
as eve
ry s
ix mont
hs.
Our u
ltimate g
oal rem
ains to ﬁn
d a cure fo
r HIV. W
e are
continuing to
progres
s
our unique industry/
academic par
tnership
wit
h the Uni
versi
ty of N
or
th Caro
lina at Ch
apel H
ill thro
ugh our
joi
ntly-ow
ned Q
UR
A The
rap
eutic
s and we exp
ect to st
ar
t a
pha
se I tri
al for a cu
re medi
cine in 2022
.
Oncology
C
ancer i
s seco
nd only to h
ear
t dise
ase as t
he world
’
s
big
ges
t kille
r
. We develop t
rans
forma
tion
al can
cer
medicines
with lif
e-
chan
ging
potential f
or patients.
We have acc
elera
t
ed re
sea
rch into a
rea
s includ
ing synt
hetic
lethality and next generation immuno-oncolog
y
agents, drawing
on ou
r own expe
rt
ise in fu
nctio
nal ge
nomic
s and the s
cien
ce of
the i
mmune sys
tem, an
d that of our p
ar
tner
s.
In 2021
, we had our on
colo
gy medi
cine
Jemp
erli
(
dostarlimab
)
app
roved for p
atient
s. Thi
s mean
s we have thre
e markete
d
the
rapi
es, a fu
rth
er nine a
sse
ts in devel
opmen
t, and nu
merou
s
pre-clinical targets. This represents
rapid progress since 2
0
1
8,
whe
n we had no a
pproved m
edici
nes an
d just ei
ght as
sets in
devel
opmen
t, the mo
st adva
nced o
f them in p
hase I
.
Blood canc
ers
Mu
ltiple mye
loma i
s the thir
d most c
ommon b
lood c
anc
er
worl
dwid
e – more th
an 1
75,00
0 peo
ple devel
op it ever
y yea
r
.
Ble
nrep
(belanta
mab mafodotin
) is our treatment for patie
nts
who h
ave relap
sed or r
efra
ctor
y multi
ple myelo
ma, a
nd who
have re
ceive
d at lea
st four ot
her ther
apie
s. I
t’s the ﬁr
st ther
apy
of it
s kind
, as a hum
anise
d antib
ody dr
ug conj
ugate ta
rgetin
g
the prot
ein
B-cell maturat
ion antigen
(BCMA).
In 2020,
B
lenrep
rec
eived r
egulator
y ap
proval i
n the US
and E
urope fo
llowi
ng the pivo
tal DR
E
AM
M-2 tri
al, wh
ich
demonstrat
ed deep
and d
urable responses i
n pat
ients wit
h
adva
nced m
ultip
le myelom
a. Af
ter la
unchin
g in the US a
nd
Ge
rmany, we expa
nded to an
other s
ix EU cou
ntrie
s in 202
1
as we
ll as the U
nited K
ingd
om and Ho
ng Kong.
We are co
ntinuin
g our DR
E
AM
M trial
s to under
sta
nd the
potential for
Bl
enrep
to b
e used in e
arli
er line
s of tre
atment
,
as a m
onothe
rapy an
d in com
binatio
n with s
tand
ard and
novel th
erap
ies
, as well a
s expl
oring d
osing a
nd sch
edulin
g
modiﬁcations. For example, in the
DRE
AMM
-5 platform study
,
we are i
nvesti
gating a nove
l comb
inatio
n of trea
tments w
ith
niro
gace
stat
, a gamm
a secr
etas
e inhib
itor (GSI), an
d
isatuximab,
a CD38 target
ing mon
oclonal an
tibody
.
Gynaecol
ogic cancers
Gyn
aeco
logic c
ance
rs ar
e some of t
he most c
ommo
n canc
ers
af
fect
ing wome
n. In 2020, ne
arl
y 1
.
4 millio
n women ar
ound th
e
worl
d were di
agnos
ed with a g
ynae
colo
gic ca
ncer.
App
roval for
Jemperli
to
treat endometrial
cancer
In 2020, t
here wer
e over 40
0,00
0 new ca
ses gl
oball
y of
end
ometr
ial ca
ncer (a ca
ncer th
at begi
ns in the li
ning of th
e
uter
us
). Patie
nts have limi
ted tre
atment o
ptions i
f their c
ance
r
progresses after ﬁrst-lin
e therapy
.
In A
pril 2021
,
Jemperli
(
dostarlimab
)
, receiv
ed accelera
ted
app
roval in th
e US for c
ert
ain pa
tients w
ith dM
MR e
ndom
etria
l
ca
ncer a
nd con
dition
al app
roval in Eu
rope fo
r cer
tai
n patien
ts
wit
h dM
MR or M
SI
-H en
domet
rial c
ance
r
. It tre
ats adva
nced o
r
recurring
endomet
rial cancer t
hat
has w
orsened despit
e
previous t
reatment
with plat
inum-based chemoth
erapy
.
Jemperli
act
ivates th
e immune s
ystem to bet
ter at
tack c
ance
r cell
s.
In Au
gust 2021
,
J
emperli
rec
eived ac
cel
erated a
pproval i
n the
US fo
r patien
ts with d
MM
R soli
d tumour
s that have pr
ogre
sse
d
de
spite ea
rlie
r treatm
ent. T
his me
ans
Jemperli
is now
avai
lable
to pati
ents wi
th conﬁ
rme
d dM
MR sol
id tumou
rs and t
hose w
ho
have no s
atisf
actor
y alter
native t
reatme
nt optio
ns.
Innov
ation
co
ntinued
GS
K Ann
ual R
epor
t 2021
25
Strategic report
Governance and remuneration
Financial statements
Investor information
Innov
ation
co
ntinued
We are al
so invest
igatin
g
Jemperli
as a ﬁr
st-lin
e treatm
ent in
co
mbinati
on wit
h chemot
hera
py for pati
ents wi
th advan
ced
or re
curr
ing end
ometr
ial ca
ncer. The R
UBY pha
se II
I tri
al is
evalu
ating th
e combi
nation o
f
Zej
ula
and
Jemperli
a
s a
mai
ntenan
ce tre
atment (see b
elow
).
T
r
eat
ing ovarian c
ancer w
ith
Zejula
More than
300,000 wom
en w
ere dia
gnosed wi
th o
varian
ca
ncer i
n 2020.
Our t
reatm
ent
Zejula
(
niraparib
) is
an oral, on
ce-daily poly
(ADP-ribose)
polymerase (P
ARP) inhibit
or monot
herapy
mainte
nance treat
ment f
or w
omen wit
h advan
ced ov
arian
ca
ncer, rega
rdle
ss of it
s bioma
rker st
atus, w
ho have re
spond
ed
to plat
inum-b
ase
d chemo
thera
py
. In 2020, it r
ecei
ved app
roval
as a ﬁ
rst-li
ne mainte
nanc
e treatm
ent in th
e US and th
e EU.
We are evalu
ating
Zejula
in othe
r pivot
al tria
ls, a
sse
ssin
g activ
ity
across multiple t
umour types and exploring combina
tions of
Zejula
with oth
er ther
apeu
tics
. Our pi
votal F
IR
ST pha
se II
I tri
al
is studying
Zejula
in comb
inatio
n with
Jempe
rli
as a tr
eatme
nt
for ﬁrst
-l
ine o
varian
cancer
.
Ot
her s
olid tumours
E
xplor
ing
Zejula
for th
e trea
tmen
t of lung an
d breas
t
cancer
We are cur
rentl
y cond
ucting p
has
e II
I tria
ls with
Zejula
for lung
and breast cancer
.
Our p
has
e II
I lung c
ance
r trial
, ZE
AL
, is inves
tigat
ing
Zejula
as a ﬁ
rst-li
ne mainte
nanc
e thera
py for pati
ents wi
th advan
ced
non-small cell lung cancer (
squamous and non-squamous
his
tologi
es
), afte
r they have re
ceive
d platin
um-ba
sed
che
mother
apy. The tr
ial is st
udyin
g the ef
ﬁc
acy and s
afet
y of
Zejula
in com
binati
on with th
e stan
dard o
f care t
reatme
nt.
Our p
has
e II
I brea
st ca
ncer t
rial
, ZEST
, is exp
lori
ng the ef
ﬁc
acy
and s
afet
y of
Zejula
as a
n earl
y-st
age tre
atment
. The tr
ial us
es
cir
culati
ng tumour D
NA tec
hnolo
gy for the ﬁ
rst t
ime in a pi
votal
bre
ast c
anc
er stud
y
. This of
fer
s the po
tential to d
etect tum
our
ce
lls ear
lier at th
e mole
cular l
evel and id
entif
y wom
en at high
er
ris
k of rec
urren
ce. T
his mea
ns ther
apy wit
h
Zej
ula
coul
d star
t
whe
n the bur
den of di
sea
se is sti
ll low and m
ay create a
n
opp
or
tunit
y to more ef
fec
tivel
y slow or s
t
op th
e canc
er’s
progress.
Harnessing cell the
rap
y
Ce
ll ther
apy is an i
mpor
ta
nt avenue for t
reatin
g canc
er
. We
’re
add
res
sing thi
s with ou
r own cel
l thera
py prog
ramme f
or soli
d
tumours, which
combines st
rateg
ies across research, cl
inical
devel
opmen
t and sup
ply ch
ain to addr
ess p
atient
s
’ unm
et
needs.
Our l
ead ce
ll ther
apy as
set in d
evelopm
ent is le
t
etre
sgen
e
autoleucel (
lete-cel;
GSK33
7
7
794
), a T
-cell receptor T
-cell
the
rapy (
TCR-
T
) whi
ch har
nes
ses the i
mmune s
ystem to
devel
op a per
sona
lised t
reatm
ent. I
t does th
is by ex
trac
ting a
patient’
s
T
-cells, which are th
en genet
ically modiﬁed t
o e
xpress
a T
-cel
l rece
ptor (TC
R) that ta
rgets t
he NY
-
ESO
-
1 an
tigen
found in v
arious solid tumours.
Th
e IGN
Y
TE-ES
O phas
e II tr
ial is eva
luatin
g lete-
cel in pa
tients
with syno
vial sarcoma and m
yxoid/round
cell liposarcoma. This
is on a
n acc
elera
t
ed deve
lopm
ent path af
ter re
ceiv
ing Eur
opea
n
PR
IM
E and F
DA brea
kthr
ough st
atus.
We are al
so focus
ed on deve
lopin
g the nex
t gen
eratio
n of cel
l
therapies, which include
approaches and t
echnologies t
hat
cou
ld fur
ther e
nhan
ce anti
-ca
ncer ac
tivi
ty.
Thr
ough a c
ollab
orati
on with Lyell I
mmuno
phar
ma, we a
re
exp
lorin
g more ways to en
hanc
e T
-c
ells’ ab
ilit
y to att
ack and k
ill
tumo
ur cell
s by fur
ther e
ngine
ering c
ells th
at could b
e long
er
-
la
sting a
nd more p
otent. We are a
lso co
llabo
ratin
g with
Im
matic
s Biotec
hnolo
gies to b
uild our c
apab
iliti
es in ce
ll ther
apy
for s
olid tum
ours s
o more pat
ients c
an ben
eﬁt fr
om this k
ind of
treatment
.
Ea
rly science a
nd other co
llaborat
ions
Acr
oss ou
r R&D in on
colo
gy
, we inves
t in new tech
nolog
ies an
d
par
tn
ersh
ips to pus
h the boun
dari
es of co
mbat
ting c
ancer. One
of the m
ost im
por
tant a
rea
s is immu
no-on
colo
gy
. Addi
tiona
lly,
functional genom
ics helps us iden
tify new trea
tment targets
in
synt
hetic l
ethali
ty, an appr
oach to c
ance
r treatm
ent that t
arge
ts
onl
y geneti
c mutat
ions in c
ance
r cell
s, not he
althy c
ells
.
Con
tinuing advances in immuno
-onco
logy
Im
muno-
onco
logy is a f
ast-deve
lopi
ng area
, but t
he sea
rch for
new ta
rgets i
s impo
rt
ant, a
s so far l
ess th
an 30
% of patie
nts
respond to
cert
ain
immuno-oncology t
reatments.
Thr
ough ou
r work
, we are ai
ming to hel
p the immu
ne syste
m
recognise and kill
cancer cells more effectively
. We
’
re st
udying
how c
ombin
ations w
ith our tr
eatme
nt
Jemperli
can enhan
ce
anti
-tumour a
ctivi
ty ut
ilisin
g the CD226 a
xis
, that is ex
pres
sed
on th
e sur
face o
f T
-c
ells a
nd natura
l kil
ler cel
ls, in
cludi
ng the
che
ckp
oints C
D96
, TIG
IT a
nd PV
RI
G.
We are the o
nly com
pany wi
th acc
ess to an
tibod
ies ta
rgeti
ng
all th
ree CD2
26
axis checkpoints. GSK609
7
60
8
(
ant
i-CD
96
)
is in p
hase I d
evelop
ment as a m
onothe
rapy a
nd comb
ined w
ith
Jemperli
. In J
une 2021
, we p
art
nere
d with iT
eos T
her
apeut
ics to
fur
the
r develop a T
IG
IT a
ntibod
y
, GSK44288
59A, c
urre
ntly in a
pha
se Ib s
afet
y tria
l also in c
ombi
nation w
ith
Jemperli
.
E
xplori
ng the p
otent
ial of fun
ct
ional ge
nomic
s in
synthetic lethalit
y
Our int
ernal wo
rk on funct
ional genomics has iden
tiﬁed more
tha
n ten targ
et can
didate
s in res
earc
h for evalu
ation in t
he ﬁel
d
of sy
nthetic l
ethali
ty. Par
tner
ing wi
th IDE
A
Y
A Bi
osci
ence
s,
an oncology-f
ocused precision med
icine company
, we are
exp
lorin
g MA
T2A inh
ibiti
on in tumo
urs wi
th MT
AP de
letion
, a
co
mmon fe
ature of so
lid tumo
urs
. Our stu
dy moved to ph
ase I i
n
202
1
. T
og
ether, we are al
so develo
ping t
wo new as
sets th
at we
exp
ect to move in
to the clini
c over the nex
t few ye
ars
.
26
GS
K Ann
ual R
epor
t 2021
Innov
ation
co
ntinued
Immunology including respira
tory
Our f
ocus on t
he sci
ence o
f the im
mune sys
tem he
lps us
develop medicine
s
for immune
-mediate
d
condit
ions lik
e
lupus, rheumato
id
art
hritis and a
range of inﬂammator
y
dise
ases
. For m
ore th
an 50 ye
ars
, we have also pr
oduce
d
innova
tive me
dicin
es help
ing mill
ions of p
eople w
ith
respiratory conditions to
breathe more easi
ly.
Help
ing more lupus pa
tient
s with
B
enlysta
Benlyst
a
(belim
umab
)
is the
ﬁrst and only
biologic appr
oved
for b
oth the chr
onic au
toimmun
e dise
ase sy
stemic lu
pus
er
y
themato
sus (SL
E) and lu
pus nep
hriti
s (LN), the k
idney
inﬂ
ammat
ion ca
used by l
upus
. It is a mo
noclo
nal ant
ibody t
hat
ta
rgets B
L
yS
, an unde
rlyi
ng caus
e of SL
E and LN
, and r
educe
s
auto
antibo
dy level
s to help co
ntrol th
e dise
ase.
In 2021
, we rece
ived ap
proval fo
r
Benlysta
in adult patients
wit
h active l
upus ne
phrit
is in sever
al mar
kets inc
ludin
g Bra
zil,
EU me
mber st
ates an
d Japa
n. In 2022, we a
lso rec
eive
d
app
roval in C
hina for t
his indi
catio
n. Thi
s followe
d US app
roval
for th
is use in 2020
.
Moving towards a new way to trea
t rheumatoid
ar
thritis
As ma
ny as 1
% of peo
ple worl
dwid
e suf
fer fr
om rheu
matoid
ar
thr
itis (R
A), a ch
ronic in
ﬂam
mator
y dise
ase th
at can c
ause
pai
n, join
t swellin
g and inﬂ
amma
tion that c
an le
ad to acute a
nd
chr
onic di
sabi
lity. The n
eeds a
re gre
at, wit
h only ab
out 30
%
of RA patients
achie
ving remission
despite
use of
target
ed
therapies curren
tly a
vailabl
e, and
around 4
0% of pa
tients
reporting daily pain,
which can
be debilita
ting.
In e
arly
-stag
e tria
ls, oti
limab
, our novel mo
nocl
onal an
tibod
y
targeting
GM-
CSF
, demonstra
ted
rapid and
substant
ial
imp
rovemen
t in pain
, and ha
s now moved to ph
ase I
II s
tudie
s.
We expec
t resu
lts of thr
ee pivot
al stu
dies by th
e end of 2022.
Wi
th posi
tive pivo
tal tri
al re
sults
, otilim
ab coul
d bec
ome the
ﬁr
st new me
dicin
e for R
A in a dec
ade.
Finding new dise
ase target
s in immuno
-neurolog
y
Foc
using o
n human g
eneti
cs and t
he sci
ence of t
he immun
e
syste
m has gi
ven us uni
que ins
ights to pi
npoin
t potenti
al tar
gets
for pa
tients
with n
eurodegenerat
ive
diseases.
In J
uly 202
1
, we annou
nced a p
ar
tner
ship wi
th Ale
ctor to
devel
op two m
onocl
onal a
ntibod
ies (A
L001 and A
L
1
01
) for
neurodegenerat
ive
diseases including
front
ot
emporal demen
tia
(F
TD
)
, am
yot
rophic la
teral sclerosis
(ALS)
, P
arkinson’
s d
isease
and A
lzhe
imer’s dis
eas
e. Both a
ntibo
dies a
re des
igned to r
aise
level
s of prog
ranul
in, whi
ch reg
ulates im
mune ac
tivit
y in the
br
ain. A
L001 is in a pivo
tal ph
ase I
II tr
ial for p
eopl
e with
, or at
hig
h risk of d
evelopi
ng, F
TD d
ue to a mutati
on in the p
rogr
anulin
gen
e. It is a
lso in a p
hase I
I tri
al in pati
ents wi
th AL
S. AL
1
01
, in
devel
opmen
t for Par
kins
on’
s dise
ase a
nd Alz
heime
r’s disea
se,
is in a p
hase I
a tri
al with h
ealt
hy v
olu
nteers
.
In N
ovembe
r 202
1
, A
lecto
r announ
ced en
cour
aging new d
ata
fro
m the ope
n labe
l INF
RON
T
-2 pha
se I
I trial
. The
se data
showed
a consist
ent
slowing
of
clinical prog
ression in pa
tients
wit
h F
TD who we
re trea
ted with A
L001 comp
ared to h
istori
cal
,
match
ed F
TD su
bject
s, wi
th both gro
ups havi
ng the pr
ogran
ulin
gene mutat
ion. There was
a trend
to
wards normalisat
ion or
stabilisation of
disease-associated biomarkers. The INFRONT
-3
pha
se I
II tr
ial is cu
rren
tly enro
lling F
T
D patien
ts with a m
utatio
n
in th
e progr
anulin g
ene to co
nﬁrm t
he pha
se II d
ata
.
The partner
ship
brings t
ogether Alector’
s imm
uno-neurology
exp
er
tise an
d our R&D fo
cus on th
e scie
nce of th
e immune
syste
m and hum
an gene
tics
, as wel
l as our d
rug devel
opmen
t
capabilities.
Growing ou
r respiratory por
tfolio and tackling
eosinop
hil-
driv
en diseas
es
We have one of th
e broad
est po
rt
foli
os of res
pirato
ry m
edici
nes
in ou
r indus
try, and i
t conti
nues to grow. Sin
ce 201
2, we have
lau
nched ﬁ
ve new inh
aled th
erap
ies a
s well as a bi
ologi
c,
Nucala
(
mepolizumab
), t
he ﬁrst
-in-class monoclonal
antibody
that t
arget
s interl
euki
n-5 (I
L
-5). W
e have be
en lead
ing re
sear
ch
into eo
sino
phil-
drive
n disea
ses l
ike ast
hma for mo
re than 25
yea
rs. T
hes
e are inﬂ
ammato
ry c
ondit
ions a
ssoc
iated wi
th
eleva
t
ed leve
ls of eo
sinop
hils, a t
ype o
f white bl
ood ce
ll,
and c
an oc
cur in a ra
nge of ti
ssue
s and or
gans
.
Our t
rial
s have studi
ed how
Nucala
co
uld cha
nge the li
ves
of pe
ople af
fec
ted by con
ditio
ns such a
s severe e
osin
ophili
c
asthma (
SE
A)
, h
ypereosinophilic syndrome (
HES
), eosinophil
ic
granulomat
osis with
polyangitis
(E
GP
A)
and chronic
rhi
nosin
usiti
s with na
sal p
olyp
s (
CR
wNP). By t
arge
ting I
L
-5,
Nucala
red
uce
s the numb
er of eos
inoph
ils, w
hich
, in exce
ssive
numb
ers
, can c
ause i
nﬂam
matio
n. The
se tri
als have le
d to
impor
tant
new appro
vals f
or
Nucala
, addressing unmet needs
for a br
oad gro
up of pati
ents
.
In 2021
, the FDA app
roved
Nucala
for a
dults w
ith CR
SwNP
, a
common, chronic cond
ition which
can cause difﬁcult
y
breathing
and s
leep
ing, an
d inter
fere w
ith ta
ste and s
mell. W
ith thi
s
approval,
N
ucala
is now i
ndic
ated in the U
S for four e
osino
phil-
dri
ven dis
eas
es. I
n Novemb
er 202
1
, we rece
ived ap
proval
s for
Nucala
in Eu
rope for C
RSw
NP
, HE
S and EGPA
.
In J
anuar
y 2022, we r
ecei
ved FDA app
roval to ex
tend th
e
marketing
authorisation for
Nucala
to incl
ude a sp
eciﬁ
c
paediatric presenta
tion in
a pre-ﬁlled saf
ety syringe, enabl
ing
healthcare professionals or
caregivers to
administ
er
Nucala
at
hom
e to appro
priate p
atients
. We are als
o awaitin
g Europ
ean
approval
for t
his ind
ication.
GS
K Ann
ual R
epor
t 2021
27
Strategic report
Governance and remuneration
Financial statements
Investor information
Innov
ation
co
ntinued
Nucala
is al
so in a ph
ase I
II tr
ial to dete
rmine w
hethe
r it ca
n help
pati
ents wi
th CO
PD wit
h high eo
sinop
hil cou
nts, a
bout 40
% of
CO
PD pat
ients
, who ar
e at incr
eas
ed ris
k of exace
rbati
ons.
Additionally
, we are f
ocused on de
veloping
depemokimab, a
long-acting anti-int
erleukin-
5
(IL
-5)
monoclonal antibody
. A
cur
rent ph
ase I
II p
rogr
amme is a
sse
ssi
ng its s
afety a
nd ef
ﬁca
cy
in seve
re as
thma wi
th an eos
inoph
illic ph
enot
ype. S
o far, resul
ts
show i
t can r
educ
e and sup
pres
s eosi
nophi
l levels for l
onger
per
iods t
han othe
r anti-
IL
-5 mono
clon
al antib
odie
s. Th
is would
me
an trea
tment c
ould be ex
tend
ed to one in
jecti
on ever
y six
months
.
Ea
rly-pha
se por
tfolio
In 2021
, we star
ted a ph
ase I
b tria
l for an exi
sting I
L
-
1
8
mon
oclon
al anti
body fo
r atopic de
rmati
tis and a p
hase I t
rial
for a nove
l monoc
lona
l antibo
dy ta
rgetin
g IL
-
7 for mul
tiple
scl
eros
is. B
oth of the
se were i
nforme
d by our ac
ces
s to geneti
c
dat
abas
es that i
denti
ﬁed th
e indic
ation
s with the h
ighe
st
probability of success
.
We also c
omple
ted a world
wide l
icen
ce agre
emen
t with
Arrowhead Pharmaceutic
als
for GSK
4532990 (ARO-H
SD
)
,
a genetically
validat
ed, in
vestigat
ional RNA int
er
f
erence (RNAi)
the
rape
utic cur
rentl
y in pha
se I/
II d
evelopm
ent for pa
tients w
ith
non-alcoholic steat
ohepatitis
(NASH).
The agreement cov
ers
the medicine
’
s
dev
elopment and
commercialisation out
side of
greater China.
Our p
has
e I pipeli
ne als
o consi
sts of ot
her mol
ecule
s targ
eting
the i
mmune sys
tem for c
eliac di
sea
se, os
teoar
thr
itis pa
in and
neuro-degenerative
disease.
Oppor
tunity driv
en
Alo
ngsid
e our bal
ance
d por
tf
olio ac
ross key the
rapy
are
as, we a
re also le
d by the sc
ienc
e to purs
ue oth
er
oppor
tunities
.
T
rans
forming th
e treat
ment of anae
mia
Over 7
00 mill
ion people suffer from
chronic kidney
disease
worl
dwid
e, and a
n estim
ated one i
n seven of th
em suf
fer
s from
ana
emia
. Ma
ny have limite
d treatm
ent opti
ons today.
Dap
rodu
stat ha
s potenti
al as a n
ovel oral t
reatm
ent in dia
lysi
s
and n
on-di
alys
is set
tings
. If ap
proved d
aprod
ustat c
ould b
ring
ea
se of us
e as an or
al tre
atment w
ith pote
ntial to im
prove on th
e
cur
rent in
jecti
on-b
ased s
tand
ard of c
are an
d work to ef
fec
tively
manage haemoglobin le
vels.
Dap
rodu
stat is b
ased o
n comp
ellin
g human g
enetic
s and N
obel
Prize-winni
ng scien
ce tha
t demo
nstrat
ed h
ow
cells sen
se and
ada
pt to oxyg
en availa
bilit
y
. It i
s alrea
dy app
roved in Ja
pan un
der
the na
me
Duvroq
. In 2021
, d
ata re
ad out po
sitive
ly fro
m ﬁve
pha
se I
II stu
dies
. Ea
ch inde
pende
ntly me
t their pr
imar
y ef
ﬁc
acy
and s
afet
y endpo
ints
, demon
strati
ng that da
produ
stat i
mproved
or maintained pat
ients within
their target haemoglobin
ranges
and a
lso sh
owed, in th
e prim
ar
y safet
y anal
ysis of t
he intenti
on-
to-tre
at popu
lation
, simil
ar rate
s of majo
r card
iovas
cular eve
nts
when compared t
o t
he inj
ection-based standard
of care, ES
A
the
rapy, withi
n each tr
ial. D
ata fro
m the ASC
END p
rogra
mme
wil
l be use
d to suppo
rt re
gulator
y ﬁl
ings wi
th hea
lth auth
oriti
es
worldwide.
Innovating fo
r patien
ts wit
h primar
y biliar
y
cholangitis
We are al
so develo
ping lin
erix
ibat, a
n ilea
l bile ac
id tra
nspor
ter
(IBA
T) inhibit
or
,
for the
treatment
of cholestatic pruritus
in
patient
s with
primary biliary cholangitis
(PBC
),
a condit
ion
in wh
ich the
re is a si
gniﬁ
cant un
met nee
d with no n
ew
pharmacologic therapy since the
1
960s
.
Following da
ta from
the G
LI
MM
ER pha
se I
Ib tri
al, in 2021 we init
iated the G
LI
STEN
pha
se I
II tr
ial. T
he GL
IM
ME
R study wa
s the ﬁr
st tim
e 23and
Me
hel
ped us to id
entif
y, recr
uit and e
nrol pat
ients w
ho had op
t
ed
to par
tic
ipate in r
esea
rch. T
he GL
IST
EN pha
se I
II st
udy wil
l also
use t
he 23and
Me d
ataba
se to hel
p match pati
ents
. It is al
so our
ﬁr
st US pi
votal tr
ial tha
t allows a
sse
ssm
ent of pa
rti
cipan
ts at
hom
e by using te
chnol
ogy wi
th a home
-bas
ed app to tr
ack
progress.
Fol
lowing t
he FDA Or
phan D
rug De
signa
tion, i
n 202
1 lineri
xiba
t
als
o rec
eived a po
siti
ve deci
sion on O
rpha
n Dru
g Desi
gnatio
n
from the
European Commission.
28
GS
K Ann
ual R
epor
t 2021
Pi
pel
ine ove
r
view
We have 64 as
sets in d
evelop
ment, o
f which 22 a
re late-s
tage
.
Innov
ation
co
ntinued
Phase III/R
egistration
Bexsero
infants (US
) vaccine
Xev
udy
1
(
s
ot
ro
v
im
ab
/VIR-
78
3
1
) CO
VID
-
1
9
CO
VID-
1
9 (
Med
ica
go
)
1
vaccine
3
Blenrep

(anti-
BCM
A AD
C
) multi
ple myel
oma
CO
VID-
1
9 (
Sanoﬁ
)
1
v
accine
3
Jemperli
1
(PD-
1 antagonist
)
1
L endometrial
cancer
2
COV
ID
-
1
9 (
SK B
iosc
ienc
e
)
1
v
accine
3
letetresgene-aut
oleucel
1
(NY
-ES
O-
1 TC
R) SS/
MRC
LS
2,6
Me
nAB
CW
Y (
1
st gen) vacc
ine
Zejul
a
1
(PARP i
nhibito
r
) ovaria
n, lung a
nd bre
ast c
ance
r
Menv
eo
liquid vaccine
4
52
7223
1
(AL0
0
1
, anti-s
ortilin) frontotemporal de
mentia
2,7
M
MR (US) vac
cine
depemokimab
1
(LA anti-I
L5
antago
nist
) asthma
Rotari
x
liq
uid (US) vacc
ine
Nucala
COPD
RSV ma
ternal
1,
†
vaccine
otilimab
1
(
aGM
-CS
F
inhibitor
)
rheumatoid
ar
thritis
RSV older adults
1
vaccine
daprodustat
(HIF-
PHI) anaem
ia of
chronic
kidney d
isease
gepotidacin
1
(BT
I inhib
itor
) uU
TI and G
C
linerixibat (
IBA
Ti
) cholestatic
pruritus in
primary biliar
y
cholangitis
Phase II
Malaria (
fract
ional d
ose
)
1
vaccine
bepirovirsen
1
(HBV AS
O
) HBV
S. aureus
1
vaccine
4
3036656
1
(leucyl t
-RNA inhibitor
) tuberculosis
Shigella
1
vaccine
364
0254 (maturati
on inhi
bitor) HI
V
Therapeutic HBV
1
vaccine
4
3
8
1010
9
1
(broadly n
eutralising an
tibody
)
HIV
Me
nAB
CW
Y (
2nd gen) vac
cine
4
cobolimab
1
(T
IM-3 antagonist)
NSCLC
V
aricella new strain v
accine
Pha
se I
C. difﬁcile
1
vaccine
37
454
1
7 (
STING agonist
) cancer
Klebsiella pneumoniae
1
vaccine
3
84
50
97
1
(NY
-ES
O-
1
/
TGFb
R2 TCR T
) ca
ncer
SA
M (
COVI
D-
1
9 m
odel) vac
cine
3
9
019
61
1
(NY
-ES
O-
1
/CD
8a TCR T
) canc
er
SA
M (
rabi
es mo
del) vac
cine
4
0
74
3
8
6
1
(L
A
G3 an
tagonist
) cancer
CM
V
vaccine
4
36
2676
1
(Mat2A inhibitor
)
cancer
BVL
-GSK098
1
(
eth
ionamide boost
er
) t
uberculosis
4
428
85
9
1
(E
OS-448
,
TIGI
T an
tagonist
) cancer
V
I
R-24
82
1
(
neutralisin
g monoclonal
anti
body
)
inﬂuenza
8
60
9
7
608 (CD
96 ant
agoni
st) canc
er
255
6286
1
(Mtb inhibit
or
) t
uberculosis
4
52
7226
1
(AL
1
0
1
, anti-sortilin
)
neurodegenerat
ive diseases
3
1
86899
1
(
CRK-
1
2
inhibitor
) viscer
al
leishmaniasis
5
3
85
8279
1
(
anti-CCL
1
7) ost
eoarthritis pain
3
49
424
5

(proteasome inh
)
visceral leishmaniasis
39
1
5393
1
(
T
G2 inhi
bitor) celi
ac dise
ase
3
8
8
2
3
47
1
(Fi
mH ant
agonis
t) uUT
I
1
0
7
0806 (anti-
IL
1
8
) at
opic derm
atitis
39238
68 (PI
4kβ in
hibitor) vir
al CO
PD exa
cerb
ations
3888
1
30
1
(
anti-IL7 )
multiple
sclerosis
418
2
13
7
1
(VIR-
7
83
2
) CO
VID-
1
9
4
4532
990
1
(ARO
-HSD siRNA) non-alcoholic steat
ohepatitis
37
399
3
7 (
matur
ation i
nhibito
r
) HI
V
2
7
9
8
74
5
1
(TR
PV
4
block
er
) d
iabetic
macular
edema
ca
botegr
avir (
400 m
g/ml form
ulatio
n
) HI
V
388
4464
1
hear
t failure
40042
80 (
capsid prot
ein inhibit
or
)
HIV
Onl
y the mos
t advan
ced in
dicat
ions ar
e shown fo
r each a
sse
t.
1
In-licen
ce or othe
r alli
ance rel
ation
ship
with thi
rd pa
r
ty.
2
Addition
al indications a
lso under inves
tigation
3
GSK co
ntr
ibutin
g pand
emic adjuv
ant
4
In pha
se I
/II t
ria
l
5
Transition activ
i
ties unde
rway to en
able
fu
r
ther pr
ogr
essio
n by pa
rt
ner
6
In pot
entia
lly re
gis
tra
tiona
l pha
se II t
ria
l
7
Ph
ase II
I tri
al in p
atient
s with pro
gr
anulin
gene mutatio
n
8
GS
K ha
s exc
lusive o
ption to c
o-
deve
lop
po
st pha
se II
†
En
rolment a
nd vacc
ination s
topp
ed in
Febr
ua
r
y 2022. F
ur
the
r ana
lysi
s to bet
ter
und
ers
tand s
afet
y dat
a fro
m these t
ri
al
s
is o
ngo
i
ng
NS
CL
C: non
-sm
all ce
ll lung c
ance
r; uU
TI:
unco
mplicate
d urin
ar
y t
rac
t infec
tion
;
GC
: gonor
rh
ea; S
S: sy
nov
ial s
ar
coma
;
MRC
LS: myxoid
/round cell l
iposa
rcoma
GS
K Ann
ual R
epor
t 2021
29
Strategic report
Governance and remuneration
Financial statements
Investor information
Pharmaceuticals
Our pe
rform
ance
Ph
armac
euti
cals tu
rnover i
n the year wa
s £1
7
,
7
29 milli
on,
up 4% AE
R, 1
0% C
ER
.
Sa
les of
Xev
ud
y
(
so
trovi
mab
)
, t
he monoclo
nal ant
ibody
tre
atment fo
r COVI
D
-
1
9 o
f £958 m
illion c
ontri
buted
approximat
ely 6
percentage point
s t
o Pharmaceuticals growth.
By D
ecem
ber 2021
, le
ss tha
n a year s
ince th
e ﬁrs
t pivota
l
pha
se I
II dat
a, s
otrovim
ab was b
eing us
ed to tre
at COVI
D-
1
9
pati
ents
. W
e had so
ld or re
ser
ved over 1
.7 millio
n dose
s
thro
ugh agr
eeme
nts with t
he EU and over a d
ozen othe
r
cou
ntrie
s inclu
ding th
e US, U
K, J
apan
, Austr
alia
, Ca
nada
,
Singapore and
U
AE.
HI
V sa
les wer
e down 2% A
ER but up 3
% CER
, to £
4,
77
7
mill
ion, w
ith grow
th in
D
ovato
an
d
Juluca
p
ar
tly of
fset by
Ti
vic
ay
and
T
riumeq
. Our b
road p
ort
foli
o inclu
des new p
roduc
ts
Cabenuva
, our lo
ng-act
ing inj
ecta
ble tre
atment
,
Apretude
,
our l
ong-ac
ting in
ject
able fo
r HIV p
reventi
on, and
R
ukobia
,
for h
ighly t
reatment
experienced pa
tients.
We maint
ained o
ur lea
d posi
tion in re
spir
ator
y
, amid h
igher
demand during
the pandem
ic and st
rong commercial e
xecution.
Res
pirato
ry s
ale
s were up 21
% A
ER
, 28% CER
, to £2,
863
mill
ion, w
ith sa
les of
Tr
e
l
e
g
y
a
nd
Nucala
each exceeding
£1 billio
n per ye
ar for the ﬁ
rst ti
me. Ap
proval
s and lau
nches
for mo
re eos
inoph
il-dr
iven di
sea
se indi
catio
ns for
Nucala
, a
nd
inc
rea
sed upt
ake of the th
erapy
’
s home a
dminis
trati
on optio
ns,
also boost
ed performance.
T
relegy Ellipta
, now i
n 48 mar
kets,
fur
the
r incre
ase
d its ma
rket sha
re in chr
onic ob
stru
ctive
pulm
onar
y dis
eas
e, and m
ade gai
ns in as
thma
, aide
d by
app
roval in J
apan i
n late 2020.
See Group ﬁnancial review on page 62 for more detail
Oncology continued to
show
strong double-digit sales growth.
Sa
les of
Zejula
were £
395 m
illion
, up 1
7% AE
R, 22
% CER
,
imp
acted by on
going l
ower diag
nosis r
ates due to th
e
COVID
-
1
9 pand
emic, particularly in
the US.
Blenrep
was
app
roved an
d launch
ed in the U
S and Eu
rope in Q
3 2020,
with ongoing launches throughout
Europe in 20
2
1
.
Blenrep
sales globall
y t
otalled
£89 milli
on.
Im
muno-
inﬂa
mmatio
n sale
s of £8
85 mi
llion gr
ew 22% AER
,
29% C
ER wit
h
Benlysta
s
ale
s up 22% AER
, 29% C
ER to
£
8
7
4 mil
lion, b
eneﬁ
ting fr
om lupu
s nephr
itis la
unche
s in US an
d
Jap
an in H2 2020.
Sales of Established Pharmaceutic
als
decreased 1
1
% AER,
6% C
ER to £7
,
75
7 m
illion
.
Adapt
ing to the COVI
D
-
1
9 pandemi
c
Th
e COVI
D-
1
9 pa
ndemi
c conti
nued to af
fec
t heal
thca
re
syste
ms glob
ally. It ha
s see
n the inter
rupti
on of usu
al car
e
in ma
ny heal
thca
re faci
litie
s, and a d
elay in di
agnos
is and
subsequent
treatment
s. Patien
ts with
pre-existin
g medical
conditions remain
particularly vulnerable.
Am
idst th
e ongoi
ng res
trict
ions on a
cce
ss to custo
mers we
co
ntinue
d t
o per
fo
rm stro
ngly ac
ross m
arkets i
n area
s like
onc
olog
y
. W
e used o
nline a
nd digi
tal tool
s to maint
ain str
ong
engagement with healthcare prof
essionals and continued t
o
mee
t the nee
ds of our p
atients t
hroug
h patien
t suppo
rt
programmes.
Per
f
or
ma
nce
Stro
ng ﬁnan
c
ial per
fo
rm
a
nc
e i
n 2
0
2
1 wa
s driven b
y ﬁr
s
t cla
ss
co
m
merc
ial executi
o
n a
nd strong u
ptake of new p
rod
ucts.
Pharma
ceutic
als highlight
s
–
T
o
tal 2021 turnover £1
7
.7 billi
on, +4% AER
, +
1
0% C
ER
–
Sales of new
and specialty pharmaceuticals £1
0 billion
+
20% A
ER, +26% CER
–
Sa
les of
Xev
ud
y
£958 million reﬂecting the ongoing
ful
ﬁlme
nt of cont
ract
s acros
s the wor
ld and mo
st
sig
niﬁc
antl
y in the US
–
Strong commercial ex
ecution of
key
growth products,
including
Tr
e
l
e
g
y
and
Nuc
ala
, whic
h excee
ded £1 billi
on
in s
ales fo
r the ﬁr
st time
–
Bet
ter dig
ital c
apa
biliti
es to supp
or
t more ef
fec
tive
engagement with healthcare prof
essionals
,
higher
productivity and a mo
re efﬁcient supply chain
Read more below
V
accines highlight
s
–
T
o
tal 2021 turnover £
6.8 b
illio
n, -3% A
ER
, +
2
% CER
–
COV
ID
-
1
9 pand
emic s
ales fo
r V
acci
nes £
44
7 milli
on
inc
luding p
ande
mic adj
uvant s
ales of £
44
4 milli
on
–
Shingles:
Shingrix
sold in 1
7 countries, including nine
markets launched during 202
1
–
Me
ningi
tis: incr
ease
d marke
t shar
e in the US fo
r
Bexsero
and
Me
nveo
–
Maintained marke
t share
for k
ey
products
despite
signiﬁcant disruption
from COVID-
1
9
–
Excellent supply performance; our
Shingrix
supply is fully
unconstrained
–
Acc
eler
ated our di
gita
l trans
form
ation, h
elpin
g to drive
data-driven
decisions in
manufacturing
and supply
Read more on page 31
3
0
GS
K Ann
ual R
epor
t 2021
Drivin
g gro
w
th over the nex
t decad
e
Our p
or
tfol
io of pha
rmac
eutic
als is m
ade up of i
nnovative a
nd
es
tabli
shed m
edici
nes an
d we have lead
ing glob
al pos
itio
ns in
re
spira
t
or
y dis
eas
e and HI
V
. W
e are deve
lopin
g our pre
senc
e
in oth
er spe
cial
ty the
rapy ar
eas
, inclu
ding on
colo
gy and
immuno-inﬂa
mmation. Our broad
por
tfolio supplies innovativ
e
and h
igh-q
ualit
y med
icine
s, ma
king a p
osit
ive impa
ct on the
live
s of milli
ons of pat
ients
. Over t
he nex
t ﬁve yea
rs we exp
ect
spe
cial
ty me
dicin
es to be a key dr
iver of GS
K’s grow
th
.
Thi
s will b
e compl
emente
d by our new
ly deﬁ
ned Ge
nera
l
Me
dicin
es bus
ines
s whic
h cont
ains al
l of our pr
imar
y ca
re
brands, including
Tr
e
l
e
g
y
,
Anoro
and o
ur cla
ssic a
nd
established products which
will support our broa
der in
vestment
in in
novation a
nd R&D.
Our H
IV b
usine
ss is a
lso po
sitio
ned for gr
owt
h as we rem
ain
inn
ovation le
ader
s. We antic
ipate co
ntinue
d grow
th in our
lon
g-acti
ng inje
ctab
le ther
apie
s, wi
th
Cabenuva
for the
tre
atment o
f HIV a
nd
Apretude
for H
IV p
reventio
n. Loo
king
beyon
d 2026, we have mult
iple op
por
tuniti
es to sus
tain g
row
th
wit
h our late-
stag
e ass
ets and we’re exci
ted abo
ut our ea
rly-
stage pipeline of further innova
tive long-acting
medicines.
Streng
thening our capabilit
ies and organisation
W
e w
ant t
he best
and brig
ht
est people
in ou
r specialty
med
icine
s mar
keting an
d medic
al tea
ms. I
n 202
1
, a c
ontinu
ed
foc
us on app
ointin
g the rig
ht lead
ers le
d to us nami
ng new
gen
eral m
anage
rs in 1
2 more c
ountri
es (64 in all s
ince 201
7).
We
’re att
racti
ng top ex
terna
l peopl
e with th
e right e
xper
tis
e to
compete. In oncology alone,
we hired
more than
300 people
(
109 in com
merc
ial, 20
8 in R&D) in 2021
, 1
1
7 of th
em into
leadership positions. Leadership changes are
improvin
g the
interface between commercial and
R&D functions, where
early
co
mmerc
ial inp
ut to sele
ct and d
evelop pi
pelin
e ass
ets ca
n
create
lasting valu
e.
Optimised policies
and collaboration
between market
ing,
med
ical a
nd sa
les tea
ms have mad
e our sal
es for
ce mor
e
ef
fect
ive and c
ompet
itive ac
ross key m
arkets
. Cha
nges to
our s
ales i
ncen
tives p
olicy ma
de a pos
itive im
pact in o
ur sal
es
teams, with
higher
engagement
and personal
accountability
.
Inte
rnal a
udits s
how we achi
eved this w
ithou
t compr
omisi
ng
our et
hical standards i
n engagem
ents wit
h healthcare
pro
fess
ional
s (HCP
s
). In Ja
nuar
y 202
1
, we introd
uced i
ndivi
dual
ta
rgets fo
r more of o
ur sal
es rep
rese
ntative
s to drive
comp
etitiveness
.
We have used d
ata and p
redi
ctive an
aly
tic
s to delive
r engagi
ng
customer int
eractions, and monit
or and
improve
sales
per
f
ormance and mark
et share.
T
rans
forming interac
tions wit
h health
care
professionals and pat
ients
It
’
s es
senti
al for us to ma
inta
in a stro
ng conn
ectio
n with H
CPs
,
so we c
an mee
t their ne
eds
, and tho
se of thei
r patie
nts. A
s with
many b
usine
sse
s, the p
ande
mic ha
s acce
lerate
d how we use
technology
to
make
ourselves more effective
commercially
.
We
’ve inc
rea
sed our u
se of vir
tu
al cal
ls to keep HC
Ps inf
orme
d
about clinical data, launches and products in our pipeline. This
hel
ps them u
nder
stan
d the sci
ence b
ehind o
ur prod
ucts
, and
how be
st to use t
hem.
In 2020, we r
an suc
ces
sfu
l pilots o
n how bes
t to engag
e
wit
h HCP
s in a coo
rdinate
d way acros
s onlin
e and tr
aditio
nal
cha
nnels
. In 2021
, we s
cal
ed this up
, with up to 1
5 bra
nds in
23 mar
kets now us
ing a dat
a-led
, automati
call
y orch
estr
ated
mix o
f tradi
tiona
l and dig
ital p
romoti
on. In 2022, w
e
’ll dep
loy
and r
eﬁne t
his fur
the
r
. U
sing nove
l data se
ts in our c
ommer
cial
ana
ly
tics a
nd orch
estr
ation e
ngine wi
ll let us t
ailor w
hat we
del
iver
, plu
s how and wh
en, to ea
ch HC
P
. O
ur glob
al, d
ata-
driven
cust
omer e
xperience pr
ogramme has
been recogn
ised
ex
terna
lly, winnin
g three s
ilver awa
rds in th
e Intern
ationa
l
Cus
tomer E
xp
erie
nce Awar
ds 202
1
, a
nd help
s us imp
rove
co
mpetit
ivene
ss. I
n the EU, di
gita
l investm
ent ha
s led to an
immediate 1
1
8% increa
se in
HCPs attending webinars. And in
Chi
na, we’re re
achin
g ten time
s more H
CPs th
rough WeCh
at
than through our
website alone.
As we
ll as vir
tua
l meeti
ngs and e
duc
ationa
l activ
itie
s, we’ve
brought clinical experience to cust
omers through our global
spe
aker
s’ progr
amme
. This fo
llows fee
dback f
rom HC
Ps
, who
told u
s they like to re
ceive i
nform
ation in a p
eer-to-pe
er set
ting
from expert practitioners.
W
e cont
inue t
o
engage wit
h pat
ients t
hrough
patien
t support
programmes.
Benlyst
a
Care
s is our U
S progr
amme w
ith
information and guidance, including
text reminders
,
help with
ben
eﬁts a
nd savi
ngs, nu
rse s
uppor
t and e
xclusi
ve conte
nt to
help pa
tients
taking
Benlyst
a
ge
t the
most from their
treatment.
By S
eptembe
r 202
1
, we’d enrol
led over 1
50% m
ore pat
ients
tha
n we had by the s
ame tim
e in 2020.
Benlys
ta
Car
es has
be
en shown to h
elp mor
e patie
nts stic
k with th
e treatm
ent. I
n
202
1
, the US Pat
ient En
gagem
ent Lia
ison (P
EL) tea
m ran 262
pati
ent edu
catio
n progr
amme
s with ove
r 300,
000 p
atients
acr
oss al
l dise
ase
s. Th
e PEL pa
rt
nered w
ith our n
ationa
l and
loc
al pati
ent ad
vocacy g
roups (PAGs) t
o give p
atient
s more
dis
eas
e awarene
ss an
d reso
urce
s so they c
an have pro
ducti
ve
conversations
with care pro
viders.
Chi
na Yinc
huan C
OPD p
atient s
uppo
rt pr
ogra
mme is C
hina’
s
ﬁrst digital COPD pat
ient mana
gement
programme enabled
by
big d
ata
, 5G and th
e interne
t of thing
s (Io
T). We’ve worked w
ith
the Nation
al Healthcare Commission (NHC)
to
embed smart
digital technology
in inhalers that
helps doctors mak
e sure
patients follow their pr
escriptio
ns.
Per
for
mance
conti
nued
GS
K Ann
ual R
epor
t 2021
31
Strategic report
Governance and remuneration
Financial statements
Investor information
Investi
ng in our supply cha
in
Our s
upply c
hain tr
ansf
ormati
on con
tinue
s in line wi
th our
por
t
folio’s shif
t to inn
ovative spe
cial
ty c
are pro
duct
s. New ways
of wor
king i
n resp
onse to th
e pande
mic, a
nd agile r
esou
rce
all
ocati
on to prio
riti
se retur
n on inves
tment
, helpe
d us make
mor
e saving
s. Th
is sets G
SK up to be l
eane
r
, more pr
oduc
tive
and more ﬁnancially efﬁ
cient.
Investing in fa
cilities, people and manufacturing par
tnerships
wil
l conti
nue to help u
s launc
h spec
ialt
y medi
cines r
apid
ly and
acc
eler
ate deli
ver
y acros
s our po
rt
folio
. The new f
acilit
y at our
Ba
rnar
d Cast
le (UK
) site w
ill sta
rt m
anuf
acturi
ng medi
cine
s in
the ﬁ
rst qu
ar
ter of 2022. Ove
r the co
ming yea
rs, i
t will su
ppor
t
man
ufact
uring of t
he majo
rit
y of the key exi
sting a
nd new
bio
phar
maceu
tica
l ass
ets in ou
r pipel
ine. Si
nce 201
9, we h
a
ve
inves
ted £8
8.
4 millio
n in the exp
ansi
on of our nex
t ge
nerati
on
biopharma manufacturin
g facility in
Upper Merion, Penn
sylvania,
whi
ch is se
t t
o ope
n in 2022. Our e
xpand
ed fac
ilit
y in Rock
vil
le,
Mar
yland, will
begin commercial
supply in
20
23.
A str
eamli
ned sup
ply ch
ain hel
ps us co
ntrol c
osts a
nd allo
cate
ca
pita
l more ef
fec
tivel
y
, with a bi
gger s
hare now d
irecte
d to
spe
cial
ty me
dicin
es. We have si
mpliﬁ
ed our n
etwor
k and ce
ntral
fun
ction
s, com
pleti
ng the dive
stme
nt of the si
te in Pozna
ń,
Pola
nd and th
e clos
ure of Xoch
imilc
o, Mexi
co. Ou
r comm
ercia
l
and s
upply c
hain te
ams ar
e colla
borat
ing on ini
tiati
ves to lower
co
st of goo
ds sol
d (
COG
S
), protec
t margi
n and inc
rea
se pro
ﬁt.
Thi
s work in
clude
s redu
cing ac
tive pha
rmac
eutic
al ing
redie
nt
co
sts, o
ptimis
ing ca
pacit
y, improv
ing pro
ces
ses an
d work
ing
wit
h suppl
iers
. By si
mplif
yin
g our por
t
folio, we’ve a
lso re
duced
the b
rands w
e sell fr
om over 450 to 24
7 in four ye
ars
, and S
KUs
b
y
15
%
.
Inve
sting i
n automati
on and A
I/
ML is i
mprovi
ng ef
ﬁci
ency by
red
ucing va
riab
ilit
y in our su
pply ch
ain, a
s demo
nstra
ted by us
bei
ng on tra
ck to reac
h top-q
uar
tile d
a
ys in inve
ntor
y outst
andi
ng
(D
IO
), whi
ch fre
es up work
ing c
apit
al. We expe
ct mor
e digit
al
inves
tment
s in the nex
t thr
ee year
s to help u
s improve p
lannin
g
pro
ducti
vit
y and ac
curac
y
, and red
uce ou
r inventor
y
.
Keeping su
pply consistent and dependable
Our success rests on maintaini
ng a
high-quality and reliable
sup
ply of pr
oduct
s for pati
ents an
d consu
mers
. W
e red
uced
tota
l cost
s in the sup
ply ch
ain as we c
ontinu
e to incre
ase
pro
ducti
vit
y and si
mplif
y our s
upply n
etwor
k. C
ost r
educt
ions
toget
her wi
th sale
s grow
th have im
proved th
e gros
s proﬁ
t
mar
gin by 1
.2%
.
We stren
gthen
ed our inte
rnal a
nd ex
ternal q
ualit
y over
sight
model and modernised
our qual
ity management s
ystem, which
wil
l simpl
ify w
a
ys of wor
kin
g. W
e have imp
roved dev
iation r
ates,
and o
ur phar
mace
utic
al supp
ly cha
in has c
ontinu
ed to be in
our i
ndustr
y’s top qu
ar
tile for F
DA reca
lls per £1 bil
lion of s
ale
s.
All 70 re
gulator
y ins
pec
tions of P
harm
aceu
tica
ls site
s were
s
at
i
sf
a
ct
or
y.
Be
caus
e our saf
ety pe
rfo
rman
ce is cr
itic
al to our su
cce
ss we’ve
ta
ken ext
ra mea
sure
s to make se
riou
s incid
ents le
ss likel
y and
strengthen ou
r safety cul
ture. These incl
ude deplo
ying Life
Savi
ng Rule
s to help al
l employe
es und
erst
and an
d apply
ba
sic sa
fety r
ules to th
eir work
, lau
nching a
n oper
ation
al safet
y
leadership programme and strengthening
our safety monit
oring
sys
tems
.
Reli
abili
ty of o
ur supp
ly has i
mproved f
rom a me
dian
per
fo
rmanc
e of 95% o
n-time, i
n-full in 201
8 to 9
7% in 2021
.
This was despit
e COVID-
1
9 d
isruption. As
well as
applying
supply chain
segmentation,
we
’ve
also impro
ved performance
by inves
ting in te
chnol
ogy like Re
sili
nc, a tool u
sing A
I to
highlight
emerging su
pply chain
risks, and pilot
ing digital
twins
to opt
imise planning and increase operational efﬁ
ciency
.
We
’ve ac
cele
rated our d
ata
, digit
al and a
naly
tic
s (DDA)
ado
ption an
d use of e
nterpr
ise sys
tems for ma
nagin
g data an
d
documents and plann
ing operations. They
include value
chain
mapping for
supply ch
ain planning,
and cognitiv
e supply
chain
models t
o low
er logist
ics costs.
Va
c
ci
n
es
Our pe
rform
ance
V
acc
ines 2021 turn
over was £
6,
77
8 milli
on in the ye
ar
, down
3% A
ER
, but up 2% C
ER
. As anti
cipate
d, our Vacci
nes
bus
ines
s face
d signi
ﬁc
ant disr
uptio
n durin
g 202
1
, gi
ven
governmen
ts’
prioritisation
of COVID-
1
9 v
accination
pro
gram
mes an
d meas
ures to c
onta
in the pa
ndemi
c. Thi
s
resulted in low
er demand for
routine adult
vaccination, including
Shingrix
an
d hepat
itis vac
cine
s. V
acc
ines tu
rnover exc
ludin
g
pan
demic a
djuva
nt sal
es dec
rea
sed 9% A
ER
, 5% CER to
£6,
33
1 million.
Shingrix
de
cre
ased 13% AER
, 9% C
ER to £1
,72
1 millio
n.
Sa
les fel
l in the US a
nd Inter
nation
al. Sa
les gr
ew in Euro
pe,
dri
ven by Ge
rmany a
nd launc
hes in t
he UK
, Spa
in and I
taly.
Shingrix
wa
s sold i
n 1
7 c
ountr
ies
, inclu
ding nin
e market
s
launched during 202
1.
He
patiti
s vaccin
es sa
les wer
e down 20
% AER
, 1
6
% CER to
£460 million, adv
ersely impacted
by
the de-prioritisation
of
routine US adult
vaccination, increased hepatitis B vaccine
co
mpetit
ion and u
nfavoura
ble C
DC stoc
kpil
e movemen
ts in the
US
, and by C
O
VI
D-
1
9
-re
lated trave
l restr
icti
ons in Eu
rope an
d
Internation
al.
Me
ningi
tis sal
es de
crea
sed 7% A
ER
, 2% CE
R t
o £9
6
1 millio
n
driven primarily
by
unrepeated
Internat
ional t
ender v
olumes for
othe
r menin
gitis vac
cine
s.
Bexse
ro
sa
les wer
e stab
le at AER
,
but g
rew 5% CE
R t
o £6
50 milli
on, re
ﬂect
ing incr
eas
ed mar
ket
sha
re in the U
S.
Me
nveo
sa
les wer
e up 3% AE
R, 9
% CER to
£272 millio
n, pri
maril
y drive
n by 2020 cohor
t c
atch-up
vac
cinati
ons and 2021 highe
r dema
nd, as w
ell as in
crea
sed
mar
ket sha
re in the U
S.
See Group ﬁnancial review on page 64 for more detail
Per
for
mance
conti
nued
32
GS
K Ann
ual R
epor
t 2021
Adapt
ing to the C
OVID
-
1
9 pandemic
Th
e pande
mic co
ntinue
d to domina
t
e 202
1 as hi
ghly
tra
nsmis
sibl
e vari
ants eme
rged a
nd cou
ntrie
s aroun
d the worl
d
cycl
ed in and o
ut of st
a
y-at-ho
me ord
ers
. Coun
trie
s with ac
ces
s
to COV
ID
-
1
9 vacci
nes mad
e them avai
lable to th
eir adu
lt
pop
ulatio
ns and th
en child
ren. H
eal
thcar
e system
s had to ada
pt
signiﬁcantly to
enable th
is huge
vaccinat
ion endea
vour
, which had
repercussions across many
aspects of health
provision,
including
a lower p
rior
ity o
n vacci
nes for di
sea
ses oth
er than C
OVI
D-
1
9.
Th
e pande
mic als
o mea
nt we did not a
lways have as m
uch
acc
es
s t
o cus
tomer
s as usu
al. De
spite t
his, we m
ainta
ined ou
r
mar
ket sha
re for key vac
cines i
n strate
gic cou
ntrie
s. We held
vir
tua
l meeti
ngs wit
h HCP
s and at
tended o
ther event
s vir
tuall
y to
provide edu
cational support and ma
terial about
vaccinat
ion. W
e
continued t
o inform
people about the
import
ance of
immunisation
through disease awareness and branded campaigns for
men
ingiti
s, shi
ngles
, and di
phthe
ria
, tetanu
s and pe
rtu
ssis (DT
P).
Drivin
g gro
w
th over the nex
t decad
e
Our p
or
tfol
io of mar
keted vac
cines i
s the bro
ades
t in the
ind
ustr
y
. It in
clude
s more t
han 20 vac
cine
s, help
ing to prote
ct
people worldwide from a
range of
diseases throughout their
live
s, inc
ludin
g menin
gitis
, shing
les
, ﬂu, pol
io, mea
sle
s and ma
ny
mor
e – and 90
% of our va
ccine
s by sal
es have an e
fﬁ
cacy l
evel
of ab
ove 90%
.
In c
omme
rcial te
rms
, vacci
nes tend to h
a
ve a lon
ger life
cycle
tha
n medic
ines a
nd can g
ener
ate signi
ﬁca
nt revenu
es over
decades
.
For example
En
gerix
, our vacc
ine to hel
p prevent
hep
atitis B v
irus i
nfecti
on, ha
s been ava
ilab
le for mor
e than
30 ye
ars an
d will re
main a
n impor
ta
nt par
t of ou
r por
tfo
lio.
In N
ovembe
r 202
1 the CD
C’s Advis
or
y Com
mitte
e on
Im
muniz
ation P
racti
ces vote
d unani
mousl
y to reco
mmend
hep
atitis B va
ccin
ation for a
ll adul
ts aged 1
9 to 59 year
s.
V
acc
ines i
s expec
ted to be on
e of the lar
gest d
river
s of grow
th
for G
SK
, with hi
gh sing
le-d
igit pe
rcen
tage s
ales g
row
th
(CA
GR) a
ntici
pated over th
e 202
1
-2026 per
iod. We aim to
dou
ble reven
ues of
Shingri
x
, our shi
ngle
s vaccin
e, in that
ﬁve
-year p
erio
d, and to do
uble bo
th menin
gitis a
nd ﬂu vac
cine
sa
les in th
e nex
t dec
ade, he
lping to pr
otect mi
llions o
f peopl
e
from these d
iseases
.
By 2026, we p
lan to lau
nch seve
ral new vac
cine
s, in
cludin
g
our p
rogra
mme to hel
p prevent R
SV throu
gh the vac
cinati
on of
older adults, a
signiﬁcant medical and commercial oppor
tu
nity.
We will su
ppor
t the
se goa
ls by drawi
ng on our s
trong
man
ufact
uring c
apab
ilit
y and sc
ale, a
s well a
s our glo
bal
reach and commercial
execution.
An
other ar
ea of foc
us has b
een at
trac
ting an
d retai
ning the
rig
ht peop
le in str
ategic a
rea
s and fur
the
r stre
ngthen
ing our
ca
pabil
itie
s, inc
luding m
RN
A which i
s now the foc
us of
app
roxim
ately 250 of ou
r peop
le.
Digit
al capabilitie
s
We conti
nue to build o
ur cap
abili
ties th
rough Vacc
ine Vir
tua
l
Days
, brin
ging HC
Ps toge
ther
, bri
nging u
s close
r to our
customers and sharing
scientiﬁc discourse from the w
orld’
s
leading experts in vaccines
.
Through our ne
w eCongres
s
plat
for
m, we ex
tende
d the sec
ond edi
tion of t
his event to H
CPs
fro
m more th
an 1
5
0 count
ries
, incl
uding C
hina
, and of
fere
d
translations
in eight
different languages. This a
ttracted o
ver
1
1,00
0 regis
trant
s, and w
e rece
ived a Ne
t Prom
oter Sco
re
(HC
P feed
back sc
ore) that was a
bove the in
dustr
y st
anda
rd.
Th
e event played a r
ole in he
lping to i
mprove an
d protec
t public
health ev
ery
where.
We also c
ontinu
e to work wit
h Phili
ps on its P
regn
ancy+ and
Ba
by
+ app
s. Our p
ar
tner
ship wi
th Phil
ips is li
ve in 1
2 c
ountri
es,
reaching appro
ximat
ely 30 mi
llion parent
s and cont
inues t
o be
an ef
fec
tive tool f
or educ
ating p
arent
s about t
he vacc
ines in
our p
aediat
ric po
rt
folio
. Follow
ing this s
ucc
ess
, we launc
hed
a digi
tal p
art
ners
hip in th
e four
th quar
ter of 2021 focu
sed on
adul
ts. T
his tim
e the par
tne
rshi
p is with S
an Fra
ncis
co-b
ased
Nex
tdoo
r
, a neigh
bourh
ood net
work u
sed by al
most o
ne in
three households in
the US.
Global momentum behind vaccination
COVID
-
1
9 vaccinat
ion programmes requi
red countries and
pop
ulatio
ns to adapt a
nd lea
rn – and we b
elieve th
is will h
a
ve
a positive
long-
term impa
ct on v
accinations
more widely
,
par
ti
cular
ly for adu
lts. At
titu
des to vac
cinati
on have shi
fted a
s
well – o
ur res
earc
h among p
eopl
e aged 50 ye
ars a
nd olde
r
in ei
ght of our l
arge
st vacc
ine mar
kets in 2021 showed a
n
inc
rea
se in pos
itive at
titu
des to vac
cinati
on as a re
sult of
the pandem
ic.
Per
for
mance
conti
nued
GS
K Ann
ual R
epor
t 2021
33
Strategic report
Governance and remuneration
Financial statements
Investor information
Per
for
mance
conti
nued
Th
ere is a re
al opp
or
tunit
y for he
althc
are sys
tems to har
nes
s
this m
oment
um bec
ause th
e need fo
r vacci
nation r
emain
s
str
ong. I
n the US
, we comm
issi
oned an
d publi
shed a r
epor
t
wit
h A
vale
re He
alth wh
ich sh
owed that ad
oles
cents a
nd adul
ts
may have mi
sse
d more tha
n 3
7 milli
on dos
es of re
comm
ended
vac
cines b
etwe
en Jan
uar
y 2020 and Ju
ly 202
1
, c
ompa
red to
201
9. Th
ese ﬁ
ndings d
emons
trate how r
outine i
mmuni
satio
n in
202
1 con
tinued to l
ag below p
re-p
ande
mic level
s. Th
e origi
nal
Avale
re repo
rt wa
s foll
owed by the C
DC’s own an
alysi
s of
mis
sed vac
cine d
oses
, and c
alls f
rom gover
nment
, publi
c polic
y
gro
ups and t
he medi
a to prior
itis
e the rec
over
y of vacc
inatio
n
rate
s for dis
ease
s other t
han COV
ID
-
1
9.
Supply performance
We conti
nue to stre
ngthe
n our manu
factu
ring c
apab
ilit
y to
make s
ure we sup
por
t the gr
owth o
f our vacc
ines p
or
tfoli
o.
De
spite th
e suppl
y chain d
isru
ptions c
ause
d by the pan
demi
c,
in 2021 we had ano
ther ver
y str
ong yea
r for supp
ly
per
f
ormance.
We are pro
ud of the f
act that a
ll our str
ategic va
ccin
es site
s
are a
pprove
d by multip
le regu
lator
y agen
cies i
ncludi
ng the
FDA
. In 2021
, our net
work of 1
2 manu
factur
ing site
s, in ni
ne
cou
ntrie
s, pr
oduc
ed and de
livere
d 7
67 millio
n dose
s.
Thr
ougho
ut the yea
r we conti
nued to inve
st in thi
s netwo
rk
,
modernising and automating our ﬁlling and
packaging activitie
s,
building our mRNA production c
apabilities and adding launch
ca
pacit
y for pi
pelin
e produ
cts su
ch as RSV. W
e are al
so
inves
ting in th
e infr
astr
uctur
e neede
d for the f
uture wi
th a
pla
nned l
y
oph
ilisa
tion (freeze d
ry
ing) un
it at our si
te in W
avre
,
Belgium, which will suppor
t our manufacturing capacit
y
for
priorit
y
products and our inno
vation
pipeline.
We have worked a
cros
s our sup
ply cha
in to redu
ce our
end
-t
o-
end lea
d time
s, imp
rove our agi
lity i
n the mar
ketplac
e
and more e
ffectively manage demand
uncertaint
y
. This close
co
oper
ation, f
rom the s
hop ﬂo
or to deli
very to t
he end-
customer
, allows us
to
make
better
-informed
decisions by
sha
ring d
ata
, t
o fre
e up ca
sh thro
ugh incr
eas
ed ef
ﬁci
ency a
nd
to be mo
re com
petiti
ve in tende
rs wi
th our cus
tomer
s.
By redesigning o
ur supply
chains, we
are reducing
lead times
and m
aki
ng sure we h
a
ve the r
ight inven
tory at t
he righ
t plac
e t
o
win i
n the mar
ketpla
ce. Th
is is pa
rt of a m
ulti-ye
ar ef
for
t to use
our wo
rkin
g capi
tal mo
re ef
fect
ively.
We conti
nue to appl
y a co-
develop
ment mo
del wh
ere co
lleag
ues
in R&D and manufacturing
work hand-in-hand to
scale up
production as effectively
and efﬁciently as possible. An ongoing
exa
mple is h
ow we are pr
epari
ng for an a
ccel
erated l
aunch o
f our
RSV c
andid
ate with i
nvestme
nt in Wa
vre i
n both cli
nica
l and
commercial activities.
We have made gr
eat str
ide
s in unloc
kin
g capa
cit
y and get
ting
the m
ost fro
m our exi
sting a
sset
s. A goo
d examp
le of thi
s is our
shingles vaccine,
Shingrix
, wh
ere we have im
proved yi
eld an
d
throughput across the
supply chain. R
eductions in lead
times
als
o mean we a
re now fu
lly unc
onstr
ained o
n
Shingrix
supply
,
whi
ch will s
uppo
rt ou
r grow
th asp
irati
ons.
We have also m
et our C
O
VI
D-
1
9 c
ommit
ments
, sca
ling our
pandemic adjuv
ant production
to
respond t
o ﬂuctua
ting
dem
and. T
his agi
lity m
eant we d
eliver
ed on our a
djuva
nt
agr
eemen
ts, an
d pande
mic ad
juvant s
ales m
ade an i
mpor
tan
t
co
ntribu
tion to our r
evenue. (F
or mor
e about o
ur COV
ID
-
1
9
sol
ution
s, see p
age 21
.)
At the s
ame tim
e, we’ve con
tinued to a
ccel
erate ou
r digit
al
transformation, including inv
estment in a manufacturing
exec
ution sy
stem. M
ore tha
n 50 pro
ducti
on line
s at ten site
s are
swi
tching fr
om pap
er batch r
ecor
ding to ele
ctro
nic. T
he system
wil
l be depl
oyed over the n
ext t
hree ye
ars
, with be
neﬁt
s
including
operational efﬁciency
, lead-
time redu
ction, and
improvements
in compliance, yield and
stability.
Thi
s invest
ment, a
long w
ith many oth
ers
, will ac
cel
erate
data-driven
decisions in
manufacturing
and supply
. E
xamples
of dat
a anal
yti
cs an
d techno
logy im
proveme
nts inc
lude ro
botic
automa
tion of
our ma
terial h
andling a
ctivity,
‘bots
’ t
o replace
repetitive
manual tasks, and aut
omat
ing the
visual inspection
of sy
ringe
s and vi
als usi
ng AI
/M
L.
W
e are
also
embedding
Lean Six
Sigma t
ools
and t
echniq
ues
into ou
r proc
ess
es, sy
stems an
d capa
bilit
ies to imp
rove our
ways of wor
kin
g.
Th
e investm
ents we’re mak
ing in o
ur manu
factur
ing fac
ilitie
s and
peo
ple wi
ll help us i
n many ways
, for exam
ple ens
uring t
hat we
have the r
ight mR
NA c
apab
iliti
es and t
alent i
n plac
e. T
og
ether,
the
se inves
tments w
ill hel
p make our m
anufa
cturi
ng read
y to
support a bright futu
re in
V
accines.
3
4
GS
K Ann
ual R
epor
t 2021
T
r
ust is one of o
ur three l
ong-
t
er
m p
rio
ri
t
ies. The mor
e tr
ust we
bu
il
d, th
e bett
er we per
f
o
rm and t
he m
o
re val
ue w
e crea
t
e f
o
r
s
ha
re
h
o
l
ders, our peopl
e a
nd soc
i
ety
.
Tr
u
s
t
Our T
rus
t prio
rit
y cover
s our work a
cros
s ESG fac
tors
, and it
’
s
integ
ral to our ove
rall s
trateg
y
. Our ap
proac
h to ESG help
s us
deliver su
stainable performance and long-t
erm gro
wth, as well
as building t
rust with our
stakeholders (
see Stak
eholder
eng
ageme
nt on pag
e 44
). It al
so redu
ces r
isk to our o
perat
ions
(
see R
isk m
anage
ment on p
age 46) and hel
ps us ma
ke a
positive
social impact.
We have 1
3 c
ommit
ments in t
he ESG ar
eas w
here we c
an
make t
he biggest difference. The commitmen
ts help
us respond
to cha
lleng
es and o
ppor
tuni
ties in o
ur indus
tr
y and bro
ader
soc
iet
y (
see E
x
ternal e
nviron
ment on p
ages 1
3 to 1
6). They a
lso
co
ntribu
te to many of the U
N Sust
aina
ble Deve
lopme
nt Goa
ls,
es
peci
ally G
oal 3: to ensur
e heal
thy live
s and pro
mote wellb
eing
for a
ll, at all a
ges
.
gsk.com:
Our c
ontr
ibu
tion t
o the S
DGs
E
xtern
al benchmark
ing
We have maint
aine
d our ack
nowl
edged l
eade
rshi
p in ESG
, and thi
s conti
nues to be a key d
river i
n our goa
l to delive
r heal
th
imp
act and s
hare
holde
r retur
ns. De
tail
ed below i
s how we per
for
m in key ESG r
atings t
hat we are fr
eque
ntly as
ked abo
ut
by inves
tors
.
–
Dow Jo
nes Sus
tai
nabil
ity I
ndex (DJ
SI):
1s
t
i
n
pharmaceutical industr
y
group for
20
2
1
–
S&P Global Sust
ainability Award:
Gol
d Cla
ss 2022
–
Acce
ss to Me
dicin
e Index (
A
TM
I):
Ra
nked 1
st in A
TM
I in
202
1
, and an i
ndustr
y le
ader i
n the 202
1 Anti
micro
bial
Resistance Benchmark
–
FTSE
4Good:
Me
mber of F
T
SE4Go
od Ind
ex sinc
e 2004
–
CDP:
A- in Cli
mate Chan
ge, B in Water, B in Fore
sts
(p
alm oil a
nd timb
er
) and S
uppli
er Enga
gemen
t Lead
er
–
Susta
inalyt
ics:
Low ris
k rating
–
MSCI:
A
A ratin
g
–
Vig
eo Eir
is:
Ranked 2
nd in
the pharmaceuticals sector
E
SG g
overn
anc
e
Our Board-le
vel Corporat
e Respon
sibility Committee (
C
RC
)
over
sees o
ur prog
res
s again
st our co
mmitm
ents an
d how we’
re
add
res
sing the v
iews an
d expec
tatio
ns of our st
akeho
lder
s.
The GL
T and senior managemen
t are responsible
for del
ivery
of our T
rus
t comm
itmen
ts and re
por
t regu
larl
y to the CRC o
n
pro
gres
s (
see pa
ge 1
04
).
Our app
roach to rep
ort
ing
In th
is sec
tion, w
e repor
t hi
ghligh
ts of our 2021 progr
ess
aga
inst e
ach of our 13 T
ru
st com
mitme
nts. We provi
de mor
e
det
aile
d repor
tin
g and dat
a on eac
h commi
tment i
n our ESG
Per
for
manc
e Repor
t
. This re
por
t als
o inclu
des our U
N Glo
bal
Compact Communication on Progress, Global Reporting
Initiativ
e inde
x, Sustainabil
ity Accounting
Standards
Board index
and a
ssu
ranc
e statem
ents for o
ur soci
al and e
nviron
menta
l
data
.
gsk.com:
ESG
Performance Report
GS
K Ann
ual R
epor
t 2021
35
Strategic report
Governance and remuneration
Financial statements
Investor information
Using our science and technology to address health needs
Commitment
Pro
gres
s in 20
21
New m
edic
al innovat
ions
Deve
lop dif
fer
entiate
d,
high-qual
ity and need
ed
medicines, vaccines and
consumer healthcare products
to impro
ve
health
–
202
1 saw th
ree ma
jor app
rovals fo
r medic
ines
, eight p
has
e II
I star
ts a
nd have 64 vac
cine
s
and m
edici
nes in o
ur pipe
line. F
or more d
etail
s, se
e the Inn
ovation s
ectio
n on page
s 1
7 to 28.
Globa
l
health
Improve global
health impact
through R&D for
infectious
dis
eas
es that af
fec
t child
ren
and youn
g people in
low-
income countries, focusing on
HI
V
, mala
ria and T
B
–
Our c
ommi
tment to im
prove glo
bal he
alth im
pact th
rough R&
D for infe
ctio
us dise
ase
s and
acc
es
s t
o med
icine
s and vac
cine
s has be
en rec
ogni
sed in th
e Acce
ss to M
edici
nes In
dex
(A
TM
I) whe
re we have ra
nked numb
er one fo
r the las
t seven ye
ars
, ever
y year si
nce its
inception.
–
Our R
TS
,S/AS01
e ma
laria v
accin
e is the ﬁr
st an
d only vac
cine sh
own in lo
ng-term c
linic
al
tri
als to red
uce ma
lari
a in chil
dren. I
n 202
1
, the WHO r
eco
mmend
ed broa
der de
ployme
nt of
the va
ccine
, to reduc
e illne
ss an
d deaths i
n child
ren in su
b-Sa
hara
n Afri
ca and o
ther re
gions
wit
h moder
ate to high ma
lari
a tran
smis
sion
. This fo
llowed new d
ata whi
ch showe
d that the
vaccine, in
combination
with seasonal ant
imalarials, lowers cl
inical episodes of
malaria,
hos
pita
l admis
sion
s with s
evere mal
aria a
nd deat
hs by arou
nd 7
0% c
ompa
red to ant
imala
rial
s
alo
ne. In D
ece
mber 2021
, G
avi ann
ounce
d its de
cisio
n to provid
e fundi
ng for the
procurement and int
roduction of t
he vaccine
into
routine chi
ld immunisation
programmes
in G
a
vi el
igibl
e countr
ies
.
–
W
e made
good progress in
improving
av
ailability of
age-appropriat
e HIV treatment
options
for
chi
ldren a
round th
e world
. A gener
ic dol
utegrav
ir disp
ersi
ble ta
blet wa
s made avai
lable i
n key
sub
-Sah
aran A
fric
an cou
ntrie
s, le
ss tha
n a year af
ter US F
DA approva
l of this tr
eatme
nt. Th
is
work w
as faci
litate
d by our publ
ic-p
rivate pa
rt
ners
hip wit
h the Clin
t
on H
ealth A
cce
ss Ini
tiati
ve,
Uni
taid a
nd two g
eneri
c manu
factur
ers: My
lan (now par
t of V
iatri
s group) and M
acleo
ds.
–
Shigella is the
second biggest cause of morbidity and mortality from diarrhoea worldwide
af
ter rotav
irus
, and no a
pproved va
ccin
e is wid
ely avail
able. I
n late 202
1
, the ﬁr
st sub
jects
were vaccinat
ed with our
quadrivalent shigella vaccine candidate,
in a ﬁrst
-time-in-human,
cli
nica
l phas
e I/I
I stu
dy
. Our g
oal is to deve
lop an af
for
dable v
accin
e givin
g broad p
rotect
ion
against the
most pre
valent
shigella serotypes.
–
We have the ri
ches
t pipel
ine focu
sed on g
lobal h
ealt
h prior
ity d
isea
ses i
n the indu
str
y
,
inc
luding te
n medic
ines a
nd vacc
ines cu
rren
tly in cli
nica
l develop
ment
.
–
We launc
hed a co
llabo
ratio
n with Nova
rt
is in 202
1
, Proj
ect Af
rica G
radi
ent, to su
ppor
t
scientiﬁc research on
the
link be
tween genet
ic div
ersity and pat
ients
’ response
to
malaria and
tuberculosis d
rugs in t
hree African regions.
Health
sec
ur
ity
He
lp the worl
d to bet
t
er
prepare for
future
disease
outbreaks wit
h pandemic
poten
tial, and
tackle
antimicrobial
resistance
–
We have taken a b
road ap
proac
h to develop
ing COV
ID
-
1
9 solu
tions
. T
o se
e how we have
app
lied ou
r scie
nce to ﬁnd
ing COV
ID
-
1
9 innovati
ons, s
ee pag
e 2
1
.
–
We were one o
f ﬁve com
pani
es to sit on t
he Pand
emic P
repa
redne
ss Pa
rtn
ersh
ip Steer
ing
Gr
oup, conve
ned by the U
K Gover
nment i
n 202
1
, b
ringi
ng togeth
er indu
str
y
, intern
ationa
l
org
anis
ations a
nd expe
rt
s to advis
e G
7 gover
nments o
n how to spe
ed up the r
espo
nse to a
futu
re pan
demic
. The T
rini
ty Ch
allen
ge, of wh
ich we wer
e a foundi
ng memb
er
, also
ann
ounce
d the win
ners o
f its ina
ugura
l comp
etitio
n to ﬁnd inn
ovative ways to bet
ter pr
edict
and p
revent ou
tbrea
ks of dis
eas
e, usi
ng data a
nd anal
yti
cs
. Winne
rs inc
lude
d the
V
accineLedger
,
which tracks
vaccines from
manufacture
to
patient,
using block
chain
technology
.
–
Our c
ommi
tment to pr
eventing a
ntimi
crobi
al res
ista
nce (A
MR) w
as rec
ogni
sed by the A
cce
ss
to Me
dicin
e Found
ation’s AM
R Benc
hmar
k, wi
th GSK a
n indus
tr
y leade
r for the th
ird
co
nsecu
tive tim
e in 202
1
. T
he ben
chmar
k high
lighted i
n par
ticul
ar the di
vers
ity a
nd depth o
f
our R&D pipeline, particularly our AM
R
-relevant
vaccines.
T
rust
c
ontinued
For full details of our progress against these commitments, please see our ES
G P
erformance Report
36
GS
K Ann
ual R
epor
t 2021
Mak
ing our produc
ts af
ford
able and available
Commitment
Pro
gres
s in 20
21
Pricing
Im
prove the he
alth o
f millio
ns of
peo
ple ea
ch year by m
aki
ng
our products available at
responsible prices that
are
sustainable for our business
–
In d
evelope
d marke
ts, pr
icing o
f all our new p
rodu
cts reﬂ
ects t
he value t
hey deli
ver to patie
nts,
he
althc
are sys
tems and w
ider s
ocie
ty co
mpare
d to availab
le alte
rnative
s, an
d suppo
rt
s our
work to m
eet futu
re hea
lthc
are ne
eds. We of
fer pat
ient su
ppor
t and
, in the US d
uring 2021
,
prov
ided p
resc
ribe
d vacci
nes and m
edic
ines to mo
re than 87
,0
00 low
-inco
me unin
sured
,
und
erins
ured
, and Me
dica
re Par
t D pati
ents th
rough GS
K and V
iiV H
ealth
car
e
’s Patient
Assistance Programs Foundation.
–
For p
rici
ng in low in
come c
ountri
es (L
ICs) and lowe
r middl
e incom
e count
ries (
LM
ICs) we
use i
nnovative p
rici
ng stru
cture
s to exte
nd prod
uct re
ach. O
ur vacci
nes bu
sine
ss ha
s a tiere
d
pri
cing mo
del ba
sed o
n W
orld B
ank gro
ss nati
onal in
come c
ountr
y cl
ass
iﬁc
ations
, and we do
not ﬁ
le patents f
or our me
dicin
es or enf
orce hi
stori
c patents i
n low-inc
ome c
ountri
es LI
Cs
.
Product reach
Use a
cce
ss str
ategie
s to reach
800 million un
derser
ved
people in low
er income
countries with our products
by 2025
–
Our a
cce
ss str
ategie
s conti
nued to re
ach ma
n
y mor
e under
ser
ved p
eople i
n lower inc
ome
cou
ntrie
s. We made g
ood pro
gres
s agai
nst our t
arge
t in 202
1
, a
nd have now re
ache
d over
323 milli
on peo
ple wi
th our pro
ducts u
sing ac
ces
s str
ategies
. The
se str
ategie
s inclu
de our
adva
nced m
arket c
ommit
ments to pr
ovide o
ur vacci
nes to lowe
r incom
e count
ries t
hrough
Gavi
. Our pa
rt
ners
hip wit
h Gavi inc
lude
s suppl
ying
Cer
var
ix
, a cri
tica
l tool in lowe
r inco
me
cou
ntrie
s for add
res
sing ce
rv
ica
l canc
er
,
Syn
ﬂorix
, our pn
eumoc
occ
al vacc
ine, a
nd
Rotarix
our va
ccine a
gains
t rotavi
rus
, the mos
t comm
on cau
se of sever
e diar
rhoe
al dise
ase i
n child
ren
under ﬁve.
–
In 2021
, we also ma
de a com
mitme
nt to suppl
y
Rotarix
through
the
Humanitarian
mechanism
for civil
society organisations
ser
ving
the
vaccination
needs of
refugee and
other
emergency
sit
uation
s. Thi
s build
s on our exi
sting c
ommi
tment to the H
uman
itar
ian M
echan
ism for
Synﬂor
ix
.
–
Vii
V Hea
lthc
are ha
s volunt
ar
y lice
nsing ag
reem
ents wi
th gene
ric ma
nufac
turer
s. Th
ese have
all
owed at lea
st 21
.
3 milli
on peo
ple liv
ing wit
h HIV a
cros
s 1
1
9 LI
Cs and L
MI
Cs acc
es
s t
o a
gen
eric p
roduc
t cont
aining d
oluteg
ravir by th
e end of 2021
.
–
We have donate
d over ten bill
ion alb
enda
zole t
able
ts, inc
ludin
g 5
26.4 mi
llion i
n 202
1
, to
sup
por
t ef
for
ts to end ly
mphati
c ﬁlar
ias
is and c
ontrol i
ntesti
nal worm
s in sch
ool-ag
e child
ren.
Healthcare access
Par
tne
r to improve d
isea
se
preven
tion, a
wareness and
access t
o
healt
hcare
services
for 1
2 millio
n peop
le by 2025
–
We have a numbe
r of par
tne
rshi
ps with N
GOs an
d multil
ateral o
rgan
isati
ons to impr
ove
dis
eas
e preventi
on, awar
enes
s and ac
ces
s to hea
lthca
re ser
vi
ces
. By 202
1
, thes
e
pro
gram
mes re
ache
d 1
3
.9 milli
on peo
ple. O
ver the nex
t yea
r we’
re devel
oping a
n ambit
ious
glo
bal he
alth st
rategy fo
r GSK w
hich wi
ll incl
ude set
ting a n
ew targ
et.
–
Our partnership with
Sav
e the
Children
increased its
emergency
preparedness and respon
se
ca
pabil
ity, inves
ting in da
ta ana
lyt
ics an
d earl
y-act
ion pro
tocols to p
rovide e
fﬁ
cien
t and time
ly
he
althc
are in c
rise
s. Ou
r par
tner
ship
s with Save th
e Chil
dren, A
mref H
eal
th Afric
a and CA
RE
Inte
rnati
onal have tr
aine
d more th
an 1
0
8,0
00 fr
ont-line he
alth wo
rkers s
ince 201
1. They
re
ached ove
r 1
7
.3 m
illion p
eopl
e with pr
eventio
n and tre
atment fo
r infec
tious d
isea
ses
, plus
providing
mat
ernal/
child h
ealthcare, vaccination,
hy
giene sanitat
ion and
nutrition.
–
Vii
V Hea
lthc
are’s Posit
ive Acti
on prog
ramm
e aims to exp
lore ways to s
uppor
t pe
ople
-cen
tred
and c
ommun
ity
-led in
t
er
venti
ons to hel
p meet the U
N tar
gets to end A
ID
S by 2030. I
n 202
1
,
the p
rogra
mme re
ache
d approx
imately 27
4
,00
0 peop
le and fu
nded 66 g
rants a
cros
s 28
countri
es.
T
rust
c
ontinued
For full details of our progress against these commitments, please see our ES
G P
erformance Report
GS
K Ann
ual R
epor
t 2021
37
Strategic report
Governance and remuneration
Financial statements
Investor information
T
rust
c
ontinued
Being a modern emplo
yer
Commitment
Pro
gres
s in 20
21
Engaged people
Ach
ieve and ma
intai
n a
co
mpetit
ive empl
oyee
eng
ageme
nt sco
re by 2022
–
In e
arly 2022
, we launch
ed a new al
l-co
mpany su
rvey fo
cuse
d on pur
pose
, strateg
y
,
eng
ageme
nt and cu
lture pr
ogre
ss. E
ngage
ment re
mains h
igh at 78% an
d above the g
ener
al
ind
ustr
y ben
chmar
k, s
ettli
ng back to 201
9 l
evels af
ter an ex
tra b
oost d
uring t
he ear
ly pha
ses
of the
pandemic.
Inclusion and diversity
Accelerate ou
r progress on
inclusion
and div
ersity,
including aspirational targets
for fe
male a
nd ethni
call
y
diverse representation
in senior
rol
es by the e
nd of 2025, and
recognition as a
disability
co
nﬁde
nt empl
oyer and in
LGBT
+ indices
–
Ou
r aspi
ratio
n is that wom
en hold at l
eas
t 45% of V
P and SVP r
oles by th
e end of 2025. I
n
202
1
, women h
eld 40
% of role
s at VP an
d above, up f
rom 38
% in 2020. Th
e FT
SE Women
Le
ader
s rank
ing sh
owed that we ar
e in the top 10% of F
TS
E 1
0
0 comp
anie
s base
d on the
proportion of women
on our
Board and i
n leadership positions
1
. We also pu
blish
ed our ﬁ
fth
ann
ual UK ‘g
ender p
ay gap’ rep
ort i
n 202
1
, w
hich s
howed that we c
ontinu
e to outpe
rfo
rm the
national
av
erage.
–
Ou
r aspi
ratio
n is to have at lea
st 30
% ethni
call
y diver
se lea
ders i
n our rol
es at VP a
nd above in
the U
S and at le
ast 1
8% in th
e UK
, by the en
d of 2025. Our r
epre
sent
ation a
s at 3
1 Dec
ember
202
1 showe
d that we had 1
2.9
% ethnic
ally d
iver
se lead
ers i
n VP and a
bove role
s in the U
K, u
p
fro
m 1
1
.
1
% in 2020. In t
he US, w
e had 27
.
1
% ethni
call
y diver
se lea
ders i
n role
s at VP and
above
, up fro
m 2
3.
2% in 2020. T
his pro
gres
s is sup
por
ted by our r
igoro
us focu
s on equa
l
employment opportunity.
W
e ha
ve
launched programmes such as Accelerating
Dif
ference –
Ethn
ic Dive
rsit
y
, whi
ch supp
or
ts the deve
lopme
nt of ethni
call
y diver
se emp
loyees
, buil
ding on
their strengths and addressing dev
elopment gaps through individual and group
coaching. From
2023 we wil
l publis
h GSK
’s ‘
ethni
cit
y pay gap’ dat
a for the U
K.
–
We have develo
ped a th
ree-ye
ar pla
n to incre
ase o
ur dis
abili
ty co
nﬁde
nce. A
s par
t of this w
e
hav
e rolled out
our w
orkplace adjustments programme t
o our biggest mark
ets, making it
avail
able to over 4
0% of our e
mploye
e popul
ation so f
ar
. W
e als
o signe
d up to the In
ternati
onal
L
abour O
rgan
izati
on’
s Glob
al Bu
sines
s and D
isab
ilit
y Net
work
, to prom
ote the incl
usio
n of
people with disabilities in
workplaces
.
–
We cont
inue to be re
cogn
ised i
n globa
l L
GB
T
+ in
dice
s, inc
ludin
g being d
esig
nated as a B
est
Pl
ace to Work for LG
BTQ+ Equal
ity in t
he Huma
n Righ
ts Cam
paign F
ounda
tion’s 20
2
1
Corporate Equality Index.
Health, wellbeing
and
development
Be a l
eadin
g compa
ny in how
we support employee
health,
wellbe
ing an
d personal
development
–
GS
K’s Lea
ders
hip T
e
am ha
s conti
nued to over
see ou
r COVI
D-
1
9 re
spo
nse, in
cludi
ng the
he
alth, we
llbei
ng and en
gagem
ent of our e
mploye
es in all o
ur loc
ations
. We contin
uousl
y
mon
itor the im
pact of C
OVI
D-
1
9 on ou
r empl
oyees an
d as publ
ic hea
lth vac
cinatio
n
pro
gram
mes co
ntinue
, we’
re hel
ping to edu
cate and r
aise awa
rene
ss ab
out the
m. Whe
re
the
re are no p
ublic h
ealth va
ccin
ation pr
ogra
mmes avai
labl
e, we have com
mit
ted to of
fer
vac
cinati
ons at mini
mal co
st to our em
ployee
s and the
ir eligi
ble de
pende
nts.
–
We conti
nued to ma
k
e men
tal he
alth tr
ainin
g a
vail
able fo
r all our e
mployee
s, an
d 66% of
man
ager
s have comp
leted it s
ince i
t launc
hed in 201
9. We make c
onﬁ
dentia
l supp
or
t
avail
able th
rough ou
r globa
l Empl
oyee Ass
ista
nce P
rogr
amme, a
nd we suc
ces
sfull
y pilote
d a
new wel
lbein
g progr
amme fo
cuse
d on res
ilien
ce str
ategie
s and ene
rgy ma
nagem
ent and w
ill
continue t
o implement
a global rollout
in 2
02
2.
–
We run he
alth an
d safet
y trai
ning for o
ur peop
le, wh
ich cove
rs how to id
entif
y and t
ake
me
asur
es to redu
ce work
pla
ce ris
ks. I
n 202
1
, o
ur repo
rt
able in
jur
y and ill
nes
s rate rema
ined
at 0.
1
6 pe
r 1
0
0,00
0 hour
s worked a
nd ther
e were no fa
talit
ies
.
–
All o
ur empl
oyees have a
cce
ss to our inte
rnal d
evelopm
ent por
ta
l – the Keep G
rowi
ng
Ca
mpus
. This of
fer
s ex
tensive d
evelop
ment co
urse
s, vi
deos a
nd ar
ticl
es on a ra
nge of topi
cs
,
including
decision making, buildin
g change
capability,
coaching, inﬂuencin
g others
and health
and we
llbei
ng. In 2021
, our peo
ple co
mplete
d 84,49
3 leade
rshi
p and bu
sines
s cou
rses
.
For full details of our progress against these commitments, please see our ES
G P
erformance Report
1
Data o
n employe
es by ge
nder (inc
luding to
tal e
mploye
es, B
oa
rd and m
ana
gement) i
s pro
vide
d in our no
n-ﬁnan
cia
l infor
mat
ion stat
ement o
n page 5
4
3
8
GS
K Ann
ual R
epor
t 2021
T
rust
c
ontinued
Being a re
sponsible busine
ss
Commitment
Pro
gres
s in 20
21
Reliable supply
Co
mmit to qu
alit
y
, safet
y and
reliable supply
of our
products
for pa
tients a
nd con
sumer
s
–
It’s a
priority to
make
sure there
is a
high-quality and reliable
supply o
f our
products fo
r
pati
ents an
d consu
mers
. Thi
s has c
ontinu
ed to be of hig
h impor
t
ance th
rough
out the
pan
demic
, whic
h has pu
t incr
eas
ed stra
in on glo
bal su
pply ch
ains
. For mo
re on how we
man
age co
ntinuit
y of sup
ply, see pa
ges 31 and 33
.
–
Our q
ualit
y man
ageme
nt system
s allow fo
r conti
nuous im
proveme
nt, he
lping us to ke
ep up
hig
h stan
dards f
or prod
uct qua
lit
y and sa
fety. In 2021
, we h
ad 1
7
1 ex
ternal r
egula
t
or
y
ins
pecti
ons at our m
anuf
acturi
ng site
s and loc
al op
eratin
g comp
anies – m
any con
ducted
vir
tua
lly be
caus
e of the pa
ndemi
c. We resp
ond to all in
spec
tion ﬁ
ndings
, no mat
ter how min
or
.
We also r
an 1
,83
3 quali
ty aud
its of su
pplie
rs, a
nd 3
1
2 au
dits of cl
inic
al tria
ls run by, or on
beh
alf of, GS
K to as
ses
s their q
ualit
y and s
afet
y
. Wher
e we ﬁnd ar
eas to im
prove, we cr
eate
improvement
plans and
track their progress.
Ethic
s
and values
Operate
an e
thical, v
alues-
dri
ven cult
ure, in w
hich a
ny
issues are responded t
o swiftly
and transparen
tly
–
Ever
yone at G
SK ha
s to compl
ete trai
ning on w
hat the c
ompany ex
pec
ts from th
em. I
n 202
1
,
we ren
amed th
is man
dator
y empl
oyee cod
e of cond
uct tr
aining ‘
Work
ing at GS
K’ an
d
imp
roved the c
ontent to fo
cus on ri
sk and c
ompli
ance
, as well a
s diver
sit
y and cr
eatin
g an
inc
lusive wo
rkp
lace
. In 202
1
, 99.4% of em
ployee
s and 92.9
% of co
ntrac
t worker
s comp
leted
this training
.
–
Anyon
e insid
e or outs
ide GS
K can r
ais
e conc
erns or s
pea
k t
o an in
depe
ndent th
ird par
t
y
thro
ugh our S
peak U
p repo
rti
ng chan
nels
, conﬁ
denti
ally o
r anonym
ously, wit
hout fe
ar of
ret
aliati
on. We cont
inue to take eve
ry c
once
rn ra
ised s
eriou
sly, and rev
iew ever
y repo
rt to
ide
ntif
y whet
her we nee
d to invest
igate for
mally. If i
nvestig
ations s
how an em
ployee ha
s
breached our pol
icies, we tak
e action.
–
In 2021
, we chang
ed the way we re
por
t disc
iplin
ar
y data an
d expan
ded the s
cope to i
nclud
e
ca
ses w
hich we
re initi
ated in pr
evious ye
ars
. In 2021
, 2
,065 e
mployee
s had co
ncer
ns rai
sed
aga
inst th
em, wi
th an add
itiona
l 7
5
7 emp
loyees w
ith con
cer
ns rais
ed fro
m prio
r year’s ope
n
ca
ses
. W
e dis
ciplin
ed 1
,
1
76 empl
oyees (298 of w
hom init
ially h
ad con
cern
s rais
ed in pr
evious
yea
rs
), an inc
rea
se from 2020 p
rima
rily dr
iven by late c
ompl
etion of m
andato
ry tr
ainin
g. Of
the
se, 265 e
ither l
eft vo
lunta
rily or we
re dism
iss
ed, and 923 r
ecei
ved a wri
tten wa
rning
. In
othe
r cas
es, we to
ok acti
on shor
t of a w
rit
ten warn
ing. At th
e end of 2021
, we ha
d 4
2
7 ca
ses
awaiti
ng in
vestigat
ion or a
disciplinary decision.
–
Dur
ing 2021
, we un
der
took an i
ndepe
ndent a
sse
ssm
ent of ou
r appro
ach to man
aging
hum
an righ
ts, to hel
p us bet
ter unde
rst
and how we c
an con
tinue to im
prove how we ma
nage
our p
riori
ty hu
man ri
ghts are
as
. The a
sse
ssme
nt showed t
hat ther
e is goo
d under
sta
nding
of our h
uman r
ights im
pacts a
nd we will b
e review
ing an
d addre
ssin
g the ﬁnd
ings in th
e year
to
come.
–
How ou
r third p
ar
ties ac
t can h
a
ve a dir
ect imp
act on u
s meetin
g our pri
orit
ies
. It is im
por
tant
to man
age our re
latio
nship
s with the
m well, i
nclud
ing the way we ch
oose
, contr
act an
d
mon
itor them
. Our T
hird-
Par
ty O
vers
ight (
TP
O
) prog
ramm
e evaluate
s and mit
igates th
e risk
s
introduced
through
engagi
ng th
ird-parties to pr
ovide
goods or
servic
es
for
GSK
. W
e
co
mplete a
sse
ssme
nts for th
e por
tion of o
ur third p
ar
ties t
hat may pre
sent gr
eater po
tential
ris
k, fo
r examp
le, inter
acti
ons wit
h governm
ent of
ﬁci
als or a
nnual t
rans
fers of va
lue ab
ove
ce
rt
ain pre
-de
ﬁned li
mits
. In 202
1
, we ran mo
re than 1
2,8
00 a
sses
sme
nts of the
se high
er
ris
k third p
ar
ties ac
ros
s more th
an 20 ris
k area
s, id
entif
yin
g over 55% as h
igh-r
isk in o
ne or
mor
e area
s. M
ost of th
ese th
ird par
ti
es are g
oods an
d ser
vic
es prov
ider
s (
70%
), cont
ract
man
ufact
urer
s and ex
terna
l suppl
iers (2%) or dist
ributo
rs and w
hole
sale
rs (9%
). We are
evalu
ating ou
r TPO p
rogra
mme to si
mplif
y the up
front a
sse
ssm
ent and b
roade
n its foc
us to
risk management throughout the
third-par
ty relationship,
using user feedback and ﬁndings
from our ongoing monitoring.
For full details of our progress against these commitments, please see our ES
G P
erformance Report
GS
K Ann
ual R
epor
t 2021
39
Strategic report
Governance and remuneration
Financial statements
Investor information
T
rust
c
ontinued
Be
ing a re
spon
sible b
usin
ess
continu
ed
Commitment
Pro
gres
s in 20
21
Data and engagement
–
In 2021
, we simpli
ﬁed o
ur pri
vacy noti
ces an
d made th
em eas
ier to ac
ces
s throu
gh a por
tal
on al
l our webs
ites
. Pri
vacy is a key pa
rt of t
he mand
ator
y ‘Work
ing at GS
K’ a
nnual tr
ainin
g
that a
ll our pe
ople have to c
omple
te. This h
elps e
mployee
s to under
sta
nd that ever
yon
e at
GS
K is res
pons
ible for h
andli
ng per
sona
l inform
ation in t
he righ
t way
.
–
Ou
r patien
t panel
s give us in
sight
s and adv
ice, a
s well a
s buildi
ng trus
ting, l
ong-ter
m
rel
ations
hips w
ith pati
ents and c
are
rs that h
elp us deve
lop med
icine
s that me
et patie
nts’ need
s.
In 2021
, we ran pa
nels in d
isea
se are
as in
cludin
g canc
er
, rhe
umatoid a
rth
riti
s and hep
atitis B
.
–
As p
art o
f our co
mmitme
nt to data tr
ansp
aren
cy for our c
linic
al stud
ies
, we have publi
shed
2,7
76 clinic
al stu
dy rep
ort
s and 6,
239 summ
arie
s of res
ults
. W
e have liste
d 2,55
0 studie
s for
data sharing
via ww
w
.vivli.org
and
w
ww
.clinicalst
udydatarequ
est.com.
–
We want our c
linic
al tri
als to be a
s repr
esent
ative an
d acce
ssi
ble as p
oss
ible, r
eﬂec
ting th
e
pati
ent pop
ulatio
ns with th
e dise
ase in
cludi
ng age, r
ace, e
thnici
ty, sex and g
ender. Over t
he
pa
st ﬁve ye
ars
, we have ende
avoured to im
prove pati
ent dive
rsi
ty in ou
r clini
cal tr
ials by
imp
lemen
ting tra
ining a
nd supp
or
t to pers
onnel at i
nvesti
gator site
s inclu
ding awar
enes
s
tra
ining o
n condu
cting c
linic
al tri
als in un
der ser
ve
d commu
nitie
s. In 2021
, we forme
d a Glob
al
Demographics and Div
ersity team t
o coordi
nat
e our
learning
about epidemi
ology
,
burden o
f
dis
eas
e and he
alth eq
uity, and h
ow they rel
ate t
o age
, sex, g
ender, rac
e and ethn
icit
y
, so we
ca
n appl
y these l
ess
ons whe
n plan
ning our t
rials
.
Environme
nt
Have a ne
t zero imp
act on
cli
mate and a net p
osit
ive
imp
act on na
ture by 203
0
Climate
–
T
o a
chieve ou
r ambit
ious ne
t zero goa
l we have set ta
rgets a
cros
s our valu
e chain c
arb
on
foot
print
. The ta
rgets h
ave been ac
cre
dited by the S
cien
ce Ba
sed T
arget
s Initi
ative as a
ligni
ng
to a 1
.5
o
C pathway
.
–
In 2021
, we reduc
ed our o
perat
ional c
arb
on emis
sio
ns (
scop
e 1 and 2) by 1
5
% compa
red to
2020, pr
imari
ly thro
ugh inc
reas
ed use o
f renewa
ble ene
rgy
1
. In S
eptemb
er 202
1
, we
ann
ounce
d a £50 m
illion i
nvestm
ent in U
K and US ma
nufac
turin
g sites to s
ecure r
enewab
le
power g
ener
ation
. This in
clude
s new win
d turbi
nes and a 20
-ye
ar power p
urcha
se agr
eemen
t
to sup
ply sol
ar ele
ctric
ity fo
r our Ir
vi
ne faci
lity i
n Scotl
and, a
nd sola
r ener
gy for our O
ak Hill
fac
ilit
y in New Y
o
rk.
–
I
n 2020 (
o
ur lates
t availab
le data), e
miss
ions fr
om our su
pplie
rs, l
ogist
ics an
d peop
le usin
g our
pro
ducts (sc
ope 3) reduc
ed by 8% r
eﬂec
ting the evo
lutio
n of our pro
duct p
or
tfoli
o and
red
uctio
ns in bus
ines
s travel a
nd comm
uting a
s a resu
lt of the p
andem
ic. Ou
r metere
d dose
inh
aler
s for as
thma an
d COP
D acco
unt for 40
% of our c
arb
on footp
rint so i
n 202
1 we star
ted
an R&
D prog
ramme to ﬁ
nd a lower-im
pact p
ropel
lant tha
t could r
educ
e emis
sions f
rom the
m by
ab
ou
t
9
0%.
Nature
–
Co
llab
oratio
n is an im
por
tant p
ar
t of our str
ategy a
nd durin
g the yea
r we joine
d nine othe
r
global pharmaceutical companies to launch
the Energiz
e programme. This is
the ﬁrst
co
llabo
ratio
n of its k
ind to use th
e sca
le of a sing
le indu
str
y’s globa
l suppl
y chai
n to drive
gre
ater use o
f renewa
ble ele
ctri
cit
y
. W
e were a P
rinci
pal Par
tn
er of the U
N Glob
al Clim
ate
Cha
nge C
onfer
ence (CO
P26
) in G
lasg
ow and we cha
mpio
ned the ne
ed for ac
tion o
n climate
and n
ature to pro
tect he
alth. We als
o joine
d the He
alth Sys
tems T
ask Fo
rce of t
he
Sus
tain
able M
arket
s Initi
ative to dri
ve coll
ecti
ve actio
n in digit
al he
althc
are, s
upply c
hain
s and
pati
ent ca
re pathways to ac
cel
erate the s
hif
t to net zero.
–
We make our C
limate-
Rela
ted Fina
ncia
l Disc
losur
e on pag
es 49 to 52 along w
ith our e
nergy
and c
arb
on emis
sio
ns data
. GS
K’s car
bon re
ducti
on pathway to be
come n
et zero by 203
0
ca
n be found
on gsk
.com
.
1
Ene
rg
y and ca
rbon e
mis
sions d
ata i
s prov
ided in ou
r Clim
ate-r
elate
d ﬁnanc
ial di
scl
osu
re on pa
ges 49 to 52
.
For full details of our progress against these commitments, please see our ES
G P
erformance Report
40
GS
K Ann
ual R
epor
t 2021
T
rust
c
ontinued
Be
ing a re
spon
sible b
usin
ess
continu
ed
Commitment
Pro
gres
s in 20
21
Environme
nt
continue
d
–
We are invol
ved in devel
oping s
tand
ardi
sed gui
danc
e on mea
suri
ng our imp
act on n
ature
thro
ugh wor
king w
ith the S
cienc
e Bas
ed T
a
rgets fo
r Natur
e Initi
ative an
d the T
a
sk
force o
n
Natu
re-r
elated F
inanc
ial Di
sclo
sure
s (T
NFD). We will ach
ieve our net n
ature po
siti
ve goal by
red
ucing o
ur envir
onment
al imp
acts ac
ros
s water
, materi
als an
d biodi
versi
ty an
d investi
ng in
protecting and
restoring nature.
–
In 2021
, we reduc
ed over
all water us
e in our op
erati
ons by 1
6% com
pare
d t
o 2020, an
d by
2
1
% in sites i
n high wate
r stres
s regi
ons. 91
% of our site
s are now g
ood water s
tewards
, in line
wit
h the All
ianc
e for W
ater Stewa
rdshi
p
’s deﬁni
tion
. Durin
g the year, we join
ed the Water
Res
ilien
ce Co
aliti
on (W
RC), par
tner
ing to devel
op our ap
proac
h to water neutr
alit
y in water-
str
ess
ed regi
ons and to d
eliver w
ater res
ilienc
e proj
ects on t
he grou
nd. Our C
ape T
own site i
n
Sou
th Afri
ca is th
e ﬁrs
t in our net
work to e
mbar
k on the jou
rney towar
ds water neu
trali
ty, and
we are wo
rki
ng with t
he WRC a
nd loc
al par
tne
rs to addr
ess s
hare
d water cha
llenge
s by
cle
arin
g alien p
lant s
pecie
s and re
plant
ing loc
al ﬂo
ra to cre
ate greate
r resil
ienc
e in the ba
sin.
–
In 2021
, we reduc
ed the wa
ste fro
m our site
s by 7% and re
covere
d 43% of t
hese m
ateria
ls
through
circular rout
es lik
e reuse
or recy
cling. Consumer
Healthcare launched 40
million
rec
ycle-
read
y toothpa
ste tube
s in over 20 ma
rkets
.
–
In 2021
, we piloted o
ur appr
oach to bi
odiver
sit
y at our Steve
nage si
t
e in th
e UK
, work
ing in
par
tn
ersh
ip with Kew G
arde
ns to deli
ver a 39% in
crea
se of bi
odive
rsit
y at the s
ite. We aim to
have me
asur
able a
nd ef
fecti
ve biod
ivers
ity p
lans in p
lace a
cros
s all GS
K sites by 2025
.
–
In 2021
, we joine
d the publ
ic-p
rivate Lowe
ring Em
issi
ons by Ac
cele
rating F
ores
t Fina
nce
(LE
AF) coalition which
contribut
es high-quality emissions red
uctions b
y supporting countries
to pro
tect their
tropical forests from
deforestation.
For full details of our progress against these commitments, please see our ES
G P
erformance Report
GS
K Ann
ual R
epor
t 2021
41
Strategic report
Governance and remuneration
Financial statements
Investor information
C
onsum
er H
ea
lt
hc
are
Ou
r fu
ture stan
da
l
o
ne C
onsu
mer H
eal
t
h
care busi
n
ess, Ha
l
eo
n, wh
i
c
h is on
trac
k t
o separat
e from GS
K i
n m
i
d
-
2
0
22, will be a new wo
r
l
d l
ead
er f
ocused
on con
sumer h
ealthca
re.
A sec
tor more rel
e
vant th
an e
ver
Global consumer healthcare is a gro
wing, £
1
50 billion-plus
mar
ket. Event
s of the la
st two ye
ars h
ave under
sco
red the
ind
ustr
y’s impo
rt
ance
. The pa
ndemi
c, whi
ch con
tinues to h
ave
an impact across the
world, means consumers are f
ocusing
mor
e on hea
lth and we
llnes
s, w
hether i
t’s manag
ing the
ir
sym
ptoms, o
r proac
tivel
y look
ing af
ter thei
r wellbe
ing wi
th
vitamins
,
minerals and supplements
.
Self-
care suppor
ts healt
hcare
Th
e burde
n on hea
lthca
re syste
ms is inc
rea
sing, d
riven by a
n
ageing popu
lation
and a rising
middle
class population. The
consumer healthcare sector
, par
t
icularly o
ver
-
the-counter
(
O
TC
)
products, play an
import
ant
role in
addressing this challenge.
Dat
a shows th
at for ever
y $1 spent o
n OT
C medi
cine
s in the
US
, the he
althc
are sys
tem saves ove
r $7 which a
mount
s t
o
$1
46 billion ann
ually
.
The opportunit
y fo
r a standalone consumer
healt
hcare company
The consumer healthcare sector’
s role
in supporting broader
pub
lic hea
lth pre
sent
s a signi
ﬁca
nt oppo
rtu
nity f
or a sta
ndalo
ne
company focused on
consumer healthcare.
In 201
8, we ann
ounce
d our pla
n to sepa
rate our C
onsum
er
He
althc
are bu
sine
ss as a U
K
-lis
ted com
pany thro
ugh a
demerger
.
Sin
ce then
, we have made s
igni
ﬁca
nt prog
ress i
n prep
aring
for th
at sepa
ratio
n, whic
h is due to ha
ppen i
n mid-2022.
In J
une 202
1
, we conﬁ
rme
d our intent
ion to sep
arate thr
ough
a dem
erge
r
. I
n July 2021
, Bria
n McN
ama
ra was na
med a
s
CEO-designate f
or the
new
Consumer Healthcare company
,
and i
n Dec
ember 2021 Sir D
a
ve Lew
is was ap
pointe
d
Cha
irma
n desi
gnate. I
n Febr
uar
y 2022 we laid o
ut our st
rategic
pri
orit
ies, key g
row
th drive
rs, d
etai
led ﬁna
ncia
l infor
mation a
nd
the name, Haleon, for
the fut
ure Consumer Healthcare
business
.
See gsk.com for
informa
tion
.
Passing key miles
tones and lo
oking ahe
ad
De
spite th
e chall
enge
s we
’ve all f
aced d
uring th
e pand
emic,
we successfully complet
ed the
integ
ration of
Pﬁ
z
er Consumer
He
althc
are in 2021 wit
h no delay to ti
mings a
s well as ove
r
-
delivering
on our
synergy targets. This
was a
complex
integ
ratio
n which i
mpac
ted multi
ple par
ts o
f our busi
nes
s
including
commercial, manufacturing
and R&D
. The complet
ion
mar
ked a maj
or mile
stone in o
ur sep
aratio
n plan
ning.
Our n
ew Con
sumer H
ealt
hcar
e comp
any
, Hal
eon, w
ill be
UK-ba
sed an
d listed
, and in O
ctober 2021 we ann
ounce
d
pro
posa
ls for new c
ompa
ny head
quar
ters to b
e loca
ted in
Weybri
dge at a new
ly built c
ampu
s whic
h will al
so featu
re
an in
novation c
entre
. Due to op
en at the en
d of 202
4, sub
ject
to
consultation an
d planning
approv
als, our ambit
ion is f
or it
to reﬂ
ect ou
r ambit
ious su
stai
nabil
ity t
arget
s that we set o
ut
in 2020.
We are set u
p for suc
ces
s. We have grow
n from a bu
sines
s
wit
h about £
6 billi
on in an
nual s
ales a
nd an ope
ratin
g margi
n
of 1
1
.3% in 201
5, to one wi
th sale
s of £9.6 b
illio
n and an
ope
rating m
argi
n of 23.
3% in 202
1
; a wor
ld-le
ading c
onsu
mer
healthcare business
.
An indus
try
-leading p
ort
folio
As a w
orld leader in consumer
healthcare, we hold leadership
pos
itio
ns in the ﬁ
ve catego
ries t
hat we ope
rate in: oral h
ealt
h
1
;
vitamins, minerals
and su
pplements
(VM
S
)
;
pain relief
;
re
spira
t
or
y hea
lth; and dig
esti
ve heal
th.
Our g
row
th strate
gy is ba
sed on p
rior
itisi
ng inves
tment in
our ni
ne power b
rand
s and a numb
er of othe
r strate
gica
lly
imp
or
tant br
ands c
once
ntrated i
n key count
ries a
nd regi
ons.
Our previously
described operating
model has been
designed
to dri
ve the per
for
manc
e of the
se bra
nds. T
hrou
gh the
dive
stme
nt of low grow
th b
rands
, we have a foc
used p
ort
foli
o.
Ge
ogra
phic
ally, we are num
ber on
e or two in 70
% of the OTC
and V
MS m
arkets we o
perate i
n.
2
This includes ou
r priority
mar
kets in th
e US and Ch
ina
.
–
Consumer Healthcare had 2
6 ﬁrst
-market
launches for
new in
novation
s in 202
1
–
T
o
tal 2021 turnover £
9.6 bill
ion -
1
% AER
, +4% CE
R
(
ex
cluding
brands divest
ed/un
der revie
w
)
–
E-commerce represent
ed 8% of
to
tal sales
–
Delivered 3.
7
billion
consumer healthcare products
–
Committed to
producing one
billion
recyclable
toot
hpaste
tube
s by 2025
–
Sig
niﬁc
ant inve
stme
nt in on-s
ite sola
r power towar
ds goa
l
to sou
rce 1
00
% of our ele
ctri
cit
y from re
newabl
e sourc
es
by 2025
–
An
nounc
ed grow
th am
bitio
ns of 4-
6% annu
al orga
nic sa
les
grow
th in t
he medi
um term, s
usta
inab
le mode
rate mar
gin
expansion and
high cash conv
ersion
1 T
her
apeut
ic ora
l health s
eg
ment
2
Nichol
as H
all's D
B6 Con
sume
r Health
car
e (OTC
/
V
MS) Da
taba
se,
2020 S
tore and E
-comm
erce s
ale
s
42
GS
K Ann
ual R
epor
t 2021
2021
performance
Co
nsume
r Hea
lthc
are tur
nover in the ye
ar of £9
,607 milli
on
dec
rea
sed 4% AE
R and was s
tabl
e at CER re
ﬂec
ting dil
ution
fro
m dives
tments g
iven the c
ompl
etion of t
he por
tf
olio
rati
onali
satio
n at the end o
f Q
1 202
1
. O
n a two
-year CAG
R,
sa
les exc
luding b
rand
s dives
ted/unde
r review gr
ew 4% overall
,
de
spite the a
dver
se impa
ct of the C
OVI
D-
1
9 pan
demi
c.
Sa
les excl
uding b
rands d
iveste
d/under r
eview de
crea
sed 1
%
AE
R but inc
reas
ed 4% CER r
eﬂec
ting th
e under
lying s
treng
th
of br
ands ac
ros
s the por
t
folio an
d catego
rie
s, and c
ontinu
ing
grow
th in e
-co
mmerc
e. Ove
rall
, sale
s bene
ﬁted fr
om stro
ng
grow
th ac
ross a
ll categ
orie
s exclud
ing re
spira
t
or
y hea
lth whi
ch
was n
egati
vely imp
acted in Q1 202
1 by the hi
stori
call
y low col
d
and ﬂ
u sea
son. T
he dec
rea
se in co
ld and ﬂu s
ale
s resu
lted in an
approximat
ely 1
% drag on
full-y
ear growth.
Internation
al sales excl
uding brands
divested/
under
review
grew
hig
h single d
igit on a C
ER ba
sis wi
th doub
le digit g
row
th in
eme
rging m
arkets i
nclud
ing Ind
ia, C
hina
, the M
iddle E
as
t and
Afr
ica
. E
xcludi
ng bra
nds dive
sted/und
er revi
ew
, US sa
les gr
ew
low si
ngle di
gits but E
urope
an sa
les wer
e stab
le on a C
ER
basis. Both regions
were particularly negat
ively impact
ed b
y
the hi
stori
call
y low col
d and ﬂu se
aso
n durin
g Q
1 202
1
.
See Group ﬁnancial review on page 65 for more detail
Scienc
e-based innovation to address unmet
consumer n
eeds
In
novation c
ontinu
es to be a dr
iver of gr
owth
. In 2021
, we
delivered major
inno
vatio
ns based on t
rusted science
and
hum
an unde
rst
anding to m
eet the ne
eds of c
onsum
ers ac
ros
s
the wor
ld. I
n total, w
e delive
red 26 ﬁr
st-mar
ket launc
hes of ne
w
innov
ations, and
more than
350 brand-marke
t launches
overall.
Our r
ese
arch s
hows that a th
ird of toot
h sensi
tivit
y suf
fer
ers
are searching f
or a
trusted, long-lasting
solution
to
address
the c
ause of t
he pain
, rathe
r than ju
st tre
at the sym
ptoms. T
o
add
res
s this key co
nsume
r need
, we innovated to deve
lop an
d
launch
Senso
dyne Rep
air and P
rotec
t Deep R
epair
in more
tha
n 25 market
s. Th
is is a pro
duct s
cienti
ﬁc
ally pr
oven to
prov
ide de
ep and ta
rgete
d repai
r withi
n the dent
ine tubu
les –
hol
es in the t
issu
e bene
ath the tooth e
name
l that are t
he sour
ce
of the p
ain – wh
ile als
o provi
ding lon
g-la
sting p
rotecti
on fro
m
sensitivity
.
In o
ral he
alth
, we have also ex
pand
ed our Gu
m Hea
lth expe
rt
of
feri
ng unde
r our
paradonta
x
brand i
n the US
. Rese
arch s
hows
a thir
d of peo
ple glo
bally s
uf
fer fro
m bleed
ing gum
s, whi
ch may
be a si
gn of gum d
isea
se. O
ur
paro
donta
x Act
ive Gum Re
pair
inn
ovation is c
linic
ally p
roven to help r
evers
e the ear
ly sig
ns of
gum di
sea
se. I
t also st
rengt
hens th
e appe
al of the br
and to
more consumers with
gum problems
by
reinforcing
our
credentials
with den
tal experts.
Th
e COVI
D-
1
9 pa
ndemi
c has a
lso acc
eler
ated a co
nsume
r
shi
ft towa
rds gre
ater pro
activ
ity i
n manag
ing thei
r heal
th and
wellness, with research high
lighting
that
22%
of consumers, in
the US f
or example, t
ook more
supplements in
202
0 than
they
did i
n the pri
or year. Rese
arc
h also un
covere
d that mor
e than
85% o
f
Centr
um
consumers fa
vou
r solutions
which are
more
ta
rgeted th
an a mult
ivit
amin. B
ase
d on this i
nsight
, we laun
ched
tailored solutions
that
are scientiﬁcally blended
for
Centr
um
in a num
ber of key ma
rkets
. In Aus
tral
ia we moved b
eyond ‘
the
mult
ivit
amin’ and l
aunch
ed a new
Centrum Beneﬁts
range
with
multi-ingredien
t combinat
ions in
order t
o cat
er for
consumer
nee
ds acr
oss mi
nd, bod
y and be
aut
y inclu
ding Mi
nd & Me
mor
y
,
Res
t & Renew, Imm
une Def
ence & Re
cover
y and C
olla
gen
Bo
ost & Gl
ow
. In Ch
ina we suc
ces
sful
ly launc
hed
Centrum
Dual Probiot
ics
, a
proposition th
at is
specially designed t
o
app
eal to th
e growin
g consu
mer tre
nd arou
nd gut he
alth a
nd
the b
ody's s
elf-de
fence p
ower
. In the U
S, we co
ntinue
d to
inn
ovate in new for
mats by exp
anding t
he
Centrum Minis
and
Cent
rum Gummies
por
t
folios
, incl
uding th
e launc
h of
Centrum
Organic Mult
igummies
. Thes
e innovati
ons he
lp us evolve th
e
br
and fro
m a singl
e multiv
itam
in pill a
nd brin
g a numbe
r of
personalised so
lutions
– al
l based o
n trust
ed sc
ience and
info
rmed by c
linic
al dat
a.
We have conti
nued to se
e an inc
reas
ed inter
est in o
ur
Emergen-C
b
rand in t
he US, a
s con
sumer
s cont
inue to loo
k for
ways to sup
por
t thei
r immune h
ealt
h. Our r
esea
rch reve
aled t
hat
co
nsume
rs are l
ooki
ng to bota
nica
ls, fo
r their na
tural qu
aliti
es,
in or
der to sup
por
t their we
llne
ss goa
ls. We laun
ched a
for
mulati
on whic
h comb
ines th
e natura
l goodn
ess o
f plant-
ba
sed bot
anic
als a
nd all the n
utrie
nts fro
m our cor
e
Emergen-C
for
mula wi
th antiox
idan
ts, B an
d C vita
mins and e
lect
roly
tes
.
We also c
ontinu
e to invest in l
oca
lly rel
evant innova
tion. I
n
Chi
na, o
ne of our key ma
rkets
, we launc
hed
Contac Multi-
Symptom
. This in
novation
, the big
gest OTC la
unch (by s
ales)
for ou
r busin
ess i
n China i
n 202
1
, pr
ovide
s fast r
elief f
rom
multiple cold and
ﬂu sympt
oms.
Cont
ac Mul
ti-Sympt
om
co
mpris
es thr
ee acti
ve ingre
dient
s in a sing
le pill to re
lieve
seven c
old an
d ﬂu symp
toms: fever, heada
che, s
neezin
g, run
ny
nos
e, limb p
ain, s
ore thr
oat and na
sal c
onge
stio
n.
Investm
ent in digit
al driving grow
th
Th
e pande
mic ha
s also s
een an ex
plos
ion in di
gita
l comme
rce
and d
igita
l engag
ement
. W
e have be
en well po
sitio
ned to
capture t
hat
digital oppo
rtunity.
E-c
ommer
ce sa
les gr
ew in the mid
-
20% r
ange in 2021 vers
us
2020. O
verall
, e-c
omme
rce re
pres
ents 8% of to
tal sa
les
.
We saw goo
d grow
th in so
me of our key e-
com
merc
e market
s
including China.
We also inve
sted in c
apa
biliti
es aro
und digi
tal me
dia
. A
sig
niﬁc
ant pr
opor
tio
n of our tota
l adver
tis
ing spe
nd is now in
digi
tal me
dia
, allow
ing us to be m
ore ef
ﬁc
ient an
d effe
ctive i
n
targeting ou
r consumers.
Consumer he
althc
are
continued
GS
K Ann
ual R
epor
t 2021
43
Strategic report
Governance and remuneration
Financial statements
Investor information
Consumer he
althc
are
continued
A purpose an
d culture guidin
g all w
e do
We ser
ve hund
reds of m
illion
s acros
s the wor
ld and
, throug
h
our b
rand
s, have a sig
niﬁc
ant ef
fec
t on thei
r ever
yday hea
lth.
Our f
uture s
tand
alone c
ompa
ny will be r
ooted in a p
urpos
e to
del
iver bet
ter ever
yday he
alth w
ith huma
nit
y
. This w
ill guid
e
ever
y
thing we d
o and the ch
oice
s we make.
Our s
ucc
ess de
pend
s on cre
ating the r
ight cu
lture. A
s a
consumer healthcare business, it’s clear that
what w
e do
matters.
Our c
ulture s
tar
ts wi
th always d
oing the r
ight th
ing. Ac
ting wi
th
integ
rit
y is non-
negot
iable
, and that m
eans we c
an al
ways be
pro
ud of how we op
erate. O
ur cultu
re focu
ses on t
hree
behaviours
:
–
Go beyon
d
– this is a
bout ou
r hunger a
nd des
ire, o
ur drive
to be be
tter, to move with p
ace, a
nd to outpe
rf
orm the
competition.
–
Do wha
t mat
ter
s most
– th
is is ab
out pri
oriti
sing th
e
imp
or
tant thi
ngs an
d chall
enging t
he unne
ces
sar
y.
–
Keep it hu
man
– thi
s is abou
t our ded
icati
on to the
consumers and cust
omers we
serve. But, equally important,
it
’
s abou
t our ded
icati
on and c
ommit
ment to ea
ch other,
which demands un
matched
understanding and
empath
y
.
Bui
lding th
e right c
ulture s
tar
ts wi
th having a d
ivers
e work
forc
e
and c
reati
ng an inc
lusive e
nviron
ment wh
ere co
lleag
ues c
an
thr
ive. We believe t
hat incl
usio
n and dive
rsit
y (I&
D
) lea
ds to
bus
ines
s succ
es
s by unlea
shin
g the enor
mous p
otentia
l of all
our p
eople a
nd str
engthe
ning ou
r abilit
y to res
pond to th
e
dif
fer
ing nee
ds of our p
atient
s and co
nsume
rs.
Our commitment
to
accelerate
our progress on
I&D remains
a priority
, includ
ing w
orking to
wards aspirational
targets f
or
female and
ethnically d
iverse representation
in senior
roles by
the e
nd of 2025.
Running a resp
onsible business
Havi
ng a stro
ng ESG st
rategy a
nd per
for
manc
e will be a c
riti
cal
exp
ectat
ion our f
uture s
tanda
lone c
ompa
ny
. It is an i
ntegra
l par
t
of how we li
ve our pur
pos
e – t
o del
iver bet
ter ever
yday he
alth
wit
h human
ity – a
nd a key pilla
r of our st
rategy. ESG is
increasingly impor
tant to
our stakeholders.
The health of t
he world
affects the health of
people. People
ca
n
’t e
njoy bet
ter ever
yday he
alth in a wo
rld wh
ere our
environmen
t is un
der threat
and society is
increasingly unequal
and divi
ded, with
heigh
tened
economic
inequal
ity manifesti
ng
its
elf in gr
owing h
ealth i
nequa
litie
s. T
he focus o
f our ESG
str
ategy is t
herefo
re to tack
le the e
nviron
ment
al and so
cial
bar
rier
s to ever
yday hea
lth.
–
Environment
al:
by tack
ling c
arb
on emis
sion
s and cli
mate
cha
nge, deve
lopi
ng more s
usta
inabl
e pack
aging a
nd using
trusted in
gredients which
are sustainably
sourced, we
are
ta
king s
teps to cre
ate a hea
lthy envir
onmen
t for peo
ple to
live i
n.
–
Social:
by improving health
inclusivity; tackling the bias,
discrimination
and prejud
ice which holds
people back
from
ever
yday he
alth an
d educ
ating an
d empowe
ring pe
ople
tow
ards better
, sustainable self-care, w
e will
help creat
e
a he
althy so
cial e
n
vir
onmen
t for peo
ple to live in
.
–
Go
vernance
:
by deﬁ
ning our s
trateg
y and gover
nanc
e to
reﬂect increasing stakeholder
expectations
; supported b
y the
app
ointm
ent of a Bo
ard le
d by Sir Dave Lew
is, w
ho brin
gs a
wealth of
int
ernational
consumer sector
experience.
Thi
s year, we have step-
chan
ged ac
tion on s
usta
inabi
lity,
inc
luding s
igni
ﬁca
nt invest
ment in o
n-site s
olar powe
r as pa
rt
of our g
oal to so
urce 1
00
% of our el
ectr
icit
y from r
enewab
le
sou
rces by 2025
, comm
itti
ng to make a bi
llion toot
hpas
te tubes
rec
yclab
le by 2025 and ac
hievin
g full pa
lm oil der
ivati
ves
acc
redi
tation b
y 2025. Thro
ugh our
O
trivin
Actions
to
Breathe
Cle
aner P
roje
ct, we ar
e cam
paign
ing to help c
hildr
en lea
rn
mor
e abou
t air pol
lution a
nd ide
ntif
y the be
st way to minim
ise
our ex
posu
re to it. We sc
aled up o
ur educ
ation o
n this topi
c
to
a broader
population
through
a high
proﬁle presence a
t the
202
1 CO
P26.
In 2022, a
head o
f beco
ming a st
anda
lone co
mpany, we will
co
ntinue ou
r work to deﬁ
ne our S
ocia
l Sust
ainab
ilit
y Strateg
y
and Governance, reﬂecting increasing stakeholder
expectations.
4
4
GS
K Ann
ual R
epor
t 2021
St
a
k
eholder enga
gement
Engaging an
d bu
ildi
n
g tr
ust wi
t
h a br
oad ra
nge o
f stakeh
o
l
ders is vital
for our
long-ter
m s
uccess
.
He
re, we sum
mari
se who ou
r key stake
holde
rs ar
e, how we eng
age wi
th them, w
hich i
ssue
s mat
t
er mo
st to them a
nd how
we’re res
pondi
ng. T
o s
ee how we en
able th
e Boar
d and man
ageme
nt to unde
rsta
nd sta
kehold
ers’ vi
ews and i
nclud
e them in
decision making, see our
section 1
72 stat
ement
on page
1
1
6.
Patient
s
and consumers
Ins
ight
s fro
m pat
ient
s and c
onsum
ers e
nabl
e us to deve
lop
products that better meet
their
needs.
How we e
ngag
e
Advisory boards, disease-speciﬁc pa
tient
panels
and P
atient
Adv
ocacy
Leaders Summits
to
provide
patient
insight
s.
Eng
age
ment a
nd sup
por
t for pa
tien
t group
s (
dis
clos
ed on G
SK
.co
m
),
an
d initi
ative
s that e
mpowe
r patie
nts to ge
t involv
ed in me
dici
ne
development.
Market research including
consumer sensory labs.
Wh
at mat
te
rs to p
atie
nt
s and co
nsume
rs
Dif
f
erentiat
ed product in
nova
tion based on
patient
and consumer
needs.
Access to a
reliable supply
of h
igh-quality products.
Pricing of
healthcare
products,
particularly out
-of
-pock
et e
xpenses.
Wh
at we’re d
oing
Strengthening our
pipeline o
f innov
ative
products.
Ma
int
ainin
g high s
tan
dard
s for pr
oduc
t qua
lit
y and sa
fet
y
.
C
ontin
uing to t
ake a val
ue-b
ase
d appr
oach t
o pric
ing to ba
lanc
e
rewa
rd for i
nnovat
ion wi
th ac
ces
s and af
for
dab
ilit
y.
Inve
st
ors
We ma
int
ain reg
ular a
nd con
str
uct
ive di
alogu
e wit
h inves
tors t
o
co
mmuni
cat
e our s
trat
egy an
d per
for
manc
e in ord
er to pr
omot
e
inve
stor c
onﬁ
denc
e and e
nsure o
ur con
tinu
ed ac
cess t
o cap
ita
l.
How we e
ngag
e
On
goin
g comm
unic
atio
ns inc
ludi
ng the AG
M, qu
ar
terl
y res
ults c
alls
,
in-person and virtual roadshow
s and
detailed company
information
online.
One-t
o-one meet
ings
between Board
members, senior
ex
ecutives
and
institutional
invest
ors.
Biennial in
vest
ors and
analysts
percepti
on stu
dy
.
What matters t
o in
v
estors
Sustainable performance for long-
term shareholder
value.
Un
ders
tan
ding h
ow our R&
D str
ategy i
s succ
es
sful
ly deve
lopi
ng our
pipeline.
Commitment to
strong
management of
ESG issues.
Wh
at we’re d
oing
Creating two
new leadi
ng companies th
rough demerger
in 20
22.
Good ﬁnancial
performance and
transparent
reporting.
Bu
sine
ss an
d R&D up
date
s and eve
nts on key p
ipel
ine mil
esto
nes
.
Dr
ivi
ng lea
ding
-edg
e ESG pe
rf
orma
nce a
nd a cul
ture of a
mbi
tion
,
accountabilit
y
and responsibility.
Healt
hcare professionals and me
dical exper
ts
We wor
k with h
eal
thc
are pr
ofes
sion
als (H
CPs) and m
edi
cal
exp
er
ts to u
nder
st
and th
e pat
ient
s’ jo
urney, p
art
ner t
o reso
lve
unm
et me
dic
al nee
ds and m
ake sure t
hat o
ur pro
duc
ts ar
e used
safely and effec
tively
.
How we e
ngag
e
Scientiﬁc dialogue
to
increase understanding
of
disease management
and pat
ient e
xperience.
Providing hig
h-quality,
balanced informat
ion about o
ur vaccines
and
medicines.
Collaborating
on cl
inical t
rials and
research.
Wh
at mat
te
rs to H
CPs a
nd med
ica
l expe
rt
s
Ac
ces
s to pro
duct a
nd sci
enti
ﬁc in
form
ation
.
Responsible sales and mark
eting
practices.
Saf
ety, ef
ﬁc
acy an
d dif
fer
enti
ated inn
ovatio
n.
Wh
at we’re d
oing
In
cre
asin
g the us
e of dig
ital c
han
nels to d
elive
r more p
ers
ona
lise
d and
ef
fec
tive s
hari
ng of in
form
ation to H
CP
s.
Ens
uri
ng we att
rac
t and re
tain t
he be
st tal
ent an
d upho
ld re
spon
sibl
e
sales and
marketi
ng standards.
Using HCP in
sights
on disease mana
gement and
patien
t experience
to
inform the
dev
elopment of
our
vaccines and
medicines.
R&D pa
rt
ners
and academia
We
partner
w
ith
scie
ntiﬁc i
nstit
ution
s, na
tion
al
health
s
yste
ms,
ac
adem
ia an
d indus
tr
y par
tn
ers to h
elp us d
evelop t
he mos
t
ef
fe
cti
ve vacc
ines a
nd med
icin
es to me
et unm
et pa
tien
t nee
ds.
How we e
ngag
e
Collab
orating
with outstanding scientists at academic institutions to
accelerate disco
very and dev
elopment o
f new
vaccines and
medicines.
Licensing a
dvanced t
echnolog
y and
pot
ential
vaccines
and med
icines
from biotechs.
Establishing join
t ven
tures t
o
strengthen
innov
ation
and impro
ve
ef
ﬁciency
.
Wh
at mat
te
rs to R&
D par
tne
rs an
d aca
demi
a
Fi
nding t
he ri
ght pa
rtn
er to ide
ntif
y an
d acc
eler
ate a pote
ntia
l vacc
ine
or m
edic
ine to re
ach th
e patie
nts th
at nee
d it.
Pu
shin
g the sc
ienc
e and te
chno
logy a
s far a
s it ca
n go to ad
vanc
e
human health.
Dissemination and
advancemen
t of
scientiﬁc knowledge.
Wh
at we’re d
oing
W
orking with w
orld-leading experts at
biotechs,
research institutes
an
d unive
rsi
ties to i
mprov
e drug a
nd vac
cine d
isco
ver
y to incr
eas
e the
productivity of our R&D
pipeline.
C
olla
bora
ting wi
th a bro
ad ra
nge of p
ar
tner
s to supp
or
t our R&
D focu
s
on th
e sci
ence o
f the im
mune sy
stem
, huma
n gene
tics a
nd adv
anc
ed
tec
hnol
ogie
s (
see p
age
s 1
7 to 27).
Sup
por
tin
g the ad
vanc
emen
t of sci
enti
ﬁc k
nowle
dge w
ith ou
r
lo
ng-s
tand
ing co
mmit
ment to s
hari
ng re
sea
rch se
e page 3
9.
GS
K Ann
ual R
epor
t 2021
45
Strategic report
Governance and remuneration
Financial statements
Investor information
Stakehold
er engagement
continued
Governments and regulators
We wor
k with g
overnm
ent
s and re
gul
ator
s to advo
cate f
or pol
icie
s
th
at en
cour
age inn
ovati
on and p
romo
te ef
ﬁc
ient m
anag
emen
t of
healthc
are
spending.
How we e
ngag
e
Meeting with
regulatory bodies th
roughout t
he dev
elopment process t
o
ensure high-qualit
y
new products.
Eng
agin
g with g
overn
ment h
eal
th agen
cie
s to demo
nstr
ate the va
lue of
our p
rodu
cts fo
r pati
ents an
d eco
nomi
es.
Work
ing w
ith gove
rnm
ents to pr
otec
t and st
reng
then th
e ope
ratin
g
env
iron
ment fo
r life s
cien
ces i
nnovat
ion an
d new me
dici
ne and va
cci
ne
launches.
Par
ti
cipa
ting in i
nter
natio
nal ef
for
ts to a
ddre
ss gl
oba
l heal
th thr
eats
,
such as t
he pandemic.
Wh
at mat
te
rs to gove
rnme
nt
s and re
gula
tors
Inve
stm
ent in i
nnovat
ion an
d life s
cien
ces
.
Scientiﬁc funding
and collaboration.
Medicines pricing and reimbursement.
Pu
blic h
eal
th thre
ats – C
OVID
-
1
9 a
nd ant
imic
robi
al re
sist
anc
e (AM
R).
Investment in preventive health and stre
ngthening health systems.
Wh
at we’re d
oing
Engaging in
US policy pricing/
reimbursement debates
and, with
phRM
A, commenting
on legislativ
e proposals f
or healthcare refo
rm.
Par
tn
erin
g acro
ss in
dust
ry a
nd gove
rnme
nts to ta
ckl
e AM
R.
Eng
agin
g with g
overn
ment
s, in
cludi
ng the U
S, U
K and EU r
egar
ding
pro
duc
tion a
nd pro
cure
ment o
f COVI
D
-
1
9 vac
cine
s and tr
eatm
ents
.
NGOs and multilateral organ
isations
We wor
k with p
ar
tner
s to imp
rove ac
cess t
o heal
thc
are s
erv
ice
s
and o
ur pro
duc
ts
, and to a
dvoc
ate fo
r the p
olic
y enviro
nme
nt in
whi
ch we ca
n be su
cces
sfu
l and de
liver o
n our amb
iti
ons
for patients
.
How we e
ngag
e
W
orking with non-go
vernmental organisat
ions (NGOs
)
and partners to
research and dev
elop products
to
address global health
challenges.
Collaborating with
NGOs and generic
manufacturers t
o sustainably
supply our
products t
o lo
wer i
ncome countries.
Par
tn
erin
g to stre
ngth
en he
alth sy
stem
s in lower i
nco
me cou
ntri
es an
d
drive progress on
global health
priorities.
Wh
at mat
te
rs to N
GOs an
d mult
ilat
eral o
rga
nisa
tion
s
Access t
o
va
ccines
and
med
icines.
UN S
DG
s and WH
O tar
gets fo
r spe
ciﬁ
c dise
as
e area
s.
Uni
ver
sal h
ealt
h cover
age an
d the fu
ture o
f heal
th sys
tems
.
Financing for global
health, including
COVID
-
1
9
solutions.
Wh
at we’re d
oing
Fo
cusi
ng on ou
r uniq
ue rol
e as a glo
bal h
ealt
h par
tne
r to devel
op
pro
duc
ts whe
re we have s
cien
tiﬁ
c expe
rt
ise.
Partnering with organisations
that
hav
e complementary capabilities
an
d reac
h to cre
ate sus
tain
able m
ode
ls that s
hare r
isk
, inc
ludi
ng our
pa
rtn
ers
hip wi
th Gav
i to supp
or
t acc
ess to va
cci
nes in l
ower in
come
countrie
s.
Leveraging
our commun
ity investment
programmes t
o support our
scientiﬁc expertise and
deliver
great
er impact
for
patients.
Supplie
rs
We wor
k with t
hous
ands o
f supp
lier
s, l
arge a
nd sma
ll, w
ho provi
de
go
ods and s
er
vice
s tha
t supp
ort u
s in del
iverin
g a reli
able s
uppl
y
of hi
gh-
qu
alit
y, sa
fe prod
uct
s for o
ur pat
ien
ts an
d cons
umer
s.
How we e
ngag
e
Regular direct
engagement with
suppliers t
o ensu
re the
y support
GS
K’s str
ategi
es an
d tar
gets
.
Engaging with
suppliers th
rough our
Third-Part
y
Oversight programme
and by
conducting in-depth audits.
Participating in f
orums such
as the
Pharmaceutical Supply Chain
Initiative
and the
Consumer Goods Forum
to
improve
supply chain
sustainabilit
y
.
Wh
at mat
te
rs to su
ppli
ers
Pr
ompt p
aymen
t to agre
ed ter
ms.
Understanding GSK policies t
o ensure
compliance.
Op
por
tuni
tie
s to innova
te and gr
ow the re
lati
onshi
p.
Wh
at we’re d
oing
Engaging with
suppliers t
o de
velop
improvement
plans
and track
progress when w
e ident
ify areas for imp
rovemen
t.
Pr
ovidi
ng pro
acti
ve sup
por
t thr
ough ou
r thir
d-pa
rt
y EH&
S team i
n
countries where ou
r priority suppliers are
located.
Our people
We invo
lve and li
ste
n to our pe
opl
e to inc
reas
e empl
oyee
engagement
, driv
e business performance and retain talented
people.
How we e
ngag
e
Reg
ular i
nter
acti
ve broa
dca
st eve
nts wit
h the G
L
T a
nd oth
er sen
ior
leaders.
Facilitating dialogue and collaboration through
our int
ernal
communications pla
tforms, Works
Councils, Employee
Forums and
Employee Resource Groups
.
Providing
feedback
t
o mana
gers via
the g
lobal al
l-company
survey an
d
One80 questions
.
Wh
at mat
te
rs to ou
r peo
ple
Ou
r purp
ose a
nd bei
ng abl
e to see th
e dif
fer
ence w
e make.
Hav
ing a gr
eat li
ne man
ager.
Feeling
understood
and
valued.
Be
ing pa
rt o
f an inc
lusi
ve and di
ver
se wor
kpl
ace.
Wh
at we’re d
oing
Fo
steri
ng a cul
ture of a
cco
unta
bili
ty an
d amb
itio
n, und
erpi
nned by
integrity and humanity.
Launched new leadership
programmes to
help mana
gers motiva
te,
foc
us, c
are fo
r and d
evelop t
heir te
ams
.
Ca
mpai
gns an
d prog
ram
mes to s
uppo
rt s
afet
y
, men
tal we
llbe
ing an
d
enable work
-life balance.
Dr
ivi
ng our di
vers
it
y and in
clus
ion ac
tivi
tie
s in sup
por
t of new
aspirational
targets.
46
GS
K Ann
ual R
epor
t 2021
Risk mana
gement
Ou
r risk managemen
t a
nd i
nt
er
nal con
tro
l fram
ewo
rk is we
ll
-embedd
ed,
mature, an
d co
n
t
i
n
u
ousl
y r
eviewed a
nd o
verseen by t
h
e Board
.
Iden
tif
ying, evalua
ting and man
aging risk
Our risk managemen
t and
internal
control frame
work is
well-
emb
edde
d and prov
ides t
he abil
ity fo
r the Boa
rd to evalu
ate and
oversee ho
w the
company
manages principal
and emerging
risks
in lin
e with ou
r long-ter
m obje
ctive
s. We have a com
pany-w
ide
policy that
sets out
the requirement
s, roles and responsibilities
for th
e manag
ement a
nd gover
nance o
f risk
s, co
ntrols a
nd
sup
por
ting gu
idanc
e on the e
sse
ntial el
ement
s of our inte
rnal
control framework. W
e ro
utinely ev
aluat
e our framew
ork for
improvements.
Ou
r gove
rna
nce
Th
e Boar
d overse
es our r
isk ma
nagem
ent syste
m and
es
tabli
shes o
ur ris
k appet
ite, sup
por
ted by the Au
dit & Ri
sk
Committee (ARC
).
The Corporate
Responsibil
ity Committee
(CRC) and S
cienc
e Co
mmit
tee fur
ther a
sse
ss th
e effe
ctive
nes
s
of ri
sk man
ageme
nt strate
gies p
er
tinent to th
eir deﬁ
ned re
mits
.
Our R
isk O
vers
ight & C
ompli
ance C
ounc
il (ROC
C
) hel
ps the
AR
C and CR
C to overse
e the ri
sks, a
nd the st
rategie
s use
d t
o
address them.
Ri
sk mana
gemen
t and co
mplia
nce bo
ards ac
ros
s the Gro
up
pro
mote the ‘
tone fr
om the top’
. They a
lso es
tabli
sh our r
isk
cul
ture and ove
rse
e the ef
fecti
venes
s of ri
sk mana
gemen
t
act
iviti
es, a
s well a
s commu
nicat
ing info
rmatio
n abou
t intern
al
co
ntrols
. Our bu
sine
ss is ac
count
able f
or deli
vering o
n its
obj
ective
s in lin
e with it
s esta
blish
ed ris
k appe
tite.
An Enterprise
Risk Owner is responsible f
or each
principal risk,
wit
h oversi
ght by a GLT membe
r
. Risk ow
ners r
epor
t ri
sk and
miti
gatio
n to ROCC
, the GL
T and t
he appr
opri
ate Boar
d
co
mmit
tee. Le
gal and C
omp
lianc
e supp
or
t these e
ffo
rts b
y
advising on
our
business strat
egies, activit
ies, risks and
controls,
and A
udit & As
sur
ance pr
ovide
s ass
ess
ments o
f the ade
quacy
and e
ffe
ctive
ness o
f our fra
mework
.
Co
nsidering curren
t and emergin
g risks
Our r
isk a
sse
ssme
nt proc
ess c
onsi
ders t
he likeli
hood an
d
imp
act of ri
sks
, and the ti
mesc
ale ove
r which a r
isk co
uld oc
cur
.
We cons
ider bo
th curr
ent and e
mergi
ng risk
s that co
uld af
fect
our a
bilit
y to achi
eve our long
-term obj
ecti
ves. E
mergi
ng risk
s
are t
hose on t
he thre
e-yea
r hori
zon, in li
ne with o
ur viab
ilit
y
st
atement
. W
e also d
eﬁne r
isks i
n this way if we n
eed to kn
ow
mor
e abou
t how likely t
hey are to mate
riali
se, or w
hat imp
act
they
’
d have if they di
d. W
e wil
l evaluate if a
dditi
onal inve
stig
ation
is required
before classifying them as principal
risks. Risk
man
ageme
nt and c
ompli
ance b
oards a
t all level
s of the
organisation iden
tify emerging risks on
an ongoing
basis, and
ROC
C dis
cuss
es eme
rging r
isks at e
ach me
eting. We als
o sca
n
the r
isk hor
izon thr
ougho
ut the yea
r to identi
fy ex
ter
nal tre
nds
that m
ay be oppo
rtu
nitie
s and/or eme
rging r
isks a
nd moni
tor our
business activitie
s
and int
ernal environment for
new
,
emerging
and changing
risks.
ROC
C con
ducts a
n annua
l risk r
eview to a
sses
s pri
ncipa
l and
eme
rging r
isks fo
r the com
pany. This r
eview is s
uppor
ted by
ex
tensi
ve analy
sis of ex
tern
al tren
ds and i
nsight
s, se
nior leve
l
interviews and
recommendations
from risk mana
gement and
compliance boards and
risk owners. ROCC shares this
annual
revi
ew with th
e ARC an
d Boar
d for as
ses
smen
t and this f
orms
the b
asis fo
r the foll
owing ye
ar’s ris
k manag
ement fo
cus.
Put
ting ris
k managem
ent plans in pl
ace
W
e deﬁne en
terprise risk
plans tha
t include
a description
of t
he
ris
k, i
ts contex
t, o
ur as
sess
ment
, risk a
ppeti
te, how we wil
l treat
the r
isk
, and the a
ction
s busin
ess
es nee
d to take in li
ne with ou
r
inter
nal c
ontrol f
ramewo
rk to miti
gate the ri
sk. T
hey als
o enab
le
our B
oard c
ommit
tee
s t
o as
ses
s the ef
fec
tivene
ss of ou
r risk
man
ageme
nt stra
tegies
. Thi
s year, along w
ith our a
nnual b
usine
ss
risk reports, we continued
quarterly reporting of risks t
o ROCC
and t
he Boa
rd com
mitte
es, to dr
ive mor
e dyna
mic, d
ata-dr
iven
dis
cuss
ions
, agile r
isk ma
nagem
ent str
ategie
s and over
sight
. W
e
report on existing cont
rol measures, implementation,
emerging
ris
ks, ex
ter
nal ins
ights a
nd out-of-toler
anc
e key risk in
dicato
rs,
where tolerance
aligns t
o risk
appetite.
W
e i
nclude risks an
d
mitigat
ions associat
ed with
COVID-
1
9.
Our risk management framew
ork complements ou
r culture
and
Sp
eak Up p
roce
sse
s in ensu
ring th
at risk
s are act
ively a
nd
effectively identiﬁed and m
itigat
ed. It also pro
vides reasonable
assurance against ma
terial
misstatem
ent and
mitiga
tes
poten
tial
los
ses t
hat coul
d aris
e in the or
dinar
y co
urse
. Eac
h busin
ess
mon
itors i
ts most i
mpor
ta
nt risk
s and ta
kes acti
on to addr
ess
issues. Our annual conﬁrmation
exercise
checks that
ke
y risks
are we
ll mana
ged, o
r actio
ns are in p
lace to ad
dres
s gap
s, at
each business
.
Bu
sines
s cont
inuit
y plan
ning is e
mbed
ded in ou
r fram
ework
.
Our principal risks
include cont
rols fo
r responding
to
problems
wit
hin thei
r risk p
lans
. W
e als
o have busin
ess c
ontinu
ity pl
annin
g
for ou
r criti
cal p
roce
sse
s, so we c
an co
ntinue bu
sine
ss
ope
ratio
ns in the even
t of a cris
is.
Chan
ges to our risks fo
r 2022
In o
ur Novemb
er 202
1 annu
al ris
k review, the RO
CC agr
eed
our principal
risks for
20
22
which remain
largely unchanged,
wit
h the evolut
ion of P
rivacy to D
ata Ethi
cs and P
rivac
y
, Non-
Promotional
Engagement
to
Scientiﬁc an
d Pa
tient
Engagement,
and T
ransformation and
Separation t
o Separat
ion. Additional
ly
,
we a
greed t
hat
Envir
onmental
Sustainabil
ity will
be mana
ged
und
er our ES
G area
s of focu
s. Al
so we ide
ntiﬁe
d two new
emerging
risks, Geopolitical T
ensions
and Healthcare R
eform,
whi
ch will b
e evaluate
d durin
g 202
2 befo
re bei
ng cla
ssi
ﬁed a
s
principal risks.
Th
e table o
n the foll
owing p
ages sh
ows our cu
rrent p
rinci
pal
risks and respective
trends, assessments and mitiga
tion
act
iviti
es for th
e year. Thes
e are not i
n order o
f signi
ﬁca
nce.
For f
ull ris
k deﬁn
ition
s, poten
tial im
pact
, contex
t and m
itigat
ing
act
iviti
es ple
ase s
ee Principal risks and uncertainties on
pag
es 27
5 to 28
7
.
V
iability statement, see page 53. Risks associated with
COVI
D-19, see page 54. AR
C report, see page 111.
Internal control framework, see page 112.
GS
K Ann
ual R
epor
t 2021
47
Strategic report
Governance and remuneration
Financial statements
Investor information
Risk
Tr
e
n
d
Assessment and mitigation activities
Patient sa
fety
Th
e macro r
isk level i
s sta
ble but r
emain
s chall
engin
g. Pub
lic aware
nes
s of drug s
afet
y has in
crea
sed
foll
owing me
dia cove
rage of t
he safet
y and e
fﬁ
cacy o
f COVI
D-
1
9 vac
cine
s and the
rapi
es in 2021
.
Misinformation
and negat
ive charact
erisations o
f the
industry hav
e fuelled
vaccine hesitancy
. Highly
publicised inf
ormation security th
reats and
data breaches requ
ire us
to
consider how
we
securely
collect safety info
rmation from
external sources.
GS
K’s ris
k expos
ure is st
able
. Our po
rt
folio i
s evolvi
ng, wi
th a greate
r focus o
n advanc
ed the
rapy
medicinal products
that
may
require specialised
pharmacovigilance. W
e need to carefully
balance
re
sourc
es to exec
ute routi
ne phar
macov
igila
nce wh
ile we man
age cha
nge ini
tiative
s incl
uding th
e
sep
arati
on of the C
onsu
mer He
althc
are b
usine
ss, t
he acc
eler
ated pac
e of drug d
evelopm
ent and t
he
sim
pliﬁ
catio
n of our s
afety p
roce
sse
s.
Product quality
Th
e macro r
isk ha
s incre
ase
d follow
ing COV
ID
-
1
9, with r
egulato
rs re
suming m
ultipl
e on-si
te inspe
ctio
ns
to che
ck that pr
oduc
t quali
ty exp
ecta
tions ar
e met. T
here c
ontinu
es to be a foc
us on dat
a govern
ance
and d
ata integ
rit
y requi
reme
nts, an
d on evalu
ation of p
roduc
ts for the p
rese
nce of ni
tros
amine
s.
GS
K's r
isk exp
osure h
as inc
rea
sed, a
s we need to r
espo
nd to the he
ightene
d inspe
ctora
t
e pre
senc
e.
We have launc
hed ins
pect
ion re
adine
ss pro
gram
mes to ens
ure ful
l prepa
redn
ess
. W
e have con
tinued to
inves
t in tech
nolog
y and digi
tal pl
atfo
rms to fur
the
r stre
ngthen o
ur cont
rols ar
ound go
od data m
anage
ment
pr
actic
es. G
overna
nce an
d contr
ol str
ategies h
ave been d
eployed f
or timel
y nitro
sami
ne evalua
tions
. All
these mitigat
ions will
require
focus and
diligence
as GSK undergoes signiﬁcant organisational
change.
Financial
controls
and report
ing
Th
e exter
nal env
ironm
ent rem
ains ch
allen
ging due to p
oliti
cal un
cer
tai
nty, prop
osed i
ncrea
ses i
n the
obligations
of d
irectors and
auditors, increasing t
hreats of
cyber a
ttacks (informat
ion security
) and
fraud,
and increasing
environ
mental di
sclosure requ
irements.
GS
K’s ris
k expos
ure ha
s remai
ned st
able d
ue to our ong
oing foc
us on the r
esili
ence o
f pers
onnel a
nd
the te
sting of o
ur inter
nal co
ntrol fr
amewor
k. We impl
ement o
ptima
l risk mi
tigati
on thro
ugh
transforma
tional
programmes, t
echnol
ogy
,
centralised
processes, and risk
and
control
assessments,
and m
ainta
in ef
fect
ive ta
x and tr
eas
ury s
trateg
ies
. W
e conti
nuall
y stren
gthen o
ur cont
rol fra
mework
s
and colla
borat
e with
external
bodies on
standard
setting.
Ant
i-brib
ery
and corruptio
n
(
AB
AC)
Th
e macro r
isk level f
or brib
er
y and co
rrup
tion re
maine
d uncha
nged in 2021
. W
e cont
inued to se
e the
ongoing impact o
f the pandemic
on go
vernments, people and
businesses; rigorous anti-bribery and
co
rrupti
on sta
ndar
ds aid
ed by impr
oved tech
nolog
y; and co
ntinue
d enforc
emen
t with foc
us on thi
rd-
part
y i
ntermediaries.
GS
K’s ris
k expos
ure is un
chang
ed as we c
ontinu
ously i
mprove ou
r Anti Br
iber
y an
d Cor
rupti
on
programme to
ensure appropriat
e controls, training, capability building, a
wareness raising, strong
mon
itorin
g and use o
f data an
aly
tic
s.
Commercial
practices
COV
ID
-
1
9 cons
equen
ces c
ontinu
e to impac
t the mac
ro level. C
omp
etitive p
res
sure ha
s incr
eas
ed in
many t
herapy a
rea
s and ma
rket seg
ments
. Futur
e innovati
on requ
ires s
ucce
ssf
ul laun
ches of key
med
icine
s and pr
oduct
s. Vaccin
ation r
ates have be
en impa
cted by ac
ces
sibili
ty an
d polit
ical i
ssu
es.
Gove
rnmen
ts rema
in focu
sed on i
nitiati
ves to dri
ve medi
cine an
d vaccin
e cos
ts down for c
onsu
mers
.
GS
K’s ris
k expos
ure level r
emai
ns stab
le due to ou
r mature a
nd robus
t cont
rol envi
ronme
nt. We conti
nue
to evolve o
ur comm
erci
al prac
tice
s com
petiti
vely. W
e have inves
ted in new tec
hnolo
gies th
at supp
ort
vir
t
ual customer
engagement. W
e
maintain proportionate controls, training
and monit
oring for
employees
that en
gage with
healthcare organisations
and prof
essionals. We
train senior
business leaders on
delivering
per
f
ormance and manag
ing risk.
Non-
promotional
engagement
The macro
environ
ment f
or non
-promotion
al activit
ies and scien
tiﬁc engagemen
t with
HCPs and
pati
ents is s
tabl
e. It c
ontinue
s to be cha
racte
rise
d by comp
lex, dy
nami
c dise
ase ar
eas a
nd trea
tments
with increased pa
tient
-cent
ric focus,
increasing div
ersity of engagem
ent pla
tforms, and the
contin
ued
increase in virtual en
gagements
since th
e pandemic.
GS
K’s ris
k expos
ure ha
s remai
ned st
able
. Our dig
ital p
racti
ces c
ontinu
ed to develo
p and mo
derni
se, an
d
we have ap
plied o
ur inter
nal pri
ncipl
es and p
olici
es, d
esig
ned to miti
gate ris
k, to thi
s rapi
dly evolv
ing
envi
ronme
nt. We have intern
al net
works to fo
ster co
llab
oratio
n and be
st pra
ctic
e shar
ing, a
s well as th
e
identiﬁcation of
emerging risks
associated with
non-promotio
nal activities, so w
e can conduct
them in
co
mplia
nce wi
th GSK
’s values a
nd poli
cies
, loc
al laws a
nd regu
lation
s.
Risk managemen
t
continue
d
202
1 Princi
pal ris
ks summary
48
GS
K Ann
ual R
epor
t 2021
Risk
Tr
e
n
d
Assessment and mitigation activities
Privacy
Th
e macro r
isk co
ntinue
s to incre
ase
, with pr
iori
ty GS
K mar
kets suc
h as the U
K, E
U, US, C
hina an
d
In
dia ins
titutin
g new pri
vacy laws
, and co
ur
t ruling
s invalid
ating e
stab
lishe
d intern
ationa
l data tr
ansfe
r
mechanisms tha
t int
ernational
companies had rel
ied on. The
increasing trend f
or data
sov
ereignty
ini
tiall
y targ
eting tec
h comp
anies c
ould af
fec
t hea
lthca
re com
pani
es in the
ir abili
ty to dr
ive medi
cal
innov
ation
and t
o effectively operat
e in
ternat
ionally
.
GS
K’s ris
k expos
ure is in
crea
sing d
ue to the imp
act of the u
nsta
ble pr
ivacy re
gulator
y env
ironm
ent
preve
nting us f
rom fur
th
er sta
ndard
ising o
ur pri
vacy fra
mework g
lobal
ly and du
e to the sc
ale of the
cha
nges n
eces
sar
y to pr
epar
e for the cr
eatio
n of two new d
ata-dr
iven c
ompan
ies
.
Research
practices
Th
e macro r
isk level i
s unch
anged
. W
e always n
eed to co
ntinua
lly as
ses
s how we do R&
D in the co
ntex
t
of our f
uture a
mbiti
on, our b
enchm
arks
, and th
e evolvin
g globa
l regul
ations a
nd qua
lity s
tand
ards
. Thi
s is
par
t
icularly vital when
expectations
change or
there are
country-speciﬁ
c
requirements
(Human
Genetic
Resources Administrat
ion of
China, Schrems II).
GSK’s risk e
xposure is u
nchanged, as la
ws and
regulation
s are cont
inually e
volving.
When regulat
ions
cha
nge, th
e acco
untab
le R&D f
uncti
on develo
ps an ac
tion pl
an whic
h can i
nclud
e risk a
nd impa
ct
as
ses
smen
ts to determ
ine how th
e interna
l cont
rol fra
mework n
eeds to ch
ange to me
et the new
requirements. R&D
regularly scans the
external en
vironment t
hrough mem
bership of pro
fessional
org
anis
ations a
nd con
sor
tiums
, atte
ndanc
e at indu
str
y or agen
cy-sp
onsor
ed mee
tings a
nd review o
f
publicly
posted reg
ulat
ory/legal reports.
Environme
nt
,
healt
h and
safet
y
(E
H
S)
Th
e macro r
isk level i
s unch
anged a
s COV
ID
-
1
9 p
rotoco
ls have be
en embe
dded i
n our ways of
work
ing
. Site st
afﬁ
ng has m
oved fro
m ess
entia
l worker
s only to mo
stly fu
ll staf
ﬁn
g. Thi
s has me
ant we
have be
en abl
e t
o re
sume mo
re cons
istent m
anage
ment over
sigh
t and on-
site glo
bal sup
por
t thro
ugh
senior leaders, subject ma
tter experts and audit
teams.
GS
K’s ris
k expos
ure ha
s levelle
d out due to c
onsis
tent work p
ract
ices r
elated to C
OVI
D-
1
9 co
ntrol
me
asur
es. H
owever
, orga
nisat
ional c
hang
e conti
nues to be a f
actor
. We have plac
ed con
tinued fo
cus
on s
afety l
eade
rshi
p train
ing, em
bedd
ing our Li
fe Savin
g Rule
s, and a
dheri
ng to our EH
S stan
dards
.
Environme
ntal
sust
ainabilit
y
Th
e macro r
isk level c
ontin
ues to inc
rea
se. Inve
stors
, reg
ulators a
nd othe
r stake
holde
rs exp
ect
co
mpani
es to unde
rst
and and a
ctivel
y redu
ce the env
ironm
ental f
ootpr
int of thei
r oper
ations a
cros
s their
valu
e chain
, and to mi
tigate the i
mpact
s climate c
hange c
ould h
a
ve on the
ir ope
ration
s and sup
ply ch
ains
.
GS
K’s ris
k expos
ure is un
chang
ed. We set am
bitio
us new envi
ronme
ntal su
stai
nabil
ity g
oals at th
e end
of 2020 an
d have est
ablis
hed an e
nterpr
ise tra
nsfor
matio
n progr
amme a
ddre
ssin
g climate
, water
, waste
and b
iodive
rsi
ty acr
oss o
ur oper
ations
. W
e als
o incr
ease
d the sc
ope an
d depth of o
ur T
a
sk For
ce on
Climat
e-related
Financial Disclosures (TCFD
) analysis, and
continued
to m
onitor
trends in
phy
sical,
reputational and
regulat
ory risks from clima
te
change impa
cts.
Information
securit
y
Th
e macro r
isk level c
ontin
ues to ri
se, as l
arge mu
ltinat
ional
s incre
ase t
heir dig
ital fo
otpri
nts and th
reats
fro
m hacker
s bec
ome mor
e soph
istic
ated. R
isks i
denti
ﬁed a
s incre
asi
ng durin
g the pan
demic h
ave
level
led of
f but c
ontinu
e to be an ong
oing thr
eat. At th
e sam
e time, g
overnme
nts are t
ighteni
ng the
reg
ulator
y fra
mework
s, and w
e can ex
pect e
nforc
ement to in
crea
se.
GS
K’s ris
k expos
ure ha
s incre
ase
d. The t
arge
ting of ph
arma
ceuti
cal a
nd vacci
ne intell
ectua
l prop
er
ty,
and of
third-party ser
vice
av
ailability
,
has int
ensiﬁed. In response,
our c
yber security programme
co
ntinue
s to improve ou
r contr
ols to inc
reas
e our cy
ber thr
eat intel
ligenc
e cap
abili
ties a
nd prote
ct
critical informat
ion and s
ystems, in
cluding opera
tional t
echnology and
networks.
Supply
continuity
Th
e macro r
isk level r
emai
ns high du
e to the ong
oing imp
act of th
e pande
mic on p
roduc
t suppl
y
. Ther
e
is al
so con
tinuing p
otentia
l for inc
rea
sing pr
otectio
nism
, and Br
exit unc
er
tain
ty. Our C
O
VI
D Is
sues
Management T
eam is actively
managing
supply risk
and mitiga
tion on
an ongoi
ng basis.
GS
K’s ris
k expos
ure ha
s stab
ilise
d. Our P
rocu
remen
t T
as
k Forc
e, a cro
ss-fu
nctio
nal gro
up from
Procurement an
d Supply
Chain, is
accountable
for t
he ident
iﬁcation and
management
of
poten
tial
bottlenecks in th
e supply
of components.
T
rans
formation
and separat
ion
Th
e macro r
isk level i
s unch
anged a
nd rema
ins ch
allen
ging as we s
et up t
wo new comp
anie
s in a high
ly
co
mpetit
ive ex
terna
l labou
r market
.
GSK’s risk e
xposure lev
el remain
s unchanged. Our
transformat
ion and separat
ion projects
hav
e
pro
gres
sed a
s plan
ned thro
ughou
t 202
1
, w
ith emp
loyee eng
ageme
nt rema
ining a p
rior
ity.
Risk managemen
t
continue
d
20
21 Prin
cipa
l risks s
umma
ry
co
ntinued
GS
K Ann
ual R
epor
t 2021
49
Strategic report
Governance and remuneration
Financial statements
Investor information
Risk managemen
t
continue
d
Climate
-relate
d ﬁnancial disclosure
GSK climat
e-related
disclosures are consist
ent wit
h the
recommendations an
d recommended disclosures
of the
T
ask
Force on Clima
te-relat
ed Financial
Disclosures (TCFD)
, and
in
co
mplia
nce wi
th the req
uirem
ents of L
R 9.8.
6R (UK l
isting r
ules).
GSK has been reporting on clima
te-relat
ed ﬁnancial
disclosures
in ac
cord
ance w
ith the TC
FD rec
omme
ndatio
ns sinc
e 20
1
9
,
wit
h the pur
pose of b
uildi
ng trus
t and co
nnect
ing both o
ur
str
ategic a
nd ﬁnan
cial di
sclo
sure
s to climate c
hange
. In 202
1
,
we have exp
ande
d discl
osur
e by under
ta
king a m
ore det
aile
d
revi
ew of GS
K’s manu
factur
ing ope
ratio
ns and ou
r inhal
er
por
t
folio, w
hich i
s the lar
gest c
ontri
butor to GS
K’s cur
rent
ca
rbon fo
otpri
nt withi
n our por
t
folio o
f medic
ines
, vacci
nes
and consumer pr
oducts. GSK’s carbon reduction
path
wa
y t
o
be
come ne
t zero by 203
0 can be f
ound
here
1
on gsk.com
.
We will co
ntinue to evo
lve our fu
ture cli
mate-re
lated di
sclo
sures
by buil
ding fu
rth
er clim
ate risk a
sse
ssm
ents into ou
r exte
rnal
supply chain.
Gove
rna
nc
e
Environm
ental sustainabi
lity
, which
includes cl
imat
e chang
e,
was a
sse
sse
d as a pr
incip
al ris
k at GSK i
n 202
1
. T
he Boa
rd
ha
s overall a
ccou
ntab
ilit
y for the ma
nagem
ent of GS
K’s
principal risks, with
support from the GL
T
.
The Board-lev
el Corporat
e Responsi
bility Committee (
CRC
)
ove
rsees the en
vironmental
sustainability prin
cipal risk
and
progress against en
vironmental target
s with Non-Executive
Dir
ector, L
ynn E
lsenh
ans as c
hair. See th
e CRC re
por
t on pag
e
1
04. Ou
r Risk O
vers
ight an
d Com
plian
ce Co
uncil (R
OCC)
hel
ps the C
RC to overs
ee the ri
sks
, and the s
trategi
es use
d to
add
res
s them thr
ough qu
arte
rly re
por
ting
. Refer to pa
ge 94 for
further details of t
he Board and
Board committee
’
s archit
ecture.
Regis Simard,
President, Pharmaceuticals
Supply Chain
and
GL
T
member h
as management
responsibil
ity for en
vironmen
tal
sustainability
, which in
cludes climat
e chan
ge. He is
responsible
for gove
rnan
ce and ove
rsig
ht of ris
ks and op
por
tunit
ies an
d
ens
ures th
ere is a
n eff
ective f
ramewo
rk in pl
ace to ide
ntif
y and
man
age the r
isks a
nd oppo
rtu
nitie
s acros
s eac
h of our bus
ines
s
uni
ts alon
g with de
liveri
ng on the c
ommit
ments m
ade to have a
net zer
o impac
t on cli
mate and a net p
osit
ive impa
ct on natu
re by
203
0. Refer to p
age 46 for th
e detai
led ri
sk man
ageme
nt plan
.
Established, special
ised t
eams acr
oss GSK are
working
toget
her to del
iver our e
nviron
menta
l strate
gies a
nd embe
d
the
m as bus
ines
s as usu
al inc
luding:
–
The GSK Sustainability Council
chaired b
y Reg
is Simard
whi
ch incl
udes l
eade
rs fro
m busin
ess un
its and g
loba
l
functions, including manufacturing, R&D, procurement and
facilities management, ethics and compliance and ﬁnance,
who a
ll play a key ro
le in del
iveri
ng our envi
ronme
ntal s
trategy.
Th
e Coun
cil is su
ppor
ted by a de
dicate
d Prog
ramm
e Steeri
ng
T
e
am, w
hich i
s run by the G
loba
l Sust
ainab
ilit
y T
ea
m who al
so
provide
specialist
expertise and
advice t
o
the b
usiness.
–
The Programme Steering T
eam who co-ordinat
e the
sustainabil
ity programme
and associat
ed w
orkstreams
and
have over
sight f
or moni
t
ori
ng per
for
manc
e and pro
gres
s of
the enablers t
o del
iver t
he sustainability programme.
–
Th
e Capit
al Al
locat
ions Bo
ard (CAB) whi
ch incl
udes th
e
CF
O and G
roup Fi
nanci
al Co
ntroll
er who r
eview cli
mate-
rel
ated ca
pita
l expen
diture a
s par
t of the
ir annu
al pla
nning
and capital all
ocation process.
–
The Finance Sustainabilit
y Network includes leaders from
across Finance, Sustain
ability and
Procurement an
d focuses
on key ﬁn
anci
al enab
ler
s t
o del
iver the s
usta
inabi
lity
programme.
Str
ategy and Risk M
anageme
nt
Methodo
logy and
Assumptio
ns
Sin
ce 20
1
9 we have disc
losed l
ong-ter
m risk
s from cl
imate
cha
nge acr
oss th
e value ch
ains of key p
roduc
ts that ac
coun
t
for a
pproxi
mately 40
% of reven
ue. In 2021
, we expan
ded our
as
ses
smen
ts with a fo
cus on r
isks to our o
wn manu
factu
ring
ope
ratio
ns and we have d
evelope
d a three
-year p
lan to fur
th
er
embed climat
e-relat
ed analysis
across signiﬁcant areas of ou
r
business
.
W
e used
two cl
imat
e scenari
os based on
int
ernat
ionally
recognised d
ata se
ts
2
:
–
bus
ines
s-as
-usu
al (BAU): as
sumin
g litt
le to no miti
gation
le
ading to 3-
5°C o
f warmi
ng by 2
1
0
0.
–
low-carbon future
: assumes that t
he global t
emperature
inc
rea
se by 2
1
0
0 is lim
ited to well b
elow 2
°C by ra
pid
changes in legisla
tion and
techno
logy
.
Dur
ing 2021
, us
ing the e
nterpr
ise ri
sk pla
n we car
ried ou
t
scenario analyses on t
he risks and
opportunities, prioritising
physical
and transit
ional risks
and oppo
rtunities according
to
the li
keliho
od and th
e magnit
ude of the p
otentia
l impac
t to
GSK’s m
anufactu
ring o
peration
s and
staff.
Ea
ch ris
k and opp
or
tunit
y was an
alyse
d and the p
otentia
l
imp
act on ou
r proﬁ
t was cla
ssi
ﬁed a
s eith
er low (
<£
1
0
0 milli
on
),
med
ium (£
1
0
0 milli
on-
£3
00 mill
ion) or high (
>£30
0 milli
on
).
W
e consider
climat
e-related
issues within t
he time
horizons
use
d in our s
trategi
c and ca
pita
l plann
ing pro
ces
ses: sho
rt-term
(le
ss tha
n 1
2 mont
hs
); medium
-term (
1-3 year
s
); and lon
g-term
(3-
1
0 year
s
). W
e have foc
used on c
limate r
isks ou
t to 2030,
wit
h no materi
al ris
ks ide
ntiﬁ
ed as fa
lling in
to shor
t or me
dium
term.
We have tested t
he res
ilienc
e of GS
K’s clim
ate-rel
ated str
ategy
taking into
consideration
different scenarios and the
risks and
opp
or
tuniti
es ide
ntiﬁe
d. As a r
esult
, we are c
ontinui
ng to
improv
e our
management o
f clima
te-relat
ed risks
and
opportunities.
1
https:/
/www.gsk.com/med
ia/71
80/
gsk
-ca
rbo
n-gl
idepa
th
-01
09
2
1.pdf
2
Sce
na
rios a
re ba
se
d on IPP
C Repr
ese
ntative C
oncent
rati
on Pathway
s 2.6
,
4.
5 and 8
.5, th
e IEA World E
ner
gy O
utloo
k 2018 New Policy S
cen
ar
io,
Cu
rr
ent Polic
y Scen
ar
io and Su
stain
able De
velop
ment S
cen
ar
io; and d
ata
se
ts fr
om W
WF a
nd WR
I for wat
er st
res
s and ﬂoo
d ri
sk mod
elling
50
GS
K Ann
ual R
epor
t 2021
Summ
ary of GS
K’s risks and op
por
tunitie
s
Risk managemen
t
continue
d
Physical risk/
description
S
cenario
Risk mana
gement
Potential
proﬁt impact/
timeframe
Metri
cs
Ta
r
g
e
t
s
Increasing lev
els
of water
stress
which
reduces
the
avail
abil
it
y of wate
r
for our
operations.
GSK uses freshwat
er
as t
he mai
n sour
ce of
water to manufac
ture
medicines, vaccines,
and consumer
health
products.
If w
ater avai
labi
lit
y was
restricted
at
a
facto
ry
then production
operations w
ould be
inte
rrup
ted.
BAU
an
d low
carbon
We have pe
rfo
rme
d water s
teward
ship r
isk
as
ses
sme
nts fo
r all our m
anu
factu
ring s
ites
an
d we have ide
nti
ﬁed ten s
ites i
n our cu
rren
t
net
wor
k that ar
e cur
rentl
y in ar
eas o
f high
-water
risk.
We are d
evelop
ing pl
ans fo
r thes
e site
s to
be
come w
ater neu
tra
l by 2030 a
nd wil
l par
tne
r
with ot
her organisat
ions t
o add
ress shared
wat
er challen
ges. W
e are
currently
pilotin
g this
ap
proa
ch in ou
r Cape Town si
te work
ing wi
th
pa
rtn
ers i
nclu
ding W
WF a
nd the Wate
r
Resilience Coalition.
Th
e TCFD p
roc
ess h
as he
lped u
s devel
op a
wat
ch list
of a
dditional
sites po
tent
ially under
lo
ng-ter
m thre
at and we w
ill mo
nitor c
hang
es to
the r
isk l
evels a
nd upd
ate our si
te water r
isk
asses
sments
appropriat
ely
.
Low:
<£
10
0
m
/
Lo
ng:
3
-1
0
y
e
a
r
s
Si
tes tha
t have
achieve
d
water
stew
ardship
*
Water us
e in
our operations
Sites
and
supplier sit
es
that ha
ve
achieve
d
water
neutrali
ty
Achiev
e good
water stewards
hip
at 1
00
% of our
site
s by
2025
Red
uce overa
ll
wate
r use in o
ur
operations b
y
20% by 203
0
Be wa
ter neu
tral i
n
our o
wn
operations and
at
key
suppliers in
water stres
sed
re
gion
s by 2030
Increasing frequency
of ex
tre
me wea
the
r
events causing
disruption
.
E
xtreme weather
even
ts suc
h as
ﬂooding,
st
orms e
tc
ca
n res
ult in s
hor
t-term
interruption
s
to
manufacturing and
other operat
ions.
BAU
an
d low
carbon
We have pe
rfo
rme
d ris
k ass
ess
ment
s for ou
r
manufacturing and
other
operations
and ha
ve
bus
ine
ss co
ntinu
ity p
lans i
n plac
e whi
ch are
rev
iewed a
nnua
lly to re
spo
nd to the i
mpac
t of
extr
eme w
eather events including adopting
appropriate
mitigation
plans.
Th
e TCFD p
roc
ess h
as he
lped u
s iden
tif
y a
watc
h list o
f sites t
hat ar
e in pla
ces w
here t
he
ﬂo
od ris
k is exp
ecte
d to inc
rea
se over ti
me.
How
ever, the ri
sk fro
m ﬂood
ing re
main
s ver
y
low. GS
K has a w
ell-
est
abli
she
d loss
preven
tion and
risk eng
ineering pr
ogramme t
o
id
entif
y a ra
nge of r
isk
s that c
ould im
pac
t our
si
tes and w
her
e ﬂood r
isk
s exis
t, we have t
aken
ac
tion to mi
tig
ate the ri
sk
.
Low:
<£
10
0
m
/
Lo
ng:
3
-1
0
y
e
a
r
s
Si
tes tha
t
have
business
continuit
y
plans
1
00
% of sit
es
hav
e a
response
to
extreme
weather events
in their
business
continuit
y plans
An i
ncre
ased n
umbe
r
of ver
y ho
t days
(
>
3
5°
C
) resulting in
reduced
productivity.
E
xt
reme h
eat co
uld
re
sult i
n heat s
tres
s
af
fecting our staf
f
.
BAU
GS
K ha
s oper
atio
ns in co
untr
ies th
at alr
eady
experience v
ery hot t
emperatures
periodically
.
We alre
ady c
ontr
ol the te
mper
atur
e and
hum
idit
y ins
ide ou
r buil
ding
s. As p
ar
t of our
EH
S cont
rol fr
amewo
rk
, site
s cond
uct r
isk
as
ses
sme
nts on ve
ry h
ot days i
nclu
ding
adaptations
for outside
work.
Low:
<£
10
0
m
/
Lo
ng:
3
-1
0
y
e
a
r
s
Sc
ope 1, 2
and 3
carbon
emissions
Ne
t zero
emissions across
all operations
by
2030
Ne
t zero
emissions across
our f
ull va
lue ch
ain
by 2030)
Risk Management
A speciﬁc and
dedicated
envi
ronmental
sustainability ent
erprise
ris
k mana
gemen
t plan ha
s bee
n put in pl
ace (for more d
etai
ls
se
e Risk m
anage
ment on p
age 46). The ri
sk mana
geme
nt plan
cove
rs exp
ectat
ions tha
t GSK is a
ddre
ssin
g its imp
act on th
e
environm
ent, and
that
the
environ
ment has
increasing impact
s
on operational
resilience such
as access to energy
, water
and t
he natur
al res
ource
s use
d in prod
ucts
, along w
ith any
anticipat
ed cost increases from
regulat
ory changes or
environm
ental taxes.
An i
nterna
l contr
ol fra
mework ha
s bee
n esta
blis
hed for
environm
ental sustainabi
lity
, incl
uding t
he appoin
tment
of
dedicated
senior
leaders for
environ
mental sustainab
ility to
ens
ure that g
overna
nce pro
ces
ses a
re in pla
ce and e
ffe
ctive.
Our performance in reducing carbon emissions, energy
and
water ut
ilisa
tion, a
nd was
t
e wil
l conti
nue to be del
ivere
d and
man
aged by ou
r mature p
rogra
mmes a
nd will b
e enha
nced by
including
further eco-design considerations int
o products
and
packaging
.
*
As d
eﬁne
d by the A
llianc
e for W
ater S
tewa
rd
ship
GS
K Ann
ual R
epor
t 2021
51
Strategic report
Governance and remuneration
Financial statements
Investor information
T
ransitional risk/
description
S
cenario
How t
he ris
k is ma
nage
d
Potential
proﬁt impact/
timeframe
Metri
cs
Ta
r
g
e
t
s
Regulatio
ns
gove
rning t
he use o
f
high global w
arming
potential (
GWP
)
sub
sta
nce
s are be
ing
up
date
d in the U
K
,
EU a
nd US
.
Th
is cou
ld le
ad to
increasing cost and
re
stri
ctio
ns on th
e use
of th
e high GW
P
propellant (
HFA
1
34a
)
in ou
r Mete
red D
ose
Inhaler (MDI) products.
BAU
an
d low
carbon
We have st
ar
ted an R&
D pro
gra
mme to ﬁn
d a
lower
-impact
propellant tha
t could
reduce
emissions from our
met
ered dose in
halers by
about 90%.
We alre
ady h
ave a por
tf
olio o
f Dr
y Powde
r
Inhaler products t
hat do
not
use propellants
tha
t are not i
mpa
cted by th
is ris
k.
We are m
onito
ring th
e evolv
ing re
gula
tions
gove
rnin
g the us
e of ﬂuo
rina
ted ga
ses a
nd wil
l
review
our
assess
men
ts in
future
declarations.
Medium:
£10
0
m
to
£300
m/
Lo
ng:
3
-1
0
y
e
a
r
s
Sc
ope 3
carbon
emissions
Ne
t zero
emissions across
all operations
by
2030
Ne
t zero
emissions across
our f
ull va
lue ch
ain
by 2030)
There is
uncertaint
y
over f
utur
e regu
lato
ry
policy responses to
address climate
change that countries
aro
und th
e world w
ill
develop
including
carbon pri
cing.
We
anticipate that
carbon pricing on
operational carbon
emissions will
come
into f
orce i
n som
e
re
gion
s in the me
dium
to lo
ng term w
hich
could increase our
operating costs
.
Low carbon
W
e are
transitioning
to
1
00
%
renewable
el
ectr
icit
y by 2025 a
nd are s
tar
tin
g to
investigat
e op
tions f
or renew
able heat
technology
to
reduce ou
r carbon emissions
from energy
.
Ou
r sal
es ﬂe
et aim to tr
ans
itio
n to elec
tri
c
veh
icle
s by 203
0, fur
the
r redu
cing o
ur sc
ope 1
carbon emissions.
Shadow
carbon pricin
g has
been embedded
in
the c
api
tal i
nvest
ment pr
oce
ss at $1
00 p
er
tonn
e and i
s driv
ing co
nver
sati
ons an
d
decisions around
carbon emissions at
all le
vels
of the organisatio
n.
Low:
<£
10
0
m
/
Lo
ng:
3
-1
0
y
e
a
r
s
S
c
o
p
e
1&
2
carbon
emissions
Ne
t zero
emissions across
all operations
by
2030
Opportunities
Scenario
How t
he op
por
tun
it
y is man
age
d
Potential
proﬁt impact/
timeframe
Metri
cs
Ta
r
g
e
t
s
At C
OP2
6 in
Nove
mber 2
021,
mor
e tha
n 50
countries around
the world
committed
to pr
ovide l
ow carb
on
healthc
are
systems.
Th
is cou
ld le
ad to
increasing demand
for
low c
arb
on vac
cine
s
and medicines.
BAU a
nd
low
carbon
We are r
educ
ing ou
r own sc
ope 1 & 2 c
arb
on
emi
ssi
ons w
hich i
n turn r
educ
es the s
cop
e 3
footprint
of our
customers
and suppliers.
We have st
ar
ted a new E
co-
des
ign pr
ogra
mme
to re
duce t
he imp
acts o
f all ou
r prod
ucts a
nd
packaging
.
GS
K have ce
rt
iﬁe
d and pu
blis
hed th
e car
bon
foo
tpri
nts of ou
r por
tf
olio o
f resp
irato
ry i
nhal
ers
an
d have lau
nche
d our ﬁr
st c
arbo
n neut
ral
inh
ale
r in the U
K. T
his e
nabl
es he
alth
car
e
providers and
patien
ts mak
e inf
ormed choices.
We have st
ar
ted an R&
D pro
gra
mme to ﬁn
d a
lower
-impact
propellant th
at could
reduce
emissions from our
met
ered dose in
halers by
about 90%.
Low:
<£
10
0
m
/
Lo
ng:
3
-1
0
y
e
a
r
s
Sc
ope 1, 2
and 3
carbon
emissions
T
otal wast
e
and non-
circular waste
Ne
t zero
emissions across
our f
ull va
lue ch
ain
by 2030
Zero operational
waste, including
eliminating
single-use plastics
by 2030
25%
environmen
tal
impact reduction
for o
ur pro
duct
s
an
d pack
agin
g by
2030
10
%
w
a
s
te
reduction from
supply chain
by
2030
Risk managemen
t
continue
d
52
GS
K Ann
ual R
epor
t 2021
Risk managemen
t
continue
d
Energy and carbon emission
s
Ca
rbon emissions
1,
2
Carbon emissions ‘000 tonnes C
O
2
e
2021
2020
20
19
Scope 1 emissions
(
from energy
)
393
415
416
Sc
ope 1 em
issi
ons (other
3
)
288
349
382
Scope 2 emissions
(
marke
t
-based)
15
9
2
27
518
Scope 3 emissions
4
Available in 2022 r
eport
13,427
14,260
UK S
cop
e 1 & 2 emis
sion
s
13
0
141
195
Energy
2021
2020
20
19
Sc
ope 1 an
d 2 emis
sion
s from e
nerg
y/
sal
es reven
ue (
tonne
s CO
2
e
/£
m)
1
5.1
18.8
2
7.
7
Sc
ope 1 an
d 2 emis
sion
s from e
nerg
y/F
TE (tonne
s CO
2
e/F
TE)
6.1
6.8
9.4
T
otal en
ergy u
sed (GWh)
3,596
3,85
8
4
,
079
UK e
nerg
y use
d (
GWh)
850
945
97
5
1
Ca
rbo
n emis
sions a
re c
alcu
late
d accor
ding to the G
reen
hous
e Gas P
roto
col: A Co
rp
orate A
ccountin
g and Re
por
ting S
tand
ar
d (revi
sed e
dition). G
SK us
es
ma
rke
t
-ba
sed S
cope 2 e
missio
ns for r
epor
tin
g pur
po
ses an
d rep
ort
s Sco
pe 3 emi
ssion
s ac
ross a
ll 15 c
ategor
ies in ou
r ES
G Per
for
manc
e Rep
ort
. We ask
ex
ter
n
al a
ssu
rance p
rov
ider
s, DN
V
, to pro
vide limite
d as
sur
ance to IS
AE 3
00
0 for en
erg
y
, Sco
pe 1, 2 and s
elec
ted Sc
ope 3 ca
rb
on emis
sion d
ata
.
Met
hodolo
gies f
or rep
ortin
g and me
asu
rem
ents a
re pr
ovid
ed in ou
r ESG P
er
form
ance R
epor
t
, on the K
PI deﬁnit
ions p
age
2
GS
K ask
s DN
V to pro
vide limite
d as
sur
ance to I
SA
E 300
0 for en
erg
y
, Sco
pe 1, 2 and s
elec
ted Sc
ope 3 c
arb
on emi
ssion
s, wat
er, was
te and wa
ste
water d
ata
.
Met
hodolo
gies f
or rep
ortin
g and me
asu
rem
ents a
re pr
ovid
ed in ou
r ESG P
er
form
ance R
epor
t
, on the K
PI deﬁnit
ions p
age
s
3
"O
ther
" refe
rs to e
missio
ns fr
om sa
les for
ce vehicl
es, pr
ope
llant e
missi
ons re
lea
sed du
rin
g manu
fact
ure o
f inha
lers
, on-sit
e was
te, or wa
ste
water t
reat
ment
and r
efr
ige
rant ga
s los
ses
4
We colle
ct and p
ublish sco
pe 3 da
ta ac
ross 1
5 catego
ries
. T
he most r
ecen
t scop
e 3 data a
vaila
ble is for 20
20 as th
e proce
ss of c
ompiling th
e 2021 dat
a is
not ye
t comple
te. We wil
l publish t
his dat
a once it b
ecom
es avail
able and it w
ill b
e includ
ed in the 20
22 ES
G Per
for
manc
e Rep
ort
Met
rics and t
arget
s
Our c
ommi
tment i
s t
o have a net ze
ro impa
ct on cli
mate and a
net p
ositi
ve impac
t on natur
e by 2030, a
cros
s our valu
e chain
.
Additional de
tails on t
he targets
and carbon reduction
glidepath
that c
ontri
bute to the
se goal
s are avail
able o
n
gsk.com
. Th
e
Sci
ence B
ase
d T
ar
gets I
nitiati
ve has va
lidated t
hat our ne
ar-
term c
arb
on tar
gets al
ign to a 1
.5°
C pathway
. We are del
iveri
ng
the
se goa
ls by acti
ng on pri
orit
y impa
ct are
as an
d worki
ng with
st
akehol
ders a
cros
s our valu
e chain i
nclud
ing our s
upplie
rs an
d
cus
tomer
s. We are al
so work
ing wi
th ex
ternal p
ar
tner
s such a
s
the W
orld Business Council for
Sustainable Development
and
the U
N W
ater Re
silie
nce C
oaliti
on.
Det
ails o
n the pro
gres
s we are ma
king towa
rds ac
hieving
our c
limate ta
rgets c
an be fo
und on pag
e 39. Add
itiona
l
bac
kground o
n our cli
mate and al
so our na
ture ta
rgets
, the
progress we are
making and t
he approaches w
e are
adopting
to mee
t these t
arge
ts can b
e found in t
he ESG pe
rfo
rman
ce
rep
or
t, and i
n our publ
ic res
ponse
s to the CD
P Clim
ate,
W
at
er and Forest
questionnaires.
Fro
m 202
2, in o
rder to al
ign our a
pproa
ch to clima
t
e and n
ature
ta
rgets w
ith the re
muner
ation of o
ur E
xecuti
ve Dire
ctors a
nd
sen
ior exec
utive
s, we are i
ntrodu
cing a 1
0% E
SG targ
et
measure initially i
nto
both
our short-
and long-
term
remuneration
inc
entive p
lans
. This w
ill inc
lude se
ttin
g and me
asur
ing sho
rt-
and l
ong-ter
m per
form
ance o
f these p
ar
ticip
ants ag
ainst o
ur
Natu
re Net Po
sitive a
nd Clim
ate Net Ze
ro ambi
tions
. For fu
rth
er
det
ails pl
eas
e see our R
emune
ratio
n repor
t on p
ages 1
1
9 t
o 1
5
2.
GS
K Ann
ual R
epor
t 2021
53
Strategic report
Governance and remuneration
Financial statements
Investor information
Risk managemen
t
continue
d
Viability s
tatement
In a
ccor
danc
e with pr
ovisi
on 3
1 of the 201
8 r
evisi
on of the
Co
de, GS
K has a
ss
ess
ed the pr
ospe
cts of the G
roup ove
r a
lon
ger per
iod th
an the 1
2 m
onths r
equir
ed by the ‘G
oing
Co
ncer
n’ provis
ion. T
he Dir
ector
s conﬁ
rm that t
hey have a
re
ason
able ex
pect
ation th
at GSK w
ill co
ntinue to op
erate an
d
mee
t its lia
biliti
es, a
s they fa
ll due, ove
r the nex
t thre
e year
s. Th
e
Dir
ector
s’ ass
ess
ment ha
s bee
n made wi
th refe
renc
e t
o GS
K’s
current posit
ion and
prospects, our
strat
egy
,
the Board
’
s risk
app
etite an
d GSK
’
s pri
ncipa
l risk
s and how th
ese ar
e manag
ed,
as d
etail
ed on pag
es 46 to 48 in t
he stra
tegic re
por
t.
Th
e Boar
d reviews o
ur inter
nal co
ntrols a
nd ris
k manag
ement
pol
icie
s and app
roves ou
r governa
nce st
ructu
re and c
ode of
co
nduct
. It als
o appr
aise
s and ap
proves m
ajor ﬁ
nanci
ng,
inves
tment a
nd lic
ensin
g decis
ions
, and eval
uates an
d monitor
s
the p
er
forma
nce an
d prosp
ects o
f GSK a
s a whol
e. The fo
cus
is largely on
improvin
g our
long-t
erm ﬁnancial
per
f
ormance
thro
ugh del
iver
y of our c
ompa
ny and thre
e busi
ness s
trategi
es
and ali
gned Inno
va
tion,
Performance and
T
rust priorities.
The Board re
views
GSK’s
strategy
and
makes sig
niﬁcant capital
inves
tment d
ecis
ions over a l
ong-ter
m time hor
izon, b
ase
d on a
mult
i-yea
r ass
ess
ment of r
eturn on c
apit
al, th
e per
form
ance o
f
the c
ompa
ny and thre
e busi
ness u
nits
, and the m
arket
oppor
t
unity in the
pharmaceutical, vaccines and consumer
se
ctors
. This a
ppro
ach is al
igned to G
SK’s mo
del of ac
hievin
g
bal
ance
d grow
th by inves
ting in h
igh-q
ualit
y
, innov
ative
products for pa
tients, consumers and healthcare providers.
Howeve
r
, since m
any inter
nal and e
xter
nal pa
rame
t
er
s beco
me
increasingly unpredictable o
ver
longer ti
me horizon
s, GSK
foc
uses i
ts deta
iled
, botto
m-up Pl
an on a thr
ee-ye
ar cycl
e. The
Pl
an is revi
ewed at le
ast a
nnuall
y by the Di
rector
s, w
ho appr
ove
business f
orecasts sho
wing e
xpected
ﬁnancial
impact. The
Dir
ector
s beli
eve that a thr
ee-ye
ar as
ses
sment p
erio
d for the
Vi
abili
ty st
atement i
s most a
pprop
riate a
s it alig
ns with th
e
Group’
s
well established business planning
processe
s
that
bal
ance t
he long
-t
erm n
ature of i
n
ves
tments i
n the
pharmaceutical,
vaccines
and con
sumer
sectors wi
th an
as
ses
smen
t of the per
iod over w
hich a
nalys
is of nea
r
-term
business performance is realistically visible.
Th
e Plan h
as bee
n stre
ss tes
ted in a ser
ies of r
obust o
pera
tiona
l
and principal
risk do
wnside scenarios
as part of the
Board’
s
review
on risk. These in
clude po
tent
ial risks
associated wit
h the
ong
oing C
O
VI
D-
1
9 p
andem
ic, wh
ich have be
en con
sider
ed
wit
hin both t
he Pla
n and str
ess te
st down
side sc
enar
ios
. The
Pl
an as
sume
s the nex
t sever
al year
s to be cha
lleng
ing for th
e
he
althc
are in
dustr
y wi
th conti
nued un
cer
tai
nty re
lated to the
imp
act of th
e COVI
D-
1
9 pa
ndemi
c on adul
t vacci
nation
s and
continued pressure on
pricing o
f pharmaceuticals. GSK
as
sume
s no pre
mature lo
ss of exc
lusiv
ity f
or key prod
ucts over
the p
erio
d. GS
K also ex
pect
s volume de
mand fo
r its pro
ducts
to
increase, particularly for
Shingrix
, as he
alth
care s
ystems a
re
exp
ected to re
turn to nor
mal fol
lowing d
isru
ption fr
om
governmen
ts’
prioritisation
of COVID-
1
9 v
accination
pro
gram
mes an
d ongoin
g mea
sure
s t
o co
ntain th
e pand
emic
.
The downsid
e scenarios consider
GSK’s
cash ﬂows,
sustainability of
dividends, fun
ding st
rategy
, insurance pro
vision
and r
ecover
y a
s well as ot
her key ﬁna
ncia
l ratio
s over the pe
riod
.
Th
ese met
ric
s have been s
ubjec
t to sensi
tivi
ty an
alysi
s, whi
ch
invol
ves ﬂexi
ng a numb
er of the ma
in as
sumpt
ions und
erly
ing
the fo
reca
sts b
oth indi
vidua
lly and i
n comb
inatio
n, alo
ng with
miti
gating a
ctio
ns that co
uld rea
listi
call
y be take
n to avoid or
red
uce the i
mpac
t or occ
urren
ce of the u
nder
lying r
isk
.
The future
separation of
the
Consumer Healthcare Joint V
enture
wit
h P
ﬁzer, if appr
oved by the B
oard an
d shar
ehold
ers
, is likel
y
to occ
ur with
in the pe
riod c
overed by t
he viab
ilit
y ass
ess
ment
.
Th
e Dire
ctors h
a
ve ther
efore c
onsi
dere
d the abil
ity of t
he Gro
up
to con
tinue in i
ts curr
ent for
m (ie the sc
enar
io in wh
ich the
dem
erge
r does no
t proc
eed) for t
he thre
e-yea
r peri
od endi
ng
3
1 De
cemb
er 202
4 as wel
l as the v
iabil
ity of n
ew GSK i
f the
demerger proceeds as planned.
The fol
lowin
g h
ypothe
tical do
wnside scen
arios ha
ve
been
eval
uat
ed
:
Scenario 1
:
Business performance risks. These include ke
y
per
f
ormance risks, including
low
er sales from ne
w products
;
greater
adverse impact
from generic
competition and
other
co
mpetit
ive laun
ches to ot
her GS
K produ
cts; as we
ll as
possible supply and
manufacturing
challenges.
Scenario 2:
Ex
ternal and
macroeconomic risks. This
scenario
reﬂ
ects i
ncre
menta
l risk
s to the busi
nes
s drive
n by outsi
de
factors, such as
more int
ense competit
ion, increased pricing
pre
ssu
re in both t
he US and E
urope a
s well a
s the poten
tial
imp
act of mate
rial n
egati
ve chang
es in the m
acro
-eco
nomic a
nd
healthcare environment.
Scenario 3:
Principal risks. This scenario includes
a sev
ere
as
ses
smen
t of the pote
ntial lo
ss imp
act fr
om the pr
incip
al ris
ks
related
to
patient
safety
, pr
oduct quality
, su
pply chain
continuity
and e
nviron
menta
l sust
aina
bilit
y as wel
l as anti
-bri
ber
y and
co
rrupti
on and a
ny cons
equent r
egul
atory a
ction
s or ﬁne
s, all o
f
which could fu
ndamentally threa
ten o
ur operation
s. These risks
are managed
throug
h miti
gating
activities
described on pa
ges
27
5 to 28
7
.
Scenario 4
:
Put
option e
xercise. This
scenario ev
aluat
es the
additional
funding
requireme
nts assuming
the
earliest pot
ential
exer
cise of t
he outs
tandi
ng put opt
ion hel
d by our pa
rtn
er in the
HI
V
business
.
Scenario 5
:
Demerger
of the
Consumer Healthcare Joint
V
entur
e (
CH). T
he ﬁnal s
cena
rio fo
cuse
s on the imp
act of th
e CH
dem
erge
r in ear
ly Q3 2022 as we
ll as the d
ownsi
de as
ses
sment
of sc
enar
ios 1 to 4 ap
plied to new G
SK
’
s ca
sh ﬂows
.
Th
e three
-year r
eview al
so make
s cer
tai
n ass
umptio
ns abou
t
the no
rmal l
evel of ca
pita
l recyc
ling likel
y to occu
r and co
nside
rs
whe
ther ad
ditio
nal ﬁna
ncing f
acili
ties wi
ll be re
quired a
nd the
re
spec
tive level o
f fundin
g ﬂexib
ilit
y and he
adroo
m.
Th
e resul
ts of this s
tres
s testi
ng show th
at cer
tai
n comb
inatio
ns
of th
ese h
ypothet
ical scenarios
could
increase fund
ing
demands on GSK and
require
mitigating
changes t
o the
Gr
oup’
s fund
ing str
ategy. However, in light o
f the liqu
idit
y
avail
able to the G
roup a
nd bas
ed on thi
s anal
ysis
, the Dir
ector
s
have a re
ason
able ex
pect
ation t
hat, even un
der the
se mos
t
sever
e stre
ss tes
ts, the G
roup w
ith or wi
thout d
emerg
er will b
e
abl
e to conti
nue in op
eratio
n and me
et its lia
bilit
ies a
s they fall
due ove
r the thre
e-yea
r peri
od of as
ses
sme
nt.
5
4
GS
K Ann
ual R
epor
t 2021
Non-
ﬁnancial infor
mation st
atement
Th
e followi
ng alig
ns to the non
-ﬁnan
cial r
epor
ting r
equir
ement
s cont
ained i
n sect
ions 4
1
4CA and 4
1
4C
B
of the C
omp
anie
s Act 200
6.
De
scrip
tion of t
he bus
iness m
odel
Th
e value we cr
eate
01
Social mat
ters
Global health
35
Health securi
ty
35
Affordability and a
vailabi
lity
36
Employ
ees
Employ
ee engage
ment
3
7
Di
versi
ty 37
Wellbe
ing and d
evelopm
ent
37
Gender pa
y gap
37
Ethi
cs and va
lues
38
Board dive
rsity
83
Human rights
Ethi
cs and va
lues
38
Data and
engagemen
t
39
Third parties
38
Anti
-corrupt
ion
and briber
y
Ethi
cs and va
lues
38
Rep
or
ting and i
nvesti
gating c
once
rns 3
8
Anti-b
riber
y and corrupti
on
4
7
Environme
ntal mat
ters
Ca
rbon
, water and wa
ste
39
Climat
e-related
ﬁnancial disclosure
49
Pol
icy, due di
ligen
ce and ou
tcom
es
Sum
mar
y of our p
rinci
pal ri
sks
4
7
Principal risks and uncer
tainties
2
7
5
Viability stat
ement
5
3
Audit &
Risk Committee report
111
Non-ﬁnancial k
ey
performance
indic
ators
Key per
for
manc
e indi
cators
1
2
Our policie
s
All o
f our pub
lic poli
cies
, cod
es and
standards are a
v
ailable on
gsk.com
Risk managemen
t
continue
d
Employ
ees b
y gender
Male
Female
T
otal
Board
8
5
13
Management*
1
0,148
9,553
19
,7
0
1
All e
mployee
s
4
7
,
751
42,3
45
90,
096
*
Se
nior man
age
rs a
s deﬁn
ed in the Co
mpanies A
ct 20
06 (S
trat
egic R
epor
t and D
ire
ctor
s’ Rep
ort) R
eg
ulati
ons 2013
Risks asso
ciated with C
O
VID
-
1
9
Th
e potenti
al impa
ct of the C
OVID
-
1
9 pan
demic o
n GSK
’s
trading
performance and
all o
ur prin
cipal risk
s has been
as
ses
sed w
ith miti
gation p
lans pu
t in plac
e. In 2021
, as
anticipa
ted, t
he pandem
ic impact
ed Group
performance
primarily in demand
for
vaccines and
reﬂected the
prioritisation
of C
O
VI
D-
1
9 va
ccina
tion pro
gram
mes by gove
rnme
nts,
including
social distancing rules
resulting from
COVID-
1
9 tha
t
af
fecte
d custom
ers’ ab
ilit
y and wil
lingne
ss to ac
ces
s vacci
nation
ser
vices across al
l regions.
W
e contin
ue t
o remain
conﬁdent in the
underlying
demand
for ou
r vacci
nes and a
re enc
ourag
ed by the r
ate at whic
h
COVID
-
1
9 vaccinat
ions and
boosters are bei
ng admin
istered in
many coun
tries, which provides
support for healthcare sy
stems
and t
he eventua
l retur
n t
o nor
mal. T
his co
ntinue
s to be a dyn
amic
sit
uation
, with th
e future s
everit
y
, dur
ation an
d impac
t unk
nown
at thi
s point in
cludi
ng potenti
al imp
acts on t
radin
g resul
ts, cl
inic
al
tri
als, s
uppl
y contin
uity, and o
ur empl
oyees
. The si
tuation c
ould
cha
nge at any ti
me and th
ere ca
n be no as
sur
ance th
at the
COV
ID
-
1
9 pand
emic wi
ll not have a mate
rial ad
vers
e impac
t
on th
e future r
esul
ts of the G
roup.
In this s
ect
ion
Repor
t
ing framework
56
Our a
ppro
ach to ta
x
6
0
Financial performance
6
1
Adjusting
items
70
Cash generation and
conv
ersion
73
Financial position
and r
esources
7
4
T
rea
sury policies
79
Critical accountin
g policies
80
G
rou
p
ﬁ
nan
ci
al
re
vie
w
GS
K Ann
ual R
epor
t 2021
55
Strategic report
Governance and remuneration
Financial statements
Investor information
56
GS
K Ann
ual R
epor
t 2021
T
ot
al and Adjusted r
esults
Th
e Group ﬁ
nanc
ial revi
ew disc
usse
s the op
eratin
g and
ﬁna
ncia
l per
form
ance o
f the Gro
up, its c
ash ﬂ
ows and ﬁn
ancia
l
pos
itio
n and our r
esour
ces
. The r
esult
s for eac
h year ar
e
co
mpare
d prim
arily w
ith the r
esul
ts of the pr
eced
ing yea
r
.
T
ot
al r
esults
T
otal reported results represent t
he Group
’
s o
verall
per
f
ormance.
GS
K also u
ses a num
ber of ad
juste
d, non-
IF
RS, m
eas
ures to
rep
or
t the per
for
manc
e of its bu
sine
ss. A
djuste
d resu
lts and
other n
on-I
FRS
measures may be
considered in
addition t
o,
but n
ot as a sub
stitu
te for or sup
erio
r to, infor
mation p
rese
nted
in ac
cord
ance w
ith I
FRS
. Adjus
ted res
ults ar
e deﬁn
ed below
and o
ther non
-I
FRS me
asu
res ar
e deﬁn
ed on pag
e 59.
GSK believes
that
Adjusted
results, when considered t
ogether
wit
h T
ota
l resu
lts, p
rovide i
nvestor
s, an
alyst
s and othe
r
stakeholders with helpful
complementar
y
information t
o
understand be
tter t
he ﬁnanc
ial performance and
position
of the G
roup f
rom per
iod to pe
riod
, and all
ow the Gr
oup’
s
per
fo
rmanc
e to be mor
e eas
ily com
pare
d again
st the ma
jori
ty
of it
s peer c
ompan
ies
. Thes
e mea
sure
s are al
so use
d by
man
ageme
nt for pla
nning a
nd rep
ort
ing pur
pose
s. Th
ey may
not be
directly comparable with
similarly described measures
use
d by other c
ompa
nies
.
GS
K enco
urage
s investo
rs and a
nalys
ts not to re
ly on any
sin
gle ﬁna
ncia
l meas
ure but to r
eview GS
K’s An
nual Rep
or
ts,
including the ﬁnancial statements
and not
es, in their entirety
.
Adjusted results
Adjusted
results ex
clude t
he foll
owing it
ems from
T
otal results,
toget
her wi
th the ta
x ef
fec
ts of all of th
ese i
t
ems:
–
amortisation of
intangible assets (
excluding
computer so
ft
ware
and capitalised
dev
elopmen
t costs
)
–
impairment of intangible assets (
ex
cluding computer
soft
w
are
)
and goodwil
l
–
Ma
jor re
stru
cturin
g cost
s, wh
ich inc
lude im
pair
ments of
tangible assets and
computer
soft
ware,
(
un
der speciﬁc
Bo
ard app
roved pr
ogra
mmes th
at are str
uctur
al, of a
sig
niﬁc
ant sc
ale a
nd wher
e the co
sts of in
divid
ual or r
elated
pro
jects e
xceed £
25 millio
n
) inclu
ding inte
grati
on cos
ts
followin
g mat
erial acquisition
s
–
transaction-relat
ed accounting
or ot
her adjustm
ents rela
ted
to
signiﬁcant acquisitions
–
proceeds and
costs o
f disposals
of
associates, pr
oducts
and businesses; signiﬁca
n
t settlement income; signiﬁcant
leg
al cha
rges (net o
f insur
ance r
ecover
ies) and exp
ense
s on
the s
ettl
ement of l
itigat
ion and g
overnm
ent inves
tigati
ons;
othe
r oper
ating in
come oth
er than r
oyalt
y inco
me, and o
ther
item
s inclu
ding the i
mpact o
f the reval
uation o
f defer
red ta
x
as
sets a
nd liab
ilitie
s follow
ing ena
ctmen
t of the inc
rea
se in
the h
eadlin
e rate of U
K corp
orati
on ta
x from 19% to 25%
(
ef
fect
ive 2023
)
–
separation costs in
clude costs t
o establish Consumer
He
althc
are a
s an ind
epend
ent bus
ines
s, as we
ll as ad
miss
ion
listing and
demerger costs
Costs for
all o
ther
ordinary course smal
ler scale
restructuri
ng
and l
egal c
harge
s and ex
pense
s are r
etain
ed with
in both T
otal
and Adjusted results
.
As Ad
justed r
esul
ts incl
ude the b
eneﬁ
ts of Ma
jor re
struc
turin
g
programmes but e
xclude sign
iﬁcant costs (
such
as amortisation
of int
angib
le as
sets exc
ept for c
ompute
r sof
twar
e and
capitalised de
velo
pment
costs, signiﬁcant
legal, maj
or
re
struc
turin
g and tra
nsac
tion ite
ms
), they sho
uld
not b
e regar
ded a
s a comp
lete pic
ture of the G
roup’s ﬁnan
cial
per
fo
rmanc
e, whi
ch is pr
esen
ted in its T
otal r
esul
ts. Th
e
exclusion
of o
ther Adjust
ing it
ems ma
y result
in Adjust
ed
ea
rning
s being m
ateria
lly high
er or lowe
r than T
otal e
arnin
gs.
In particular
, when
signiﬁcant impai
rments, restructu
ring
charges and legal
costs are ex
cluded, Adjust
ed earnings
wil
l be high
er than T
otal e
arni
ngs.
GS
K is unde
rt
aki
ng a numb
er of Ma
jor re
struc
turin
g
pro
gram
mes in r
espo
nse to sig
niﬁc
ant ch
ange
s in the Gr
oup’
s
tra
ding envi
ronme
nt or over
all str
ategy, or follow
ing mater
ial
acq
uisit
ions
. Cos
ts, bo
th cas
h and no
n-ca
sh, of t
hese
programmes are provided for
as individual elements
are a
pprove
d and mee
t the acc
ounti
ng rec
ogniti
on cri
teria
.
As a r
esult
, char
ges may b
e incur
red over a nu
mber of ye
ars
following
the initia
tion of
a Major restructuring programme.
Signiﬁcant legal
charges
and e
xpenses are
those
arising
from
the s
ettl
ement of l
itigat
ion or gove
rnme
nt invest
igatio
ns that
are n
ot in the no
rmal c
ours
e and ar
e materi
ally la
rger th
an mor
e
regularly occurring ind
ividual matters. They
also include
cert
ain
major legacy
matters.
Reconciliations
between T
otal and
Adjusted
results, providi
ng
fur
the
r infor
mation o
n the key Adju
sting i
tems for 2020 a
nd
202
1 are s
et out on p
age 70 and for t
he ﬁve yea
rs to 202
1 are
set o
ut on pag
es 263 to 268
.
GS
K provi
des ea
rning
s guida
nce to the i
nvestor c
ommun
ity o
n
the b
asis o
f Adjus
ted res
ults. T
his is i
n line wi
th peer c
ompa
nies
and ex
pec
tation
s of the inve
stor com
munit
y
, sup
por
ting ea
sie
r
co
mpari
son of th
e Grou
p
’s per
form
ance w
ith its p
eers
. GS
K is
not ab
le to give gu
idanc
e for T
otal re
sults a
s it ca
nnot re
liabl
y
fore
ca
st cer
ta
in mater
ial ele
ments o
f the T
ot
al res
ults
,
par
ti
cular
ly the fu
ture fai
r value m
ovements o
n conti
ngent
co
nside
ratio
n and put o
ptions th
at can a
nd have give
n rise to
sig
niﬁc
ant ad
justm
ents dr
iven by ex
terna
l factor
s suc
h as
cur
rency a
nd othe
r movement
s in cap
ital m
arkets
.
Repo
rt
ing fram
e
work
Group
ﬁnanci
al re
vie
w
GS
K Ann
ual R
epor
t 2021
57
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Historic
al record of Adjusting ite
ms
Th
e reco
ncilia
tions b
etwee
n T
ot
al and Ad
justed o
perat
ing pro
ﬁt over the l
ast ﬁ
ve year
s can b
e summa
rise
d as foll
ows:
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
T
otal operating proﬁt
6,201
7,
7
8
3
6,961
5,483
4,087
Intangible asset amortis
ation
802
77
5
777
580
5
91
Intangible asset impairment
322
263
83
116
688
Major restructuring
626
1,532
1,1
05
809
1,056
T
rans
action-related items
1,1
59
1,308
3
45
1
,
977
1,5
99
Divestments, signiﬁcant legal and other items
(61
8)
(2,823)
(29
9)
(220)
(119)
Separation costs
3
14
68
–
–
–
US t
ax reform
–
–
–
–
666
Adjusted operating proﬁt
8,80
6
8,906
8,
972
8
,74
5
8,5
68
Th
e analy
sis of the i
mpac
t of tran
sacti
on-r
elated ite
ms on op
eratin
g proﬁ
t for eac
h of the la
st ﬁve ye
ars is a
s follow
s
:
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
Novartis Consumer Healthcare Joint V
enture put option
–
–
–
65
8
986
Contingent consideration on former Shionogi-V
iiV Healthcare JV (including Shionogi preferential dividends)
1,026
1,114
31
1,18
8
55
6
V
iiV Healthcare put options and Pﬁzer preferential dividends
48
(52)
(234)
(58)
(126)
Contingent consideration on former Novartis V
accines business
27
172
76
58
10
1
Release of fair value uplift on acquired Pﬁzer inventory
–
91
366
–
–
Other adjustments
58
(17)
10
6
131
82
T
rans
action-related items
1,1
59
1,308
3
45
1
,
977
1,5
99
Full r
econ
ciliat
ions be
twee
n T
ota
l and Adj
usted r
esult
s for 20
1
7
–
202
1 are s
et out on p
ages 266 to 268
. Fur
ther ex
plan
ations o
n
the Ad
justi
ng items fo
r 202
1 are re
por
ted on pa
ge 7
0.
Reporting framework
continued
Non-controlling inter
ests in V
iiV Healthcare
T
rading proﬁt allocations
Be
caus
e ViiV H
eal
thca
re is a sub
sidi
ar
y of the Gr
oup, 1
00%
of it
s oper
ating re
sults (turnove
r
, oper
ating pr
oﬁt, p
roﬁt af
ter t
ax)
are i
nclud
ed wit
hin the G
roup inc
ome st
atemen
t and the
n a
por
ti
on of the e
arnin
gs is all
ocated to t
he non-
contr
olling
inter
ests ow
ned by th
e other sh
areh
older
s, in li
ne with t
heir
respective equity shareholdin
gs (Pﬁzer 1
1
.
7
% and Sh
ionogi
1
0%
). Ea
ch of the s
hareh
older
s, in
cludi
ng GSK
, is a
lso ent
itled
to
preferential
dividends det
ermined b
y the
performance of
cer
tain products
that each
shareholder contributed.
As the
rel
ative pe
rfo
rman
ce of the
se pro
ducts c
hang
es over tim
e, the
proportion of the
overall
earnings allocat
ed t
o each
shareholder
als
o chan
ges
. In par
tic
ular, the inc
rea
sing pr
opor
tion o
f sale
s of
dolutegravir and
cabotegravir
-containing products has a
fav
ourable impact
on the
proportion of the
preferent
ial dividends
that i
s alloc
ated to GS
K. A
djust
ing item
s are all
ocate
d to
sha
reho
lder
s base
d on thei
r equit
y inter
ests
. GS
K was enti
tled
to app
roximate
ly 86% o
f the T
ot
al ear
ning
s and 83
% of the
Adj
usted e
arnin
gs of Vii
V Hea
lthc
are for 2021
.
Remeasurements o
f the
liabil
ities for
the
preferent
ial dividen
ds
all
ocated to P
ﬁ
zer and S
hiono
gi are in
clude
d withi
n other
operating income/(
exp
ense
).
Acquisition-related arrangements
As consideration
for th
e acquisition
of Shion
ogi’
s in
terest in
the
former Shionogi-
V
iiV
Healthcare joint v
enture
in 2
0
1
2, Shionog
i
rec
eive
d the 1
0% equi
ty s
take in V
iiV He
althc
are a
nd Vii
V
He
althc
are a
lso agr
eed to pay ad
dition
al futu
re ca
sh
consideration t
o Shionog
i, contingen
t on t
he futu
re sales
per
fo
rmanc
e of the pr
oduc
ts bein
g develop
ed by that j
oint
ventu
re, dol
utegrav
ir and c
aboteg
ravir. Under I
FRS 3 `
Bus
ines
s
co
mbinati
ons’
, GSK wa
s requ
ired to pr
ovide fo
r the es
timated
fai
r value of t
his con
tingen
t consi
dera
tion at the t
ime of
acq
uisit
ion and i
s requi
red to upd
ate the lia
bilit
y to the late
st
es
timate of fa
ir value a
t each su
bseq
uent pe
riod e
nd. Th
e
liability for
the conti
ngent considerat
ion recognised in
the
bal
ance s
heet at th
e date of ac
quisi
tion wa
s £659 mi
llion.
Subsequent re-measurements are
reﬂected with
in other
ope
rating i
ncom
e/(
expen
se
) and wi
thin Ad
justin
g items in t
he
inc
ome st
atement i
n each p
erio
d.
Cash payments
to
settle the
contingent
consideration are
made t
o Shionogi
by
ViiV Healthcare each quarter
,
based on
the ac
tual s
ales p
er
form
ance a
nd other i
ncome o
f the rel
evant
pro
ducts i
n the prev
ious qu
ar
ter
. The
se payme
nts red
uce the
bal
ance s
heet li
abili
ty an
d henc
e are not r
ecor
ded in th
e incom
e
st
atement
. The c
ash pay
ments m
ade to Shi
onogi by V
iiV
He
althc
are in 2021 were £
826 milli
on.
Be
caus
e the lia
bilit
y is re
quired to b
e reco
rded at t
he fair va
lue
of es
timate
d future p
ayment
s, ther
e is a sig
niﬁc
ant tim
ing
dif
fer
ence b
etwe
en the ch
arge
s that are r
ecor
ded in t
he T
ot
al
inc
ome st
atement to r
eﬂec
t moveme
nts in the f
air valu
e of the
lia
bilit
y and th
e actua
l cas
h paymen
ts made to s
ettl
e the liab
ilit
y
.
Group ﬁn
ancial review
continued
58
GS
K Ann
ual R
epor
t 2021
Th
e cas
h paymen
ts are re
ﬂecte
d in the c
ash ﬂ
ow statem
ent
par
tl
y in oper
ating c
ash ﬂ
ows and pa
rt
ly with
in invest
ing
act
iviti
es. T
he ta
x rel
ief on th
ese pay
ments is r
eﬂe
cted in th
e
Gr
oup’
s Adju
sting i
t
ems a
s par
t of th
e ta
x charg
e. The p
ar
t
of ea
ch payme
nt rela
ting to the or
igina
l esti
mate of the f
air
value o
f the
contingent
consideration on
the
acquisition o
f the
Shi
onogi
-
Vii
V Hea
lthca
re join
t venture i
n 20
1
2 of £
659 milli
on
is re
por
ted wi
thin inves
ting ac
tivit
ies in th
e cas
h ﬂow st
atement
and t
he par
t of ea
ch payme
nt rela
ting to the in
crea
se in th
e
liability since
the a
cquisition
is reported with
in operat
ing cash
ﬂows
.
Movements
in conti
ngent considerat
ion pa
yable t
o Shion
ogi
were a
s follow
s
:
2021
£m
2020
£m
Contingent consideration at beginning of the year
5,3
59
5,1
03
Remeasurement through income statement
1,026
1,114
Cash payments: operating cash ﬂows
(721)
(751)
Cash payments: investing activities
(1
05)
(1
0
7)
Contingent consideration at end of the year
5,559
5,359
Of the conting
ent consideration
pay
able (
on a post
-tax basis
)
to Shi
onogi at 31 Dec
embe
r 202
1
, £
937 millio
n (
3
1 Dec
embe
r
2020 – £7
45 m
illion) is ex
pected to b
e paid w
ithin o
ne year.
Exit rights
P
ﬁzer m
ay reque
st an I
PO of V
iiV H
ealt
hcar
e at any time a
nd if
eit
her GS
K does n
ot cons
ent to suc
h IP
O or an of
feri
ng is not
co
mpleted w
ithin n
ine mont
hs, P
ﬁze
r coul
d requir
e GSK to
acq
uire it
s shar
eholdi
ng. Un
der the o
rigin
al agre
ement
s, GS
K
had th
e unco
nditio
nal ri
ght, so l
ong as i
t made no s
ubse
quent
distribution t
o its shareholders, to
withhold its
consent to
the
exer
cise of t
he P
ﬁzer pu
t option a
nd, a
s a resu
lt, in ac
cord
ance
wit
h IFR
S, GS
K did not r
ecog
nise a li
abili
ty for t
he put opt
ion
on it
s bala
nce sh
eet. H
owever
, duri
ng Q
1 20
1
6
, GSK n
otiﬁe
d
P
ﬁzer t
hat it had i
rrevoc
ably g
iven up th
is righ
t and ac
cordi
ngly
rec
ogni
sed the l
iabil
ity fo
r the put op
tion on th
e Grou
p
’s balan
ce
she
et duri
ng Q
1 20
1
6 at a
n initi
al valu
e of £
1
,07
0 milli
on.
Co
nsis
tent with t
his revi
sed tr
eatme
nt, at the e
nd of Q
1 20
1
6
GSK also recognised liabil
ities for
the fut
ure preferen
tial
dividends anticipa
ted
to
become pay
able t
o Pﬁ
z
er and
Shionogi
on th
e Group’s bal
ance s
heet.
Th
e closi
ng bal
ance
s of the lia
bilit
ies re
lated to P
ﬁzer
’
s
shareholding are as f
ollows
:
2021
£m
2020
£m
Pﬁzer put option
1,008
960
Pﬁzer preferential dividend
–
1
Und
er the or
igina
l agree
ments
, Shio
nogi c
ould al
so have
req
ueste
d GSK to ac
quire i
ts sha
rehol
ding in V
iiV He
alth
care
in si
x-mont
h window
s comme
ncing i
n 20
1
7
, 2020 and 2022.
GS
K had the u
ncond
ition
al righ
t, so lo
ng as it m
ade no
subsequent distribution t
o its
shareholders, to withhold
its
co
nsent to th
e exerci
se of the S
hiono
gi put opti
on and
, as a
re
sult, G
SK di
d not rec
ognis
e a liabi
lity f
or the put o
ption o
n
its balance
sheet.
Howeve
r
, during Q1 20
1
6, GS
K notiﬁ
ed Shi
onogi th
at it had
irr
evoca
bly give
n up this r
ight an
d acco
rdingl
y reco
gnis
ed the
lia
bilit
y for the p
ut opti
on on the G
roup’s bala
nce she
et duri
ng
Q1 20
1
6 at an i
nitia
l value of £
926 millio
n. In Q
4 20
1
6,
Shi
onogi i
rrevoc
ably a
greed to wa
ive its p
ut optio
n and as a
result GSK de-recognised the
liability for
this p
ut option
on
the G
roup’s bala
nce sh
eet dire
ctly to e
quit
y
. The va
lue of the
lia
bilit
y was £1
,244 milli
on whe
n it was de
-rec
ogni
sed.
GS
K also h
as a ca
ll optio
n over Shi
onogi’s sha
reho
lding in
Vii
V Hea
lthc
are, w
hich un
der the o
rigin
al agre
ement
s was
exer
cisa
ble in si
x-mont
h window
s comm
encin
g in 202
7
, 203
0
and 20
32. GS
K has now i
rrevoc
ably a
greed to wa
ive the ﬁ
rst
t
wo exerci
se wind
ows, bu
t the la
st six-m
onth wi
ndow in 2032
rem
ains
. As this c
all op
tion is at f
air valu
e, it ha
s no valu
e for
accounting purpose
s.
Settlement with Gilead Sciences Inc. (Gilead)
On 1 F
ebru
ar
y 202
2, V
iiV He
althc
are r
eache
d agre
ement w
ith
Gil
ead to se
ttle th
e globa
l patent i
nfring
ement l
itiga
tion re
lating
to
the commercialisation
of Gilead’
s
Biktar
vy.
Under the
terms
of the g
loba
l sett
lemen
t and lic
ensin
g agree
ment
, Gile
ad made
an up
front p
a
yme
nt of $1
.
25 billi
on to Vii
V Hea
lthca
re whi
ch
was r
ecei
ved on 1
5 Feb
ruar
y 2022. I
n additi
on, Gi
lead w
ill als
o
pay a 3% r
oyalt
y on all fu
ture US s
ale
s of Bik
tar
v
y and in
re
spec
t of the bic
tegrav
ir comp
onent o
f any other f
uture
bictegravir
-containing products
sold in t
he US. These royalties
wil
l be payabl
e by Gile
ad to Vii
V Hea
lthc
are fro
m 1 Febr
uar
y
2022 until t
he expir
y of V
iiV H
ealth
care’s US Pate
nt No.
8,
1
29,
385 o
n 5 Octob
er 202
7
. Gi
lead
’
s oblig
ation to pay
royal
ties d
oes not ex
ten
d into any per
iod of r
egulato
ry p
aediat
ric
exclusivity
,
if a
warded. The
settlement
resulted
in a
re-measurement of
the
existing
liabilit
ies for
conting
ent
co
nside
ratio
n and the P
ﬁ
zer put opt
ion at the 2021 year e
nd.
Th
e impac
t of the set
tle
ment wi
th Gile
ad on the c
ontin
gent
co
nside
ratio
n liabi
lity (CC
L) is to inc
rea
se it by £28
8 millio
n,
on a po
st-ta
x basi
s in Q4 2021 due to the ob
ligati
on Vii
V
Healthcare has to
pay
future cash consideration
to
Shionogi
for
its s
hare of t
he upfr
ont and of t
he futur
e US sa
les pe
rfo
rman
ce
of Biktar
v
y
and products containing bictegravir
. Including the
imp
act of th
e sett
lemen
t at 3
1 Dece
mber 2021
, the liab
ilit
y
whi
ch is dis
coun
ted at 8% stoo
d at £5
,559 mil
lion, o
n a
post
-tax basis.
P
ﬁzer h
as the r
ight to re
quire G
SK to acq
uire it
s share
holdi
ng
in V
iiV He
althc
are i
n cer
tai
n circu
msta
nces at a
ny time. A p
ut
option l
iability is theref
ore recorded on
the Group
’
s
balance
she
et as a cu
rrent l
iabil
ity. It is m
eas
ured on t
he gros
s
redemption basis deriv
ed from
an int
ernal valua
tion o
f the
ViiV
Healthcare busines
s.
Th
e impac
t of the set
tle
ment on th
e P
ﬁzer pu
t option l
iabil
ity
is an i
ncre
ase of £1
1
4 mill
ion and i
s inclu
ded in th
e
re
-mea
surem
ent at 31 Dece
mber 2021
.
Se
e page 25
1 for an exp
lanati
on of the p
ost ba
lanc
e sheet
event i
mpact
.
Reporting framework
continued
GS
K Ann
ual R
epor
t 2021
59
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Fr
ee cash ﬂow
Fre
e cas
h ﬂow is de
ﬁned a
s the net c
ash i
nﬂow fr
om oper
ating
act
iviti
es le
ss ca
pita
l expen
diture o
n prope
rt
y
, pla
nt and
equipment an
d intangible
assets, contingent
consideration
paym
ents
, net ﬁna
nce co
sts
, and div
idend
s paid to no
n-
controlling in
terests plus
proceeds from the sale of
propert
y
,
pla
nt and eq
uipme
nt and int
angib
le as
sets
, and di
viden
ds
rec
eive
d from jo
int ventur
es and a
sso
ciates
. It is u
sed by
man
ageme
nt for pla
nning a
nd rep
ort
ing pur
pose
s and in
discussions with an
d presentations
to
inv
estment analy
sts
and r
ating ag
encie
s. Fr
ee ca
sh ﬂow gr
owth i
s cal
culated
on a reported basis. A reconcil
iation o
f net
cash inﬂow from
ope
ratio
ns to free c
ash ﬂ
ow is set o
ut on pag
e 7
3.
CE
R and AE
R gr
owth
In o
rder to ill
ustr
ate under
lying p
er
forma
nce, i
t is the G
roup’s
pr
actic
e to discu
ss its r
esul
ts in term
s of cons
tant exc
hange
rate (CER
) grow
th. Th
is repr
ese
nts grow
th ca
lcula
t
ed a
s if
the exc
hange r
ates us
ed to deter
mine the r
esul
ts of overs
eas
companies in St
erling
had remained
unchanged from
those
use
d in the c
ompar
ative pe
riod
. CER
% repr
ese
nts grow
th
at co
nsta
nt exchan
ge rates
. £% o
r AER
% repr
esent
s grow
th
at actua
l exchange r
at
es
.
Return on capit
al employed
Retu
rn on ca
pita
l employe
d is ca
lculate
d as tota
l proﬁ
t befor
e
ta
xati
on as a p
erce
ntage of ave
rage ne
t ass
ets over the ye
ar
.
Net debt
Pl
eas
e see Note 29 ‘
Net D
ebt’ fo
r the ca
lculat
ion of net d
ebt.
2 year Compound Annual Growth Rate
CAGR i
s deﬁne
d as the c
ompo
und annu
al grow
th r
ate and
show
s the annu
alis
ed averag
e rate of pro
-forma r
evenue gr
owt
h
bet
ween t
wo give
n year
s, as
sumin
g grow
th take
s plac
e at an
exponentially
compounded rat
e. For
Consumer Healthcare,
the 2 ye
ar revenu
e CAGR ha
s been p
rese
nted show
ing the
ann
ualis
ed averag
e rate of pr
o-form
a revenue g
rowt
h bet
ween
201
9 and 2021
.
COVI
D
-1
9 solutions
COV
ID
-
1
9 solut
ions in
clude th
e sal
es of pa
ndemi
c adjuva
nt
and other COVID-
1
9 solutions including
vaccine manufacturing
and
Xev
udy
and the a
sso
ciated c
osts b
ut doe
s not incl
ude
rei
nvestme
nt in R&
D. This c
ategor
isati
on is use
d by
man
ageme
nt and we be
lieve is h
elpful to i
nvestor
s throug
h
prov
iding c
lari
ty on th
e resu
lts of the G
roup by s
howing th
e
contribution t
o g
rowth from COVID-
1
9 solu
tions.
General Medicines
General medicines are usual
ly prescribed in t
he primary
care or community settings
by general
healthcare practitioners.
For GSK
, this
includes medicines in inhaled respiratory,
dermatology
, antibiotics and
other d
iseases
.
Specialty Medicines
Specialty medicines
are typically
prescripti
on medic
ines used
to tre
at comp
lex or ra
re chro
nic co
nditio
ns. F
or GSK
, thi
s
comprises medicines in in
fectious d
iseases
,
HIV
, oncology
,
immunology and respiratory.
Reporting framework
continued
Group ﬁn
ancial review
continued
60
GS
K Ann
ual R
epor
t 2021
Our approach to tax
Bu
sines
s make
s a major c
ontri
butio
n to the publ
ic pur
se
through
its tax contribution. This
includes direct
ta
x
es (
such
as c
orpo
rate inc
ome ta
x) an
d indire
ct ta
xes (such a
s V
A
T a
nd
cus
toms dut
ies) as well a
s other t
axe
s (
such a
s empl
oyment
ta
xes a
nd prop
er
ty ta
xe
s
). It is the
refor
e impor
ta
nt that
co
mpani
es expl
ain the
ir app
roach to t
ax
. This h
elps in
form
dia
logue a
bout t
ax a
nd ta
x poli
cy
.
We are sup
por
tive of e
ffo
rts to e
nsure c
ompa
nies a
re
appropriat
ely tran
sparent about
how
their
tax affairs are
man
aged
. As par
t of th
at, our T
ax S
trategy i
s set out i
n
det
ail wi
thin the P
ublic p
olici
es se
ction o
f our webs
ite.
W
e suppor
t
the exchange of
countr
y-b
y-countr
y reporting
(
CBCR) data
between tax authorities
as, validat
ed a
gainst
exi
sting in
format
ion hel
d on ta
xpaye
rs, i
t will su
ppor
t thei
r abili
ty
to ens
ure mult
inatio
nal gro
ups pay the r
ight am
ount of t
ax i
n the
right places
.
As a gl
obal h
ealth
car
e compa
ny
, we have a subs
tant
ial bus
ines
s
and e
mploy
ment pr
esen
ce in ma
ny countr
ies ar
ound th
e world
and p
ay a signi
ﬁca
nt amou
nt of ta
x. T
his inc
lude
s corp
orate
inc
ome ta
x an
d other bu
sine
ss ta
xes
, and t
ax a
sso
ciated wi
th
our e
mployee
s. We als
o colle
ct a sig
niﬁc
ant am
ount of t
ax on
behalf of go
vernment
s along
our supply
chain, includ
ing from
our e
mployee
s.
We are sub
ject to t
ax
ation thr
ougho
ut our su
pply ch
ain. T
he
worl
dwid
e nature of o
ur ope
ration
s mean
s that our cr
oss
-bord
er
sup
ply rou
tes, ne
ces
sar
y to ens
ure sup
plie
s of medi
cines i
nto
numerous coun
tries, can result in
conﬂicting claims from
tax
auth
oriti
es as to th
e proﬁ
ts to be ta
xed i
n indiv
idual c
ountr
ies
.
Thi
s can l
ead to dou
ble ta
xati
on (
with p
roﬁt
s ta
xed in mo
re than
one c
ountr
y
).
Pr
oﬁts a
re rec
ognis
ed in ter
ritori
es by refe
renc
e to the acti
viti
es
per
fo
rmed th
ere and t
he value t
hey gene
rate. T
o ensur
e the
proﬁts recognised in
jurisdictions
are aligned
to
the activity
und
er
taken th
ere, a
nd in line w
ith cur
rent O
E
CD g
uideli
nes
, we
ba
se our tr
ansfe
r pric
ing pol
icy on the a
rm’s length p
rinc
iple an
d
support our transfer prices with
economic analysis
and reports.
We do not eng
age in ar
ti
ﬁcia
l ta
x arr
angem
ents – th
ose wi
thout
bus
ines
s or com
merc
ial sub
sta
nce. We do not s
eek to avoid t
ax
by the u
se of ‘
ta
x havens’ or tr
ansa
ction
s we would not f
ully
dis
clos
e to a ta
x author
ity. We have a zero-tol
eran
ce app
roach
to ta
x evas
ion and t
he faci
litati
on of ta
x evas
ion.
T
a
x ri
sk in al
l countr
ies in w
hich we o
perate i
s manag
ed thro
ugh
robust int
ernal policies, proces
ses, training
and compliance
pro
gram
mes
. Our Bo
ard of D
irecto
rs and t
he Audit & R
isk
Committee are responsi
ble for
appro
ving ou
r tax policies and
risk managemen
t arrangement
s as part of o
ur wider
int
ernal
control framework.
We seek to ma
inta
in open a
nd con
struc
tive re
lation
ships w
ith
ta
x aut
horit
ies wor
ldwi
de, mee
ting re
gular
ly to disc
uss ou
r ta
x
af
fair
s and re
al tim
e busin
ess up
dates w
herever p
oss
ible.
We also mo
nitor gove
rnme
nt debate o
n ta
x polic
y in our key
jur
isdic
tions s
o that we ca
n unde
rsta
nd and s
hare a
n inform
ed
poi
nt of view r
egar
ding any p
otentia
l future c
hange
s in ta
x law.
Where relev
ant, we
provide
pragmatic
and constructiv
e
bus
ines
s input to t
ax p
olicy m
akers e
ither d
irec
tly or thr
ough
ind
ustr
y trad
e bodi
es, ad
vocat
ing refo
rm to supp
or
t econ
omic
grow
th an
d job cr
eation a
s well a
s the nee
ds of our p
atient
s
and other
key
stakeholders.
In 2021
, the Gro
up cor
porate t
ax c
harge w
as £
346 mill
ion
(2020 – £58
0 millio
n
) on pro
ﬁts be
fore ta
x of £
5,4
4
2 milli
on
(2020 – £6,9
68 mill
ion
) rep
rese
nting a
n eff
ective t
ax r
ate of
6.
4
% (20
20 – 8.
3%
). We made c
ash ta
x pay
ments o
f £
1
,
29
1
mill
ion in th
e year (2020 – £
1
,655 mil
lion). In add
ition to th
e
ta
xes we p
ay on our pr
oﬁts
, we pay duti
es, l
evies
, tran
sact
ional
and employment
ta
x
es.
Our A
djuste
d ta
x rate for 2021 was 1
7
.
5% (2020 – 1
6.
0%
).
Th
e rate has b
eneﬁ
ted fro
m the clo
sure of op
en is
sues w
ith ta
x
auth
oriti
es in va
rious j
urisd
icti
ons. F
ollowi
ng sepa
ratio
n of the
Co
nsume
r busi
ness a
nd subj
ect to any ma
terial c
hang
es in our
product mix, or
other ma
terial
changes in tax regulation
s or la
ws
in th
e countr
ies in w
hich we o
perate
, the Gro
up’
s averag
e
ef
fect
ive Adju
sted ta
x rate i
n the med
ium term i
s expec
ted to be
around 1
6%
.
Th
e Group’s T
ot
al ta
x rate fo
r 202
1 o
f 6.4% (2020 – 8.3
%
) was
lower t
han the Ad
juste
d ta
x rate mai
nly due to en
actme
nt of an
inc
rea
se in the U
K cor
porate i
ncome t
a
x rate from 19% to 25%
re
sultin
g in an inc
rea
se in the va
lue of ba
lanc
e sheet t
a
x ass
ets.
Due to t
he magni
tude, G
SK ha
s repo
rte
d this cre
dit a
s an
Adj
usting i
tem in 2021 so that it d
oes not o
bscu
re the key
tre
nds in the G
roup’s per
for
manc
e for the pe
riod
.
Th
e OECD an
d the EU co
ntinue to deve
lop new p
olici
es whi
ch
wil
l not only l
ead to a sub
sta
ntiall
y incre
ase
d ta
x comp
lianc
e
bur
den but m
ay
, in the ca
se of th
e OECD’s pro
ject to ‘
Addr
ess
the T
ax Challenges of Digitalisation
’
, fundamentally change
the
interna
tional corporat
e tax landscape and therefore
the
ta
x
pro
ﬁles o
f multin
ationa
l comp
anie
s, inc
luding G
SK
, by: (i)
re
alloc
ating c
ountri
es’ ta
xin
g right
s for the la
rges
t and mo
st
pro
ﬁta
ble mult
inatio
nals; and (i
i) set a new mi
nimum gl
obal
co
rpor
ate ta
x rate of 1
5%. T
his pro
ject ac
hieved p
oliti
cal
co
nsens
us duri
ng 202
1
, w
ith a pla
n for ef
fec
tive impl
emen
tation
in 2023
. However, the deta
iled r
ules a
re still u
nder di
scus
sion
and i
t is not the
refor
e poss
ible to ac
curate
ly fore
cas
t the imp
act
for G
SK at thi
s stage
.
Fur
the
r detai
ls abou
t our co
rpor
ate ta
x char
ges for t
he year a
re
set o
ut in Note 1
4.
GS
K Ann
ual R
epor
t 2021
61
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Adju
sted o
pera
ting p
roﬁt (£b
n
)
£8
.
8bn
T
otal o
perat
ing pr
oﬁt (£b
n
)
£6
.
2b
n
£
3
4
.
1b
n
Financial
per
f
ormance
AE
R gr
owth
(
1)
%
CE
R gr
owth
9%
0
2
4
6
8
10
2021
2020
2019
8.8
8.9
9.0
AE
R gr
owth
(20)%
CE
R gr
owth
(9)
%
0
2
4
6
8
10
2021
2020
2019
6.2
7.8
7.0
Th
e T
ota
l resu
lts of the G
roup ar
e set ou
t below.
2021
2020
Growth
% of
% of
£m
turnover
£m
turnover
£%
CE
R%
T
urnover
34,1
14
10
0
34,
099
10
0
–
5
Cost of sales
(1
1,603)
(34.0)
(11,
704)
(34.3)
(1)
2
Selling, general and
administration
(1
0,9
7
5)
(32.1)
(11,456)
(33.6)
(4)
–
Research and
development
(5,2
78)
(1
5.5)
(5,09
8)
(15.0)
4
7
Royalty income
4
19
1.2
318
0.9
32
32
Other operating
(expenses)/income
(4
76)
(1.4)
1,624
4.8
Operating proﬁt
6,201
18.2
7,
7
8
3
22.8
(20)
(9)
Net ﬁnance costs
(7
56)
(848)
Share of after-tax
proﬁts of associates
and joint ventures
33
33
Loss on disposal
of interest in
associates
(36)
–
Proﬁt before tax
ation
5,4
42
6,9
68
(22)
(1
0)
T
axation
(3
46)
(58
0)
Proﬁt after tax
ation
for the year
5,09
6
6,3
88
(20)
(9)
Proﬁt attributable to
shareholders
4,3
85
5
,74
9
Earnings per share (p)
87
.6p
115.5
(24)
(13)
Earnings per ADS
(US$)
2.42
2.9
8
Th
e Adjus
t
ed re
sult
s for the Gr
oup ar
e set out b
elow.
Reconciliations
between T
otal results
and Adjust
ed results
for
202
1 and 2020 a
re set ou
t on page 70.
2021
2020
Growth
£m
% of
turnover
£m
% of
turnover
£%
CE
R%
T
urnover
34,1
14
10
0
34,
099
10
0
–
5
Cost of sales
(10,
726)
(31.4)
(1
0,191)
(29.9)
5
8
Selling,
general and
administration
(1
0,225)
(30.0)
(1
0,
717)
(31.4)
(5)
(1)
Research and
development
(4,
7
7
6)
(1
4.0)
(4,603)
(13.5)
4
8
Royalty
income
4
19
1.2
318
0.9
32
32
Adjusted
operating
proﬁt
8,80
6
25.8
8,90
6
26.1
(1)
9
Adjusted
proﬁt
attributable
to shareholders
5,665
5
,7
6
9
(2)
9
Adjusted
earnings
per share (p)
1
1
3.2p
115.9
(2)
9
Group turnover
(£
bn)
AE
R gr
owth
0%
CE
R gr
owth
5%
0
5
10
15
20
25
30
2021
2020
2019
35
34.1
34.1
33.8
GS
K uses a n
umber o
f adjus
ted, no
n-I
FRS
, mea
sure
s to repor
t
the p
er
forma
nce of i
ts busi
ness
. Adju
sted re
sults a
nd other
non-IF
RS
measures may be
considered in
addition t
o,
but no
t
as a s
ubsti
tute for or s
uperi
or to, info
rmatio
n pres
ented in
acc
ord
ance w
ith IF
RS. A
djuste
d resu
lts and ot
her non
-I
FRS
me
asur
es are d
eﬁne
d on page
s 56 and 59.
Group ﬁn
ancial review
continued
62
GS
K Ann
ual R
epor
t 2021
Pharmace
uticals
Ph
armac
euti
cals tu
rnover i
n the year wa
s £1
7
,
7
29 milli
on, up
4% AER
, 1
0% C
ER. S
ale
s of
Xevu
dy
,
the
monoclonal
antibody
tre
atment fo
r COVI
D
-
1
9 o
f £958 m
illion c
ontri
buted
approximat
ely 6
percentage point
s t
o Pharmaceuticals growth.
HI
V sa
les wer
e down 2% A
ER but up 3
% CER
, to £
4,
77
7
mill
ion, w
ith grow
th in
D
ovato
an
d
Juluca
p
ar
tly of
fset by
T
ivi
cay
and
T
riume
q
. Res
pirato
ry s
ales we
re up 21
% A
ER, 28
% CER
,
to £2,
863 mi
llion
, on grow
th of
Tr
e
l
e
g
y
an
d
N
ucala
. Oncology
and I
mmuno
-inﬂ
ammat
ion the
rapy ar
eas e
ach co
ntinue
d to
show strong
double-digit sales growth. Sales of Established
Ph
armac
euti
cals d
ecre
ase
d 1
1
% AER
, 6% C
ER to £7
,
7
5
7
million.
In th
e US, s
ale
s grew 1
3% AER
, 21
% C
ER incl
uding s
ales o
f
Xev
udy
, which
contribut
ed approxima
tely
9 percentage
points t
o
tota
l grow
th. C
ontinu
ed stro
ng per
for
manc
e of
Tr
e
l
e
g
y
,
Nucala
,
Benlyst
a
and
D
ovato
als
o drove grow
th of N
ew and Sp
ecia
lty
pro
ducts i
n the Reg
ion. E
stab
lishe
d Pro
ducts we
re sta
ble at
AE
R but grew 6
% CER
, reﬂ
ecti
ng stro
ng dema
nd for
Established Respirator
y
products in t
he COVID
-
1
9 en
vironment
and certain supply challenges faced
by generic
competit
or
pro
ducts
, plus t
he bene
ﬁt of favou
rabl
e prior p
erio
d R
AR
adjustments.
In E
urope
, sale
s decr
eas
ed 4% AER
, 2% C
ER
, with de
cre
ase
s
in the Established Pharmaceuticals por
tfolio, i
mpacted b
y
generic competition
including
Seretide
,
Duodart
and
Volibris
,
lower a
ntibi
otic dem
and, a
nd the di
vestme
nt of ce
phalo
spor
in
pro
ducts a
t the sta
rt o
f the four
th qu
arte
r
. The de
crea
se was
par
tl
y off
set by str
ong grow
th of
Tr
e
l
e
g
y
,
Benlyst
a
and
Onc
olog
y prod
ucts
, and of
D
ovato
which more than
doubled in
the ye
ar
. Sal
es of
Xev
udy
t
otall
ing
£69 mil
lion
also cont
ribut
ed
approximat
ely 2
percentage point
s t
o t
otal growth.
Inte
rnati
onal s
ales d
ecre
ase
d 3% AER bu
t grew 4% CE
R.
Decreas
es i
n Established Pharmaceutic
als
reﬂected the impact
of COVID-
1
9 suppressed ant
ibiotics marke
ts and
increased
gen
eric c
ompet
ition i
n the ﬁr
st hal
f of the yea
r
. This wa
s off
set
by str
ong grow
th in R
espi
rator
y
,
Dovat
o
,
Tiv
icay
tender
s, and
sa
les of
Xe
vud
y
,
which added appr
oximat
ely 6
percentage
points to Internatio
nal t
otal grow
th.
Pharmace
uticals
Financial performance
continued
Group turnover by business
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
Pharmaceuticals
1
7,
7
2
9
1
7
,056
4
10
V
accines
6
,778
6,982
(3)
2
Consumer Healthcare
9,607
1
0,033
(4)
–
34,1
14
3
4,0
71
–
5
Corporate and other
unallocated turnover
–
28
34,1
14
34,
099
–
5
Group turnover by geographic r
egion
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
US
1
5,093
14,556
4
10
Europe
7
,838
8,164
(4)
(2)
International
1
1,1
83
11,3
7
9
(2)
4
34,1
14
34,
099
–
5
Gr
oup turn
over was £
34,
1
1
4 millio
n in the yea
r
, stab
le at AER
but u
p 5% CER
. Sa
les of C
OVID
-
1
9 solu
tions c
ontri
buted
app
roxim
ately 4 per
cent
age poi
nts to grow
th in th
e year.
Pharmaceuticals turnover
2021
£m
2020
(revised*)
£m
Growth
£%
Growth
CE
R%
Respiratory
2,8
63
2,360
21
28
H
IV
4
,777
4
,876
(2)
3
Immuno-inﬂammation
885
72
7
22
29
Oncology
489
372
31
37
Pandemic
958
–
–
–
New and Specialty
9,9
7
2
8,335
20
26
Established Pharmaceuticals
7
,757
8,
721
(11)
(6)
1
7,
7
2
9
1
7
,056
4
10
*
GS
K has reviewed the presentation of its pharmaceuticals products and from 1 January
2021 has moved sales of
Arnuity Ellipta
,
Incruse Ellipta
and
Relvar/Breo Ellipta
from the
Respiratory therapeutic area to the Established Pharmaceuticals therapeutic area.
Comparative information has been revised onto a consistent basis.
Gr
oup
turn
over
Tu
r
n
o
v
e
r
(
£
b
n
)
£
1
7.
7
b
n
52% o
f Group turnov
er
AE
R gr
owth
4%
CE
R gr
owth
10
%
0
5
10
15
20
2021
2020
2019
17.7
17.1
17.6
GS
K Ann
ual R
epor
t 2021
63
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Respiratory
T
o
tal Re
spira
tory s
ale
s were up 21
% A
ER
, 28% CER
, wi
th
sa
les of
Tr
e
l
e
g
y
a
nd
Nucala
each e
xceed
ing £1 billio
n per yea
r
for th
e ﬁrs
t time. I
nternat
ional R
espi
rator
y sal
es grew 3
3% AE
R,
42% CER i
nclud
ing
Nucala
up 23% A
ER
, 34% CER
, and
Tr
e
l
e
g
y
up 81
% A
ER
, 92% CER i
ncludi
ng the im
pact of th
e
Tr
e
l
e
g
y
as
thma la
unch in J
apan i
n Q4 2020. In Eu
rope
,
Res
pirato
ry g
rew 1
1
% AER
, 1
3% CE
R with do
uble di
git CER
grow
th of
Tr
e
l
e
g
y
a
nd
Nucala
. In t
he US, R
espi
rator
y grew 23%
AE
R, 3
0% CE
R, d
riven by c
ontinu
ed stro
ng per
for
manc
e of
Tr
e
l
e
g
y
and
Nuc
ala
.
Sa
les of
Nucala
wer
e £
1
,
1
42 mill
ion in the ye
ar and g
rew 1
5%
AE
R, 22% C
ER
, with c
onsi
stent, s
trong g
rowt
h acros
s all th
ree
reg
ions
. US sa
les wer
e up 1
5% A
ER
, 23% CE
R t
o £69
0
mill
ion and I
ntern
ationa
l sale
s of £1
95 m
illio
n grew 23% AE
R,
34% CE
R. E
urope s
ale
s of £25
7 milli
on grew 8
% AER
, 1
1
%
CER
.
Tr
e
l
e
g
y
sa
les wer
e up 49% A
ER, 57% CE
R to £
1
,
2
1
7 milli
on
dri
ven by grow
th in a
ll regi
ons. I
n the US
, sal
es co
ntinue to gr
ow
str
ongly i
ncludi
ng bene
ﬁt of th
e asth
ma indic
ation a
pprove
d and
lau
nched i
n Q3 2020, wi
th sal
es up 52% AE
R, 62% C
ER
. In
Eur
ope, s
ales g
rew 1
9
% AER
, 21
% C
ER and in I
ntern
ationa
l,
where
Tr
e
l
e
g
y
for a
sthma wa
s app
roved in Ja
pan in Q
4 2020,
sa
les gr
ew 8
1
% A
ER
, 9
2% C
ER to £
1
63 milli
on.
H
IV
HI
V sa
les wer
e £4,77
7 milli
on a decr
eas
e of 2% AE
R but
grow
th of 3
% CER for t
he year.
T
riumeq
s
ales we
re £
1
,882
mill
ion, d
own 1
8
% AER
, 1
4% C
ER and
T
ivic
ay
sales were
£1
,
381 millio
n, down 10% AE
R, 4% CE
R. T
he matur
e por
tfo
lio
re
sulted in l
ess t
han 1 per
cent
age poi
nt of CE
R sale
s decr
eas
e.
New H
IV pr
oduc
ts
Juluca
,
Dova
to
,
Rukob
ia
and
Cabenuva
del
ivere
d sale
s of £1
,
387 millio
n repr
esen
ting 29% o
f the total
HI
V por
t
folio (
1
8
% in 2020
). Sal
es of the t
wo dru
g regim
ens
Juluc
a
and
D
ovato
were £5
1
7 million
and £
7
8
7 mi
llion,
re
spec
tively, wit
h combi
ned grow
th of 5
0% AE
R, 5
8% CER
.
Ruko
bia
sa
les wer
e £45 m
illion
.
Cabenuv
a
, the ﬁ
rst l
ong acti
ng
inj
ecta
ble, r
ecor
ded £
38 mill
ion of s
ales fo
r the full ye
ar
.
In th
e US, tot
al sa
les wer
e £2,8
98 milli
on with a d
ecre
ase o
f
4% AER
, but g
row
th of 3% C
ER. N
ew HI
V prod
ucts de
livere
d
sa
les of £
896 m
illion
, inclu
ding:
Dova
to
£428 mill
ion wi
th
grow
th of 87% A
ER, 9
9% CE
R,
Ju
luca
£
393 mi
llion w
ith
grow
th of 2
% AER
, 8% C
ER
,
Rukobia
£
43 m
illion a
nd
Cabenuva
£
32 millio
n. Co
mbine
d
Tivi
cay
a
nd
T
riumeq
sales
were £1
,95
3 millio
n decli
ning 1
6% AER
, 1
1
% C
ER
. In Eu
rope,
tota
l sale
s were £1
,
1
94 milli
on with a d
ecre
ase of 2
% AER
,
but g
row
th of 1
% C
ER
. New H
IV pro
ducts d
elive
red sa
les of
£
4
20 milli
on, inc
ludin
g
: Dovato s
ales of £
302 m
illion
, whic
h
mor
e than do
ubled at A
ER and C
ER
, and
Julu
ca
£
111
m
i
l
l
i
o
n
wit
h grow
th of 1
4% AE
R, 18% CER
. C
ombin
ed
Tiv
icay
and
T
riume
q
sa
les wer
e £
738 mil
lion de
clinin
g 2
1
% A
ER
, 1
9%
CE
R. I
nternat
ional c
ontin
ued to grow s
trongl
y with tot
al sa
les of
£6
85 mill
ion, w
ith grow
th of 4% AE
R, 1
1
% CER
, dri
ven by the
Ti
vic
ay
tender b
usine
ss an
d new HI
V prod
ucts
.
Immuno-inﬂammation
Im
muno-
inﬂa
mmatio
n sale
s of £8
85 mi
llion gr
ew 22% AER
,
29% C
ER wit
h
Benlysta
s
ales u
p 22% AER
, 29% C
ER to
£
8
7
4 mil
lion, b
eneﬁ
ttin
g from lu
pus nep
hriti
s launc
hes in U
S
and J
apan i
n H2 2020.
Oncology
Sa
les of
Zejula
, the PAR
P inhib
itor tre
atment fo
r ovaria
n can
cer
were £
39
5 millio
n, up 1
7% A
ER
, 2
2% C
ER
, impac
ted by
ong
oing lowe
r diagno
sis ra
tes due to the C
OVI
D-
1
9 pa
ndemi
c,
par
ti
cular
ly in the U
S. Sa
les in
clude
d £2
1
2 mi
llion in t
he US and
£1
63 m
illio
n in Europ
e.
Blenrep
fo
r the tre
atment of p
atient
s with re
laps
ed or re
fracto
ry
mult
iple myel
oma wa
s approve
d and lau
nche
d in the US a
nd
Eur
ope in Q
3 2020, with on
going l
aunch
es thro
ughou
t Europ
e
in 2021
.
B
lenrep
sales
globally
to
talled £89 m
illion.
Pandemic sales
Sa
les of
Xev
ud
y
were £
958 mil
lion in th
e year, reﬂe
cting th
e
ong
oing ful
ﬁlme
nt of con
tract
s acros
s the wor
ld and m
ost
sig
niﬁc
antl
y in the US
, whic
h repo
rted s
ale
s of £602 m
illion
.
Inte
rnati
onal re
cord
ed sa
les of £287 mil
lion an
d Europ
e £69
million.
Established Pharmaceutic
als
Sa
les of E
stab
lishe
d Pha
rmac
eutic
als in th
e year wer
e £7
,
7
5
7
mill
ion, d
own 1
1
% AER
, 6% C
ER
.
Es
tabl
ished R
espi
rator
y pro
ducts d
ecre
ased 7
% AER
, 2%
CE
R to £4,
32
7 mill
ion. T
his inc
ludes t
he impa
ct of gen
eric
competition t
o
X
yzal
in Ja
pan, a
nd to
Advair
/Seretide
globally
.
Th
e decre
ase wa
s par
tia
lly of
fse
t by approx
imatel
y 6
percentage points
impact on
growth of f
av
ourable prior period
R
AR adjustments.
The remainder of t
he Established Pharmaceutic
als
port
folio
dec
rea
sed by 1
6% AER
, 1
1
% C
ER to £
3,4
30 milli
on on lowe
r
dem
and for a
ntibio
tics d
uring th
e COVI
D-
1
9 p
andem
ic per
iod,
the di
vestm
ent of GS
K’s ce
phalo
spor
in prod
ucts at th
e star
t of
the fo
urt
h quar
ter, and the im
pact of g
overnm
ent man
dated
changes increas
ing
use of generics in markets
including France,
Japan and China.
Financial performance
continued
Group ﬁn
ancial review
continued
64
GS
K Ann
ual R
epor
t 2021
Inﬂuenza
Fluarix/
FluLa
val
sale
s decr
eas
ed 7% AE
R, 2
% CER
, to £679
mill
ion as a r
esul
t of unfavour
able p
rior p
erio
d RA
R moveme
nts
in th
e US, pa
rti
ally o
ffs
et by high
er volum
e in the US a
nd stro
ng
southern hemisphere
demand in
Internat
ional.
Shingles
Shingrix
de
cre
ased 13% AER
, 9% C
ER to £1
,72
1 millio
n,
pri
mari
ly drive
n by lower de
mand in t
he US an
d Intern
ationa
l for
routine adult v
accination due t
o COVID-
1
9 vaccination
programme deploymen
t and d
isease circulation.
In Europe,
sa
les gr
owth wa
s dri
ven by Ger
many an
d launc
hes in th
e UK
,
Spa
in and I
taly.
Shingrix
wa
s sold i
n 1
7 c
ountr
ies
, inclu
ding 9
markets launched during 202
1
.
Established Vaccines
He
patiti
s vaccin
es sa
les wer
e down 20
% AER
, 1
6
% CER to
£460 million, adv
ersely impacted
by
de-prioritisation of
routine
US adult
vaccinat
ion, increased Hepatitis
B v
accine competition
and u
nfavoura
ble C
DC stock
pil
e movemen
ts in the US
, and by
COVID
-
1
9 relat
ed tra
vel restrictions
in Eu
rope and Int
ernational.
Sa
les of DTP
a-con
taini
ng vacc
ines (
Infanrix
,
Pediarix
and
Boostrix
) decr
eas
ed 4% AER bu
t grew 1
% CER
.
Infanrix/
Pediarix
sale
s decr
eas
ed 1
4% AE
R, 9
% CER to £
543 m
illion
,
reﬂ
ecti
ng lower ten
der volu
me in Euro
pe and I
ntern
ationa
l as
well a
s a chan
ge in rec
omme
ndati
on for the d
osing s
chedu
le in
Ge
rmany, par
tly of
fs
et by incr
eas
ed dem
and in th
e US.
Boostrix
sa
les gr
ew 9% AER
, 1
4
% CER to £
52
1 milli
on, lar
gely d
riven
by dem
and re
cover
y and ten
der volu
mes in I
nternat
ional
, as wel
l
as h
igher d
emand a
nd sha
re in the U
S.
Rotari
x
sa
les wer
e down 3% A
ER but up 1% CER to £
54
1
million, reﬂecting
demand recov
ery in Interna
tional.
Synﬂor
ix
sale
s dec
reas
ed by 1
1% AER
, 8% CE
R to £3
5
7
million, primarily
due t
o lo
wer
tender
demand in
Emerging
ma
rkets
.
M
MRV va
ccine
s sal
es were s
tabl
e at AER bu
t grew 4% CE
R to
£260
million, largely
driven
by h
igher demand
in Int
ernational.
Pandemic V
accines
Pan
demic va
ccin
es sa
les of £
44
7 mill
ion inc
luded £
44
4 milli
on
of pa
ndemi
c adjuva
nt sal
es to the U
S and Ca
nadia
n
governments.
Tu
r
n
o
v
e
r
(
£
b
n
)
£6
.
8bn
20% of Group t
urnover
AE
R gr
owth
(3)
%
CE
R gr
owth
2%
0
2
4
6
8
10
2021
2020
2019
6.8
7.0
7.2
Va
cc
in
es
V
accines turnover
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
Meningitis
961
1,029
(7)
(2)
Inﬂuenza
679
733
(7)
(2)
Shingles
1,
721
1,989
(13)
(9)
Established V
accines
2,9
70
3,231
(8)
(4)
6,331
6,9
82
(9)
(5)
Pandemic V
accines
4
47
–
–
–
6
,778
6,9
82
(3)
2
V
acc
ines tu
rnover in t
he year d
ecre
ase
d 3% at AER
, bu
t grew
2% C
ER to £6,77
8 mill
ion, pr
imar
ily dri
ven by pan
demic
adj
uvant s
ales
, par
tia
lly of
fset b
y lower dem
and for r
outine a
dult
vaccination
due t
o CO
VID
-
1
9 vaccinat
ion programme
deployment
and disease circula
tion across reg
ions, resulting
in
lower
Shingrix
an
d Hepa
titis vac
cine
s sal
es. U
nfavoura
ble US
pri
or per
iod R
AR a
djust
ments r
educe
d overa
ll V
acci
nes grow
th
by appro
ximat
ely 2
percentage points, particularly in
Fluarix/
Flu
Laval
an
d
Shingrix
whe
re the imp
act on p
roduc
t grow
th was
a dec
rea
se of 7% an
d a decr
eas
e of 2% res
pec
tively.
V
acc
ines tu
rnover exc
ludin
g pande
mic vac
cines d
ecre
ase
d 9%
AE
R, 5% C
ER to £6
,331 milli
on.
Meningitis
Me
ningi
tis sal
es de
crea
sed 7% A
ER
, 2% CE
R t
o £9
6
1 millio
n
driven primarily
by
unrepeated
Internat
ional t
ender v
olumes for
othe
r menin
gitis vac
cine
s.
Bexse
ro
sa
les wer
e stab
le at AER
,
but g
rew 5% CE
R t
o £6
50 milli
on, re
ﬂect
ing incr
eas
ed mar
ket
sha
re in the U
S.
Menv
eo
sa
les wer
e up 3% AE
R, 9
% CER to £272 milli
on,
pri
mari
ly drive
n by 2020 coho
rt c
atch-u
p vaccin
ations a
nd 202
1
hig
her dem
and, a
s well as i
ncre
ase
d market s
hare i
n the US
.
Financial performance
continued
GS
K Ann
ual R
epor
t 2021
65
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Oral health
Or
al hea
lth sa
les de
crea
sed 1
% AER
, bu
t grew 5% C
ER to
£2,
73
2 million.
Sensodyne
delivered
high sing
le digit
growth
reﬂecting underlying
brand strength,
continued
innov
ation
and
str
ong grow
th ac
ross key m
arkets i
nclud
ing the US
, Chi
na, I
ndia
and J
apan
. Gum he
alth a
lso del
ivere
d broad b
ased h
igh sin
gle
digi
t grow
th acr
oss key ma
rkets
. Dentu
re car
e grew low si
ngle
digi
ts dri
ven par
tly by a r
eturn to gr
owth i
n Q4 202
1
.
Pain relief
Pai
n relie
f sale
s incr
eas
ed 3% AE
R, 7% C
ER to £2,
2
76 millio
n.
Panadol
, whic
h beneﬁ
tted f
rom se
aso
nal dem
and in th
e last
quarter
, gre
w double
digits.
Vol
t
a
r
en
grew mid-single digits,
offsetting the
expect
ed short-
t
erm decrease
in t
he second
half
of the ye
ar in th
e US af
ter the intr
oduc
tion of pr
ivate la
bel
co
mpetit
ion ea
rlier i
n 202
1
.
E
xce
drin
deli
vered g
row
th of over
40% versus a
prior year
decrease reﬂecting supply
improvements.
Vitamins, minerals and supplements
Vi
tamin
s, min
eral
s and sup
pleme
nts sa
les wer
e stab
le at AER
but g
rew 4% CER to £1
,5
1
2 millio
n build
ing on the s
igni
ﬁca
nt
(
1
9% C
ER) grow
th in 2020
.
Centr
um
gre
w mid-
teens
percent
dri
ven by suc
ces
sful i
nnovatio
n, impr
oved sup
ply ca
pacit
y in the
US an
d conti
nued c
onsum
er focus o
n heal
th and wel
lnes
s.
Caltrate
grew mid
-sing
le digi
ts and
Emergen-
C
decreased
hig
h-sin
gle digi
ts reﬂ
ectin
g a par
ticul
arly c
halle
nging 2020
co
mpar
ator due to unp
rece
dented d
emand d
uring t
he ear
ly
st
ages of t
he pand
emic
.
Respiratory health
Res
pirato
ry h
ealth s
ale
s decr
eas
ed 6% AE
R, 1
% CE
R t
o
£1
,
1
3
3 millio
n. In Q
4 202
1
, c
old and ﬂ
u sal
es reb
ounde
d
str
ongly a
nd were ab
ove 20
1
9 l
evels in Eu
rope an
d sligh
tly
bel
ow 20
1
9 l
evels in the U
S. Fo
r the full ye
ar
, col
d and ﬂu
pro
ducts we
re down m
id-si
ngle di
gits as t
he H2 202
1 reb
ound
was i
nsuf
ﬁc
ient to of
fse
t the con
side
rabl
e decre
ase i
n the ﬁr
st
quarter of 2
02
1 which resulted from
historically
low demand
for
co
ld and ﬂu p
roduc
ts, ef
fe
ctivel
y halv
ing the gl
obal m
arket in th
e
period. Allergy products
grew m
id-single d
igits.
Digestive health and other
Di
gesti
ve hea
lth and oth
er bra
nds sa
les de
cre
ased 1% AER
but g
rew 4% CER to £1
,80
3 millio
n. Dig
esti
ve heal
th bran
ds
were u
p high-
singl
e digits w
ith pa
rti
cular
ly stro
ng grow
th in
Tu
m
s
an
d
Eno
. Sk
in hea
lth and S
moker
’
s hea
lth bra
nds wer
e
up mi
d-sin
gle digi
ts, of
fs
et par
tly by a d
ecre
ase in s
mall
,
non-strategic brands.
Consumer Healthcare turnover
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
Oral health
2,73
2
2,
753
(1)
5
Pain relief
2,
276
2,219
3
7
Vitamins
,
minerals and supplements
1,51
2
1,506
–
4
Respiratory health
1,1
33
1,209
(6)
(1)
Dige
stive
health and other
1,803
1,824
(1)
4
9,45
6
9,511
(1)
4
Brands divested/
under
review
15
1
522
(71)
(6
9)
9,607
1
0,033
(4)
–
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
US
3,1
79
3,40
8
(7)
(1)
Europe
2,46
8
2,619
(6)
(3)
International
3,96
0
4,006
(1)
4
9,607
1
0,033
(4)
–
Co
nsume
r Hea
lthc
are tur
nover in the ye
ar of £9
,607 milli
on
dec
rea
sed 4% AE
R and was s
tabl
e at CER re
ﬂec
ting dil
ution
fro
m dives
tments g
iven the c
ompl
etion of t
he por
tf
olio
rati
onali
satio
n at the end o
f Q
1 202
1
. O
n a two
-year CAG
R
sa
les exc
luding b
rand
s dives
ted unde
r review gr
ew 4% overall
de
spite the a
dver
se impa
ct of the C
OVI
D-
1
9 pan
demi
c.
Sa
les excl
uding b
rands d
iveste
d/under r
eview de
crea
sed 1
%
AE
R but inc
reas
ed 4% CER r
eﬂec
ting th
e under
lying s
treng
th
of br
ands ac
ros
s the por
t
folio an
d catego
rie
s and con
tinuin
g
grow
th in e
-co
mmerc
e. Ove
rall
, sale
s bene
ﬁted fr
om stro
ng
grow
th ac
ross a
ll categ
orie
s exclud
ing Res
pirato
ry h
ealth w
hich
was n
egati
vely imp
acted in Q1 202
1 by the hi
stori
call
y low col
d
and ﬂ
u sea
son. T
he dec
rea
se in co
ld and ﬂu s
ale
s resu
lted in an
app
roxim
ately 1
% drag on f
ull year g
row
th.
Internation
al sales excl
uding brands
divested/
under
review
grew
hig
h single d
igit on a C
ER ba
sis wi
th doub
le digit g
row
th in
eme
rging m
arkets i
nclud
ing Ind
ia, C
hina
, the M
iddle E
as
t and
Afr
ica
. E
xcludi
ng bra
nds dive
sted/und
er revi
ew
, US sa
les gr
ew
low si
ngle di
gits but E
urope
an sa
les wer
e stab
le on a C
ER
basis. Both regions
were particularly negat
ively impact
ed b
y the
his
toric
ally low c
old an
d ﬂu sea
son d
uring Q1 202
1
.
Tu
r
n
o
v
e
r
(
£
b
n
)
£
9.
6
b
n
28% of
Group turnover
AE
R gr
owth
(4)
%
CE
R gr
owth
0%
0
2
4
6
8
10
2021
2020
2019
9.6
10.0
9.0
Consumer H
ealthc
are
Financial performance
continued
Group ﬁn
ancial review
continued
66
GS
K Ann
ual R
epor
t 2021
Cost of sales
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
T
otal cost of s
ales
(1
1,603)
(11,
7
04)
(1)
2
Adjusted cost of sales
(1
0,
726)
(1
0,191)
5
8
T
o
tal co
st of sa
les a
s a perc
entag
e of turnove
r was 34
.0%
, 0.3
per
cent
age poi
nts lower at A
ER and 1.
1 per
cent
age poi
nts
lower i
n CER ter
ms com
pare
d with 2020. T
his pr
imari
ly
reﬂ
ecte
d lower wr
ite-d
owns in a num
ber of m
anufa
cturin
g sites
and t
he unwin
d in 2020 of the fa
ir mar
ket value up
lif
t on
inv
entory arising on
completion o
f the
Consumer Healthcare
Joi
nt V
enture w
ith P
ﬁze
r
.
E
xclud
ing the
se and oth
er Adju
sting i
tems, A
djuste
d cost o
f
sa
les a
s a perc
entag
e of turnove
r was 31
.4%
, 1
.6 perc
entag
e
poi
nts high
er at AER a
nd 0.8 p
erce
ntage p
oints h
igher at C
ER
compared with 2
02
0. This primarily
reﬂected hig
her pandemic
sa
les (
Xevu
dy
) a
s well as hi
gher s
upply c
hain c
osts in Vacc
ines
resulting from
low
er demand
and higher
inv
entory adjustmen
ts
and higher
commodity and freight
costs in Consumer
Healthcare, partly offset by price
beneﬁts in
Pharmaceuticals,
inc
luding t
he bene
ﬁt fro
m prio
r peri
od R
AR ad
justme
nts, a
further contribution from
restructuring sa
vings acr
oss all three
businesse
s
and fav
ourable mix in V
ac
cines.
Selling, general and administration
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
T
otal selling, general and
administration
(1
0,9
7
5)
(11,456)
(4)
–
Adjusted selling, general and
administration
(1
0,225)
(1
0,
717)
(5)
(1)
T
o
tal SG&
A c
osts a
s a perc
enta
ge of turn
over were 32
.2%
,
1
.4 per
cent
age poi
nts lower at A
ER and 1.8 per
cent
age poi
nts
lower a
t CER co
mpar
ed with 2020
. This in
clude
d incr
eas
ed
separation costs partly offset by lo
wer
restructuring charges.
E
xclud
ing Adju
sting i
tems, A
djuste
d SG&
A cos
ts as a
percentage of t
urnov
er w
ere 30.0%, 1
.
5
percentage points
lower a
t AER tha
n in 2020 and 1
.8 p
erce
ntage p
oints low
er on
a CE
R basi
s. Adj
usted SG
&
A cost
s decr
eas
ed 5% AER
, 1
%
CE
R which r
eﬂe
cted the ti
ght co
ntrol of o
ngoing c
osts a
nd
red
uced va
riab
le spe
nding ac
ros
s all thre
e busi
ness
es as a
re
sult of th
e COVI
D-
1
9 lo
ckdown
s, and t
he cont
inuing b
eneﬁ
t
of restructuring in
Pharmaceutica
ls, Consumer Healthcare and
support functions. The decrease also reﬂected a
fa
vourable
leg
al set
tlem
ent in 2021 comp
ared to in
crea
sed le
gal c
osts in
2020 as we
ll as on
e-of
f ben
eﬁts i
n pensi
ons and i
nsura
nce
whi
ch were p
ar
tly of
fset by t
he one-
of
f bene
ﬁt fro
m
re
struc
turin
g of post-r
etirem
ent be
neﬁts i
n 2020. Thi
s was
par
tl
y off
set by inc
rea
sed inve
stmen
t behin
d launc
hes in H
IV
and V
accines.
Researc
h and development
2021
£m
2020
£m
Growth
£%
Growth
CE
R%
T
otal research and development
(5,278)
(5,09
8)
4
7
Adjusted research and development
(4,
7
7
6)
(4,603)
4
8
T
o
tal R&
D expen
diture wa
s £5
,27
8 mill
ion (
1
5.
5% of turn
over
),
up 4% AE
R, 7% C
ER
, incl
uding an i
ncre
ase in i
mpai
rment
s
par
tl
y off
set by a de
crea
se in ma
jor re
struc
turin
g char
ges.
Adj
usted R&
D expen
diture w
as £
4,
77
6 millio
n (
1
4
.0% of
tur
nover
), 4% highe
r at AER
, 8% hi
gher at C
ER than i
n 2020.
Ph
armac
euti
cals R
&D expe
nditu
re was £
3,
5
78 mi
llion (20.
2%
of tur
nover)
, st
able at A
ER
, up 4% CER
, pri
maril
y drive
n by
inc
rea
sed inve
stment i
n our Sp
ecia
lty po
rt
foli
os, in
cludi
ng the
early stage research projects. Efﬁciency savings
continued fro
m
the implementation
of the
One R&D programme f
or
Ph
armac
euti
cals a
nd V
acc
ines a
s par
t of the S
epar
ation
preparation restructurin
g programme.
Th
e grow
th of the Sp
ecia
lty p
or
tfol
io in 202
1 was p
rima
rily
dri
ven by our t
wo prog
ramm
es for C
OVID
-
1
9 tre
atment (
Xevu
dy
and o
tilima
b
) a
long w
ith the oth
er otili
mab pro
gram
me for
rheumatoid arthritis, bepirovirs
en,
our HBV antisense
oligonucleotide and
depemokimab, our anti-IL5 for asthma. This
ha
s been p
ar
tly of
fset by r
educ
ed spe
nd on da
produ
stat du
e t
o
the completion o
f programmes. In Oncology,
there is
continued
inves
tment r
eﬂec
ting ou
r commi
tment to sy
ntheti
c letha
lity a
nd
in
Blenrep
, toge
ther wi
th bintr
afusp a
lfa
, whe
re we have
accelerated close-out costs for t
he programme but
this has
been largely offset by
a reduction
in spend
on felad
ilimab
followin
g the
decision t
o t
erminate
the
programme in April.
R&D e
xpend
iture in Vacc
ines wa
s £8
8
7 mill
ion (
1
3.
1
% o
f
tur
nover
), up 29% A
ER
, 34% CER
, re
ﬂect
ing inc
reas
ed
inves
tment i
n clini
cal pr
ogra
mmes fo
r menin
gitis an
d RSV and
inves
tment i
n our mR
NA pla
tfor
m, par
tl
y off
set by ef
ﬁc
iency
savings from
the implementation
of the
One Dev
elopment
pro
gram
me and var
iabl
e spen
ding as a r
esul
t of COVI
D
-
1
9
loc
kdowns
. R&D ex
pendi
ture in C
onsu
mer He
althc
are wa
s
£2
49 million.
Royalty income
Royal
ty in
come wa
s £4
1
9 mi
llion (2020 – £
3
1
8 mil
lion), up
32% A
ER, 32
% CER
, pri
mari
ly drive
n by high
er sal
es of
Gardasil.
Financial performance
continued
GS
K Ann
ual R
epor
t 2021
67
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Other operating income/(expense)
Net o
ther op
eratin
g expen
ses of £
4
7
6 mill
ion (2020 –
£
1
,62
4 mi
llion income
) primarily reﬂected account
ing charges
of £1
,
1
0
1 millio
n (
2020 – £
1
,234 mil
lion) aris
ing fro
m the
re-measurement of the
contingen
t consideration
liabilities
related
to
the acqu
isitions of
the
former Shionog
i-
ViiV
He
althc
are jo
int ventu
re and th
e forme
r Novar
tis Vacci
nes
bus
ines
s and the l
iabil
itie
s for the P
ﬁze
r put opti
on and P
ﬁ
zer
and Shionogi
preferent
ial dividends in
ViiV Healthcare. This
included a
re-measurement charge of
£
1
,026 m
illion (
2020 –
£
1
,
1
1
4 mill
ion
) f
or the
contingent
consideration
liability due
to Shi
onogi
, as a re
sult of th
e unwindi
ng of the di
scou
nt for
£3
80
million
and a ch
arge for
£646 mill
ion primarily from
adj
ustme
nts to sal
es fore
ca
sts and th
e set
tleme
nt with G
ilea
d
(
see p
age 58). Thi
s was pa
rtl
y off
set by a num
ber of a
sset
dis
posa
ls inc
luding t
he disp
osal o
f royalt
y righ
ts on
cabozantinib, the d
isposal of the cephalosporin business and
dis
posa
l of a numb
er of Co
nsume
r Hea
lthc
are br
ands an
d fair
valu
e uplif
ts on i
nvestm
ents. 2020 i
nclud
ed the ne
t proﬁ
t on
disposal of Horlicks
and other
Consumer Healthcare brands
of £2
,8
1
5 m
illio
n, par
tly o
ff
set by the re
lated lo
ss on s
ale of th
e
sha
res in H
indus
tan U
nilever of £
4
7
6 mill
ion.
Operating proﬁt
T
o
tal op
eratin
g proﬁ
t was £6
,20
1 mill
ion co
mpare
d with
£7
,7
83 mi
llion in 2020
. This pr
imar
ily re
ﬂecte
d an unfavou
rabl
e
co
mpari
son to the n
et proﬁ
t on dis
posa
l in Q2 2020 of H
orli
cks
and o
ther C
onsum
er bra
nds and r
esul
tant s
ale of sh
ares i
n
Hin
dust
an Unil
ever
. This wa
s par
tly o
ff
set by lower m
ajor
restructuring costs, low
er re-measurement charges
on the
co
ntinge
nt cons
ider
ation li
abili
ties an
d the unwi
nd in 2020 of
the fa
ir mar
ket value u
plif
t on inven
tory a
risi
ng on co
mpleti
on of
the C
onsu
mer He
althc
are J
oint V
entu
re with P
ﬁ
zer
.
E
xclud
ing the
se and oth
er Adju
sting i
tems, A
djuste
d oper
ating
pro
ﬁt was £
8,
806 m
illion
, 1
% l
ower than 2020 at A
ER
, but 9%
hig
her at CE
R on a turn
over incr
eas
e of 5% CER
. Th
e Adjus
ted
ope
rating m
argi
n of 25.8
% was 0.
3 perc
entag
e point
s lower at
AE
R, 0.
9 perc
entag
e point
s highe
r on a CER b
asis t
han in
2020.
Th
e incre
ase i
n Adjus
t
ed op
erati
ng proﬁ
t prim
aril
y reﬂe
cted the
beneﬁt from
incremental pan
demic sales (
Xevu
dy
and adjuvan
t
)
co
ntribu
ting ap
proxim
ately 6% A
ER
, 7% CER to Ad
justed
Op
eratin
g proﬁ
t grow
th. Ad
justed O
pera
ting pro
ﬁt als
o
beneﬁted from sales growth in Pharmaceuticals including the
ben
eﬁt fr
om pri
or per
iod R
AR ad
justm
ents an
d tight c
ontrol o
f
ongoing costs
including
reduced promotional
and v
ariable
spe
nding a
cros
s all thr
ee busi
nes
ses a
s a resul
t of the
COVID
-
1
9 lock
down
s, fav
ourable
legal settlement
s compared
to inc
reas
ed leg
al co
sts in 2020 an
d beneﬁ
ts fro
m conti
nued
re
struc
turin
g acros
s the bu
sines
s. T
his was p
ar
tly of
fse
t by
lower s
ale
s in V
acc
ines
, prim
arily
S
hingrix
, higher
supply chain
co
sts in Vacci
nes and C
ons
umer H
ealth
care
, dives
tment
s in
Co
nsume
r Hea
lthc
are and i
ncre
ased i
nvestm
ent in R&
D acros
s
V
accines and Pharmaceuticals.
Contingent considerat
ion cash payment
s which are
made t
o
Shi
onogi a
nd other c
ompa
nies r
educ
e the bal
ance s
heet li
abili
ty
and h
ence a
re not re
cord
ed in the i
ncome s
tateme
nt.
T
o
tal co
ntinge
nt cons
ider
ation c
ash p
a
yme
nts in 2021
amo
unted to £
856 mill
ion (2020 – £8
85 mill
ion
). Thi
s inclu
ded
ca
sh paym
ents ma
de to Shio
nogi of £
826 milli
on (
2020 –
£
858 mil
lion).
Adjusted operating proﬁt by business
Ph
armac
euti
cals o
perat
ing pro
ﬁt was £
4,6
8
1 millio
n, up 1
2
%
AE
R, 24% CER on a t
urnover i
ncre
ase of 1
0% C
ER
. The
ope
rating m
argi
n of 26.4% was 1.9 perc
enta
ge poin
ts highe
r at
AE
R than in 2020 a
nd 3.
3 perc
entag
e point
s highe
r on a CER
basis. This primarily reﬂected price
beneﬁts in Pharmaceuticals,
inc
luding t
he bene
ﬁt fro
m a prio
r peri
od R
AR ad
justme
nt,
red
uced s
upply c
hain c
osts
, the tig
ht contr
ol of ong
oing co
sts
,
sho
rt te
rm bene
ﬁts to ch
ange
s in ways of wor
king
, a favoura
ble
leg
al set
tlem
ent in 2021 comp
ared to in
crea
sed le
gal c
osts in
2020 and t
he conti
nuing b
eneﬁ
t of res
tructu
ring
. This wa
s par
tly
of
fse
t by suppo
rt to la
unche
s in HI
V and in
crea
sed i
nvestme
nt
in R&
D.
V
acc
ines o
perat
ing pro
ﬁt was £2
,256 mil
lion, d
own 1
7% A
ER,
1
1% CER on 2
% turnover i
ncre
ase at C
ER
. The op
erati
ng
mar
gin of 33
.3
% was 5.6 p
erce
ntage p
oints lo
wer at AER th
an
in 2020 an
d 4.8 pe
rcen
tage po
ints lowe
r on a CER b
asi
s. Thi
s
was primarily driv
en b
y higher
supply chain
costs resulting
from
hig
her invento
ry ad
justm
ents an
d lower de
mand, a
long w
ith
hig
her R&D s
pend to su
ppor
t key str
ategic p
rior
ities a
nd
inc
rea
sed SG&
A i
nvestme
nt to supp
ort b
usine
ss gr
owth
, par
tly
of
fse
t by highe
r royalt
y inco
me and pa
ndem
ic adju
vant
beneﬁcial mix.
Consumer Healthcare operating
proﬁt was £2,2
39 mil
lion, up
1
% AER
, 9% C
ER on st
able tur
nover at C
ER
. The op
eratin
g
mar
gin of 23
.3% wa
s 1
.
2 perc
enta
ge poin
ts highe
r at AER a
nd
2.0 p
erce
ntage p
oints hi
gher o
n a CER ba
sis th
an in 2020. Th
is
primarily reﬂected sales gro
wth of contin
uing brands, price
increases and fav
ourable m
ix, synergy deliv
ery from the Pﬁzer
Joi
nt V
enture I
ntegr
ation an
d tight c
ost co
ntrol
, par
tial
ly of
fset by
the i
mpact o
f dives
tments (
1
.
2 per
cent
age poin
ts
), incre
ase
d
advertising and promo
tion in
vestment,
increased commodity
and f
reigh
t cost
s and inves
tment i
n manuf
actur
ing site
s.
Financial performance
continued
Group ﬁn
ancial review
continued
68
GS
K Ann
ual R
epor
t 2021
Net ﬁnance costs
Finance income
2021
£m
2020
£m
Interest and other income
26
39
Fair value movements
2
5
28
44
Finance expense
Interest expense
(7
46)
(822)
Unwinding of discounts on provisions
(2)
(3)
Remeasurements and fair value movements
–
(4)
Finance expense on lease liabilities
(31)
(4
0)
Other ﬁnance expense
(5)
(23)
(784)
(8
92)
T
o
tal net ﬁ
nanc
e cost
s were £756 milli
on comp
ared w
ith
£
848 mil
lion in 2020. A
djuste
d net ﬁna
nce c
osts wer
e
£753 milli
on com
pare
d with £
844 mi
llion i
n 2020. The
decrease is primarily as a
result of
reduced int
erest expense
fro
m lower de
bt levels
, favoura
ble movem
ents in fo
reig
n
exch
ange ra
t
es
, a prem
ium pai
d on the ea
rly re
payme
nt and
reﬁ
nanc
ing of bo
nd debt i
n 2020 and red
uced i
nteres
t on ta
x
par
tl
y off
set by lowe
r intere
st inc
ome on over
sea
s ca
sh pos
t
-
clo
sing of t
he dives
tment o
f Horl
icks an
d other C
onsu
mer
He
althc
are nu
triti
on prod
ucts in I
ndia a
nd a numb
er of othe
r
countri
es.
Share of after tax proﬁts of associates and joint
ventures
Th
e share o
f after t
a
x proﬁ
ts of as
soci
ates and j
oint ventu
res
was £
33 m
illion (2020 – £
33 mill
ion).
Loss on disposal of interests in associates
Th
e net los
s on dis
posa
l of intere
sts in a
sso
ciates w
as
£
36 milli
on, pr
imar
ily dri
ven by a los
s on dis
posa
l of our
inter
est in t
he as
soci
ate Innovi
va Inc
.
Proﬁt befor
e tax
T
a
kin
g acco
unt of net ﬁ
nanc
e cost
s, the sh
are of p
roﬁts o
f
as
soci
ates and l
oss o
n dispo
sal of i
nteres
t in as
soci
ates, p
roﬁt
before taxation was
£5,442 mi
llion compared wit
h £6,968
mill
ion in 2020.
T
a
x
ation
2021
£m
2020
£m
U
K current year c
harge
13
2
30
Rest of world current year charge
1,04
4
1,
177
Charge in respect of prior periods
17
2
66
T
otal current t
axation
1,348
1,27
3
T
otal deferred t
axation
(1,002)
(6
93)
T
axation on tot
al proﬁts
346
580
Th
e charg
e of £3
46 milli
on rep
rese
nted an ef
fec
tive ta
x rate o
n
T
o
tal re
sults of 6
.4% (20
20 – 8.
3%
) and r
eﬂec
ted the di
ffe
rent
ta
x ef
fec
ts of the var
ious Ad
justi
ng items
, incl
uding a c
redit o
f
£397 mil
lion resultin
g from t
he re
valuatio
n of d
eferred tax
as
sets fo
llowin
g enact
ment of a
n incre
ase i
n the hea
dline r
ate of
UK c
orp
oratio
n ta
x (
ef
fecti
ve 1 Apri
l 202
3). 2020 reﬂe
cted the
dis
posa
l of Hor
licks a
nd othe
r Cons
umer br
ands a
nd the
sub
sequ
ent disp
osa
l of shar
es re
ceive
d in Hind
usta
n Unileve
r
.
T
a
x on A
djuste
d proﬁ
t amoun
t
ed to £1
,4
1
5 millio
n and
rep
rese
nted an ef
fec
tive Ad
justed t
ax r
ate of 1
7
.
5% (
2020 –
16
.
0
%)
.
Issues related t
o taxation are
described in Not
e 1
4, ‘T
axation’ in
the A
nnual R
epor
t 202
1
. The G
roup co
ntinue
s to believe i
t has
made adequa
te p
rovision f
or the
liabilities
likely
to
arise from
per
iods w
hich a
re open a
nd not yet ag
reed by t
ax a
uthor
itie
s.
Th
e ultimate l
iabil
ity fo
r such mat
ters m
ay var
y from th
e amoun
ts
provided and
is dependen
t upon t
he out
come of
agreements
wit
h releva
nt ta
x autho
ritie
s.
Non-controlling inter
ests
Th
e alloc
ation o
f T
ota
l earn
ings to non
-con
trolli
ng intere
sts
amo
unted to £7
1
1 mi
llion (2020 – £6
39 milli
on
). The i
ncrea
se
was primarily du
e t
o an increased allocat
ion of
Consumer
He
althc
are J
oint V
entu
re proﬁ
ts of £
460 mil
lion (2020 –
£
3
7
4 mil
lion) and an i
ncre
ased a
lloc
ation of V
iiV H
ealth
car
e
pro
ﬁts of £1
9
6 milli
on (
2020 – £223 milli
on
), incl
uding r
educ
ed
credits for
re-measurement of
contingent
consideration l
iabilities.
The allocation
of Adjust
ed earnings
to
non-controllin
g int
erests
amo
unted to £1
,
006 mi
llion (2020 – £1
,0
3
1 milli
on
). The
reduction in
allocation primarily
reﬂected a
reduced allocation
of Vi
iV He
althc
are pr
oﬁts o
f £4
38 milli
on (2020 – £4
7
4 mi
llion),
par
tl
y off
set by hig
her net p
roﬁt
s in some o
f the Gro
up’
s other
entities with
non-controll
ing int
erests. The allocation
of Consumer
He
althc
are J
oint V
entu
re proﬁ
ts was £
5
1
5 mill
ion (2020 – £5
1
5
million
).
Earnings per share
T
o
tal EP
S was 87
.6p c
ompa
red wi
th 1
1
5.5
p in 2020. Thi
s
primarily reﬂected an
unfa
vourable
comparison to
the n
et
pro
ﬁt on di
spos
al in Q
2 2020 of Horl
icks an
d other C
onsu
mer
br
ands pa
rt
ly of
fset by th
e relate
d loss o
n sale o
f the sha
res in
Hin
dust
an Unil
ever
, par
tly of
fs
et by a cre
dit of £
397 millio
n to
T
a
xation
in 2
02
1 resulting from t
he re
valuation
of de
ferred tax
as
sets fo
llowin
g enact
ment of a
n incre
ase i
n the hea
dline r
ate
of U
K corp
orati
on ta
x (
ef
fecti
ve 1 Apr
il 2023
), lower ma
jor
restructuring costs and
low
er remeasurement charges
on the
contingent
consideration l
iabilities.
Adj
usted EP
S was 1
1
3.2p c
ompar
ed wit
h 1
1
5.9p i
n 2020,
dow
n 2% AER b
ut up 9% C
ER
, on a 9% C
ER incr
eas
e in
Adjusted
operating
proﬁt primarily reﬂecting
incremental
pan
demic s
ale
s, sa
les in
crea
ses i
n Phar
mace
utic
als, t
ight co
st
co
ntrol an
d favoura
ble leg
al set
tlem
ents an
d lower inter
est
co
sts, p
ar
tly of
fset b
y lower sa
les in Vacc
ines
, prim
arily
Shingrix
, hig
her sup
ply cha
in cos
ts in Vaccin
es, i
ncrea
sed R
&D
inves
tment a
nd a high
er ef
fecti
ve ta
x rate. T
he cont
ribut
ion to
growth from COVID-
1
9 sol
utions w
as approxima
tely
8% AER,
9% C
ER
.
Financial performance
continued
GS
K Ann
ual R
epor
t 2021
69
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Dividends
Th
e Boar
d has de
clar
ed four in
t
eri
m divi
dends r
esul
ting in a tot
al
div
idend f
or the yea
r of 80 pe
nce, i
n line wi
th the div
iden
d decla
red
for 2020. S
ee note 1
6 to the ﬁna
ncia
l statem
ents, ‘
Div
iden
ds’
.
Dividend policy
On 23 J
une 202
1
, at the new GS
K Inves
tor Upd
ate, GS
K set out
that f
rom 2022 a prog
res
sive di
viden
d polic
y will be i
mplem
ented
.
Th
e divid
end pol
icy, the total ex
pec
t
ed c
ash di
strib
ution
, and the
re
spec
tive div
idend p
ay-out r
atios fo
r new GS
K and new
Consumer Healthcare remain unchanged.
GS
K expe
cts to dec
lare a 27p per sha
re div
idend p
ayable by th
e
cur
rent gr
oup for th
e ﬁrst h
alf. Th
is com
pris
es 22 penc
e per sh
are
for new G
SK an
d 5 penc
e per sh
are rep
rese
nting C
onsu
mer
He
althc
are du
ring th
e ﬁrst h
alf wh
ilst p
art o
f the gro
up. For th
e
se
cond ha
lf of 2022, new G
SK co
ntinue
s to expec
t to decl
are a
22p per s
hare di
vide
nd. As p
reviou
sly co
mmuni
cated, n
ew GSK
woul
d expec
t to decla
re a div
idend o
f 45 pen
ce per s
hare fo
r
2023.
Fol
lowing s
epar
ation
, the div
idend p
olicy fo
r the new C
onsum
er
He
althc
are c
ompa
n
y wil
l be the re
spon
sibili
ty of i
ts Boa
rd of
Dir
ector
s and is e
xpec
ted to be gui
ded by a 30 to 50 p
er cent
pay-
out rati
o. On thi
s bas
is, we now ex
pect a s
eco
nd-ha
lf
dividend from
the ne
w Consumer Healthcare company
equivalen
t
to a payout o
f aroun
d 3 penc
e per sha
re, su
bject to i
ts Boa
rd’s
dec
isio
ns on the in
tra-yea
r pha
sing of di
vide
nd payme
nts. T
his
exp
ected di
stri
bution p
er sha
re for the s
eco
nd half o
f the year h
as
be
en adju
sted fro
m that hig
hlighte
d at the GS
K Inves
tor Update
in Ju
ne 202
1 to reﬂe
ct the tot
al numb
er of sha
res (up to circ
a
9.25 b
illion s
hare
s
) in the new C
onsu
mer He
alth
care c
ompa
ny
that a
re expe
cted to be i
n issu
e upon de
merg
er
. In Jun
e 202
1 the
pla
nning a
ssum
ption fo
r the Inve
stor Upd
ate reﬂ
ected on
ly the
GS
K shar
es in is
sue at th
at time (circ
a 5 billio
n shar
es
).
In a
ggreg
ate, this wou
ld rep
rese
nt on the fu
ll year 2022 ba
sis
the e
quival
ent of a Gr
oup div
iden
d of aroun
d 5
2p per s
hare
.
Dividends pay
able by
Consumer Healthcare will o
nly be
receivable by
shareholders who remain
inv
ested in
Consumer
Healthcare post-separat
ion and a
t the
appropriat
e record da
tes.
Guidance and Outlook
In 2022 we ex
pect to c
ontinu
e to delive
r on our str
ategic
pri
orit
ies
. W
e plan to in
crea
se ta
rgeted i
nvestme
nt in R&D, to
buil
d on and i
n
ves
t behin
d our top lin
e momen
tum for key grow
th
drivers and t
o del
iver t
he demerger
of our
Consumer Healthcare
bus
ines
s in mid
-year. Ass
uming gl
obal e
conom
ies an
d heal
thca
re
syste
ms app
roach n
ormal
ity a
s the yea
r progr
ess
es, we e
xpec
t
sa
les of S
peci
alt
y Medi
cine
s t
o grow a
pproxi
mately 1
0% at C
ER
and s
ale
s of Gen
eral M
edic
ines to sh
ow a sligh
t decr
ease
,
primarily reﬂecting increased genericisation
of established
Res
pirato
ry p
roduc
ts. Vacci
nes s
ales a
re expe
cted to grow at a
low tee
ns perc
enta
ge at CER f
or the yea
r as a wh
ole. Ho
wever
,
governmen
ts’
prioritisation
of COVID-
1
9 v
accination
programmes
and o
ngoin
g meas
ures to c
onta
in the pa
ndemi
c are exp
ected to
result in some
continued
disruption
to
adult im
munisations, with
the i
mpact we
ighted to th
e ﬁrs
t half. Fo
r
Shingrix
, desp
ite the
potential for shor
t-
term pande
mic disruption
,
we continue to
expect st
rong d
ouble-digit
gro
wth and record
annual
sales based
on strong
demand in
existing
markets
and geographical
expansion.
Reﬂ
ecti
ng thes
e factor
s, in 2022 fo
r new GSK we e
xpec
t sale
s to
grow b
etwe
en 5% to 7% at CE
R and Adj
usted op
erati
ng proﬁ
t to
grow b
etwe
en 1
2% to 1
4% at CER a
s comp
ared w
ith 202
1
. This
inc
lude
s the futur
e bene
ﬁt in roya
lty i
ncome f
rom the s
ettl
ement
and l
icens
e agre
ement w
ith Gil
ead Sc
ienc
es, I
nc. (Gil
ead)
ann
ounce
d on 1 Feb
ruar
y 2022.
In J
une 202
1
, GSK a
nnounc
ed that i
t expe
cted new GS
K to
del
iver sa
les gr
owth a
nd adju
sted op
eratin
g proﬁ
t grow
th of mor
e
tha
n 5% and mo
re than 1
0%
, res
pec
tively, CAGR at c
onsta
nt
exch
ange ra
t
es ove
r the ﬁve ye
ar per
iod 202
1
-
2026 (
with 2021
as th
e bas
e year). Thes
e ﬁnan
cial o
utloo
ks exclud
e any
contribution fr
om COVID-
1
9 relat
ed re
venues. New
GSK
exp
ects to im
prove adj
usted op
erati
ng marg
in from t
he mid-20s
%
in 2021 to over 30% by 2026 a
nd ca
sh gene
rated fr
om
ope
ratio
ns is exp
ected to exc
eed £1
0 b
illio
n by 2026. By 2031
,
new GS
K aim
s to delive
r sale
s of more t
han £
33 bil
lion (at
co
nstan
t exchan
ge rates).
Medium term
outlooks w
ere pro
vided for
Consumer Healthcare
at a Ca
pita
l Mar
kets Day sch
edule
d for 28 Feb
ruar
y 2022. U
ntil
suc
h time a
s the form
al cri
teria fo
r treati
ng Co
nsumer H
eal
thca
re
as a ‘
Dis
conti
nued op
erati
on’ have been s
atis
ﬁed (curre
ntly
exp
ected i
n Q2 2022
), GS
K will co
ntinue to p
rese
nt the
Consumer Healthcare business within ‘Contin
uing opera
tions
’
and w
ill co
nsolid
ate the bus
ines
s for re
por
ting pu
rpos
es until t
he
demerger has complet
ed.
In 2022, b
ase
d on know
n bind
ing agre
ement
s from gove
rnme
nts
we exp
ect tha
t COVI
D-
1
9 so
lutio
ns will c
ontri
bute a simi
lar sa
les
level to 2021
, but a sub
stant
ially r
educ
ed pro
ﬁt con
tribu
tion due
to the in
crea
sed p
ropor
tio
n of lower ma
rgin
Xe
vud
y
s
al
e
s.
We
exp
ect thi
s to reduc
e new GS
K Adjus
ted Ope
rating p
roﬁt g
row
th
(inc
luding C
OVI
D-
1
9 so
lutio
ns in both ye
ars) by bet
ween 5% to
7%
. W
e cont
inue to dis
cuss f
ur
ther op
por
tuniti
es wit
h
governments.
Financial performance
continued
Group ﬁn
ancial review
continued
70
GS
K Ann
ual R
epor
t 2021
Adjusted results r
econciliation
31 December 2021
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
Separation
costs
£m
Adjusted
results
£m
T
urnover
34,114
34,114
Cost of sales
(11,603)
701
(33)
154
28
27
(1
0,
726)
Gross proﬁt
22,511
701
(33)
154
28
27
23,38
8
Selling, general and administration
(1
0,975)
426
25
17
282
(1
0,225)
Research and development
(5,27
8)
10
1
355
46
(4,
77
6)
Royalty income
419
419
Other operating (expense)/income
(
476
)
1,1
0
6
(662)
32
–
Operating proﬁt
6,20
1
802
322
626
1,15
9
(618)
314
8,8
06
Net ﬁnance costs
(756)
2
1
(753)
Loss on disposal of interest in associates
(36)
36
–
Share of after-tax proﬁts of associates and joint ventures
33
33
Proﬁt before tax
ation
5,442
802
322
628
1,159
(581)
314
8,08
6
T
axation
(34
6)
(15
9)
(81)
(114)
(196)
(
470)
(49)
(1,415)
T
ax rate
6.4%
17
.5%
Proﬁt after tax
ation
5,09
6
643
241
514
9
63
(1,051)
265
6,671
Proﬁt attributable to non-controlling interests
711
295
1,00
6
Proﬁt attributable to shareholders
4,3
85
643
241
514
668
(1,051)
265
5,665
Earnings per share
8
7
.6p
12.9p
4.8p
1
0.3p
13.3p
(21.0)p
5.3p
113.2p
W
eighted average number of shares (millions)
5,003
5,003
Adjusted results r
econciliation
31 December 2020
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
Separation
costs
£m
Adjusted
results
£m
T
urnover
34,
099
34,
099
Cost of sales
(11,
704)
699
31
6
67
116
(1
0,191)
Gross proﬁt
22,395
699
31
6
67
116
23,9
08
Selling, general and administration
(11,45
6)
1
18
659
(23)
16
68
(1
0,
717)
Research and development
(5,098)
75
214
20
6
(4,603)
Royalty income
318
318
Other operating (expense)/income
1,624
1,215
(2,839)
–
Operating proﬁt
7,
7
8
3
77
5
263
1,532
1,30
8
(2,823)
68
8,90
6
Net ﬁnance costs
(848)
2
2
(8
44)
Share of after-tax proﬁts of associates and joint ventures
33
33
Proﬁt before tax
ation
6,968
77
5
263
1,534
1,308
(2,821)
68
8,095
T
axation
(58
0)
(15
0)
(4
7)
(292)
(229)
17
(14)
(1,295)
T
ax rate
8.3%
16.0%
Proﬁt after tax
ation
6,38
8
625
216
1,242
1
,
079
(2,804)
54
6,8
00
Proﬁt attributable to non-controlling interests
639
392
1,031
Proﬁt attributable to shareholders
5
,74
9
625
216
1,242
6
87
(2,804)
54
5
,7
6
9
Earnings per share
115.5p
12.6p
4.4p
25.0p
13.8p
(5
6.5)p
1.1p
115.9p
W
eighted average number of shares (millions)
4
,
976
4
,976
Adjust
ing ite
ms
GS
K Ann
ual R
epor
t 2021
71
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Major restructuring and integration
Within the
Pharmaceutic
als
sector
,
the hig
hly regulat
ed
manufacturing
operations
and supply
chains and
long lif
e
cycle of
the business mean tha
t restructuring programmes,
par
ti
cular
ly thos
e that invol
ve the rati
onali
satio
n or clo
sure of
man
ufact
uring or R
&D site
s are like
ly to take s
everal ye
ars
to complet
e.
Major restructu
ring cost
s are
those
relat
ed t
o speciﬁc
Board-approved
Major restructuring prog
rammes and are
excluded
from Adjust
ed results. Major restructu
ring
programmes
, includin
g int
egration costs following ma
terial
acq
uisit
ions
, are tho
se that a
re stru
ctura
l and ar
e of a sign
iﬁc
ant
sc
ale wh
ere the c
osts o
f indiv
idual o
r relate
d proje
cts exce
ed
£25
mill
ion. Other
ordinary course sm
aller
-scale
restructurin
g
costs are
retained
within
T
otal and
Adju
sted
results.
T
o
tal M
ajor re
stru
cturi
ng char
ges in
curre
d in 202
1 were
£626 mil
lion (2020 – £
1
,532 mil
lion), analy
sed a
s follows:
2021
2020
Cash
£m
Non-
cash
£m
T
otal
£m
Cash
£m
Non-
cash
£m
T
otal
£m
20
18 major
restructuring
programme
(incl. T
esaro)
18
9
27
10
5
2
10
315
Consumer
Healthcare Joint
V
enture integration
programme
17
3
11
18
4
29
8
28
326
Separation
Preparation
restructuring
programme
371
59
43
0
625
216
841
Combined
restructuring
and integration
programme
8
(23)
(1
5)
39
11
50
570
56
626
1,0
6
7
4
65
1,532
Cash charges of £3
7
1
million
under the
Separation Preparatio
n
programme primarily arose
from restructuring
of some
adm
inistr
ative an
d centr
al man
ufact
uring f
unctio
ns as wel
l as
commercial pharmaceuticals and R
&D functions. The n
on-cash
cha
rges o
f £59 mil
lion pr
imar
ily reﬂ
ecte
d write
-down o
f ass
ets
in ad
minis
trative l
ocati
ons and R
&D site
s.
Cash charges of £
1
73 mi
llion on
the Consumer
Healthcare
Joint V
enture programme primarily
relat
ed t
o sev
erance and
integ
ratio
n cost
s. Th
e non-c
ash c
redi
t in the C
ombin
ed
restructuring and
integ
ration programme
primarily reﬂected
a
write ba
ck on
disposal of
a sit
e.
T
o
tal ca
sh paym
ents ma
de in 202
1 were £753 mi
llion (2020
– £73
7 milli
on
), £4
34 mill
ion (2020 – £
1
52 mil
lion) relat
ing to
the Separation
Preparation restructurin
g programme, a
further
£1
7
6 milli
on (2020 – £29
1 milli
on
) relat
ing to the C
onsum
er
Healthcare Joint V
enture int
egration pr
ogramme, £95 million
(2020 – £
1
79 milli
on
) unde
r the 20
1
8 major r
estr
uctur
ing
programme including the
settlement of certain charges accrued
in pr
evious q
uar
ters a
nd £4
8 milli
on (
2020 – £1
1
5 millio
n
) for
the existing Combined restructuring and int
egration programme.
Th
e analy
sis of M
ajor r
estr
ucturi
ng cha
rges by bu
sine
ss was a
s
follows:
2021
£m
2020
£m
Pharmaceuticals
233
671
V
accines
(40)
214
Consumer Healthcare
19
6
374
389
1,259
Corporate and central functions
237
273
T
otal Major restructuring charges
626
1,532
Th
e analy
sis of M
ajor r
estr
ucturi
ng cha
rges by in
come
st
atement li
ne was a
s follows:
2021
£m
2020
£m
Cost of sales
15
4
6
67
Selling, general and administration
426
65
9
Research and development
46
20
6
Other operating income/(expense)
-
–
T
otal Major restructuring charges
626
1,532
Th
e beneﬁ
t in the ye
ar fro
m restr
uctur
ing pro
gram
mes wa
s
£0.
7 billion,
the ben
eﬁt from the
Separation Preparation
re
struc
turin
g progr
amme wa
s £0.
3 billi
on, th
e beneﬁ
t from t
he
Consumer Healthcare Joint V
enture int
egration
was £0.2 billion
and t
he bene
ﬁt fro
m the 201
8 Re
struc
turin
g progr
amme wa
s
£0.2 billion.
Th
e 20
1
8 ma
jor re
struc
turin
g progr
amme
, inclu
ding T
esa
ro,
ha
s cost £1
.5 bil
lion to the e
nd of 202
1
, with c
ash c
osts of
£0
.6 billi
on and no
n-ca
sh co
sts of £
0.9 bill
ion, a
nd has
del
ivere
d annua
l saving
s of arou
nd £0.
5 billi
on by the en
d of
202
1 (at 20
1
9 ra
tes
). The
se savi
ngs were f
ully re
-inves
ted to
help fund
targeted
increases in R&D and
commercial support
of new
products. The programme is substantially complet
e and
the
refore G
SK wi
ll cea
se ex
terna
l repo
rti
ng of tota
l cost
s and
ben
eﬁts o
f the 20
1
8 major r
estr
uctur
ing pro
gram
me from 2022
onwards.
Th
e compl
etion o
f the Co
nsume
r Heal
thca
re Join
t V
enture w
ith
P
ﬁzer
has realised substantial
cost synergies and
has largely
del
ivere
d the expe
cted tot
al annu
al cos
t saving
s of £0.
5 billi
on
by 202
1
. The c
ash c
osts ar
e expe
cted to be £
0.
7 bill
ion and
non
-ca
sh cha
rges ex
pecte
d to be £0.
1 billi
on, pl
us addi
tional
ca
pita
l expen
diture o
f £0.
2 billio
n. Up to 25% of th
e cost
savi
ngs ar
e intende
d to be reinve
sted in t
he busi
ness to
support innovat
ion and
other g
rowth opportunities.
Adjusting items
continued
Group ﬁn
ancial review
continued
72
GS
K Ann
ual R
epor
t 2021
Th
e Group i
nitiate
d in Q
1 2020 a two
-year S
epar
ation
Preparation programme t
o prepare
for
the separation
of GSK
into t
wo comp
anie
s: new GSK
, a bi
ophar
ma com
pany wi
th an
R&D approach f
ocused on
science relat
ed to
the
immune
syste
m, the us
e of gen
etics a
nd new tec
hnolog
ies
, and a new
leader in Consumer
Healthcare. The programme aims
to
:
–
Dr
ive a com
mon app
roac
h t
o R&D w
ith imp
roved ca
pita
l
allocation
–
Ali
gn and im
prove the c
apa
biliti
es and e
fﬁ
cien
cy of glob
al
support functions t
o support new GSK
–
Further optimise the su
pply chain and
product port
folio
,
inc
luding t
he dive
stment o
f non-c
ore a
sset
s.
–
A strat
egic re
view o
f prescription
dermatology
is underway
–
Prepare Consumer Healthcare to
operate
as a standalone
co
mpany
Th
e progr
amme c
ontinu
es to tar
get del
iver
y of £0
.8 bill
ion of
ann
ual sav
ings by 2022 and £1
.0 bill
ion by 2023, w
ith total
co
sts es
timated at £
2.4 bil
lion, o
f whic
h £
1
.6 b
illio
n is expe
cted
to be c
ash c
osts
. The pr
ocee
ds of dive
stme
nts have lar
gely
cove
red the c
ash c
osts o
f the prog
ramm
e.
T
ransaction-r
elated adjustments
T
ransaction-related adjustmen
ts result
ed in
a net
charge of
£1
,
1
59 m
illion (2020 – £1
,
308 m
illion). Thi
s inclu
ded a net
£
1
,
1
0
1 mil
lion accounti
ng charge
for the
re-measurement of
the
contingent
consideration l
iabilities relat
ed t
o t
he acquisition
s of
the fo
rmer S
hiono
gi-ViiV H
eal
thca
re joint ve
nture an
d the for
mer
Nova
rti
s V
acci
nes bus
ines
s and th
e liabi
litie
s for the P
ﬁze
r put
option and
P
ﬁz
er and
Shionogi pref
erential d
ividends in ViiV
Healthcare.
Charge/(cr
edit)
2021
£m
2020
£m
Contingent consideration on former Shionogi-V
iiV
Healthcare Joint V
enture (including Shionogi
preferential dividends)
1,026
1,114
V
iiV Healthcare put options and Pﬁzer preferential
dividends
48
(52)
Contingent consideration on former Novartis
V
accines business
27
172
Release of fair value uplift on acquired Pﬁzer
inventory
–
91
Other adjustments
58
(1
7)
T
otal trans
action-related c
harges
1,1
59
1,3
08
The £
1
,026
million
charge relati
ng t
o the
contingent
consideration f
or the
former Shionog
i-
ViiV Healthcare joint
ventu
re repr
esen
ted an inc
rea
se in the va
luatio
n of the
contingent
consideration due
to
Shionogi,
as a result o
f the
unwi
nd of the di
scou
nt for £
380 mi
llion a
nd a char
ge of £6
46
million
primarily from a
djustments
to
sales forecasts and the
set
tlem
ent wi
th Gile
ad as wel
l as upd
ated excha
nge rate
assumptions. The £48 million
charge relati
ng t
o the
ViiV
Healthcare put option
and Pﬁzer preferential
dividends
rep
rese
nted an in
crea
se in th
e valuati
on of the p
ut optio
n as a
re
sult of th
e sett
lemen
t with G
ilead
, of
fset by lowe
r ca
sh and
updated
exchange
rat
e assumptions.
The ViiV Healthcare contingent
consideration
liability is fair
valu
ed unde
r IFR
S. T
he potenti
al imp
act of th
e COVI
D-
1
9
pan
demic r
emai
ns unce
rt
ain an
d at 3
1 Dece
mber 2021
, it has
be
en as
sumed th
at ther
e will be n
o signi
ﬁca
nt impa
ct on the
long-t
erm val
ue of
the liabil
ity.
This position
remains un
der
revi
ew and the a
mount o
f the liab
ilit
y will b
e updated i
n futur
e
qua
rte
rs as f
urt
her info
rmati
on on the im
pact of t
he pand
emic
be
come
s availab
le. An ex
plan
ation of t
he acc
ounting f
or the
non
-cont
rollin
g intere
sts in V
iiV He
alth
care i
s set out o
n
p
a
g
e
5
7.
Divestments, signiﬁcant legal charges and other items
Di
vestm
ents and o
ther ite
ms also i
nclud
ed gai
ns from a nu
mber
of a
sset di
spos
als
, inclu
ding the d
ispo
sal of r
oyalt
y right
s on
cabozantinib
, dis
posal of
the ceph
alosporins
business an
d
dis
posa
l of a numb
er of Co
nsume
r Hea
lthc
are br
ands
, fair val
ue
gai
ns on inves
tment
s and ce
rt
ain othe
r Adjus
ting ite
ms,
inc
luding t
he impa
ct of the e
nactm
ent of the i
ncre
ase in th
e
he
adline r
ate of UK C
orp
orate ta
x as d
iscus
sed o
n page 1
89.
The Consumer Healthcare brands disposal programme
is
co
mplete an
d has de
liver
ed net pr
ocee
ds of £1
.
1 billi
on. In
202
1 the ne
t loss o
n dispo
sal o
f intere
sts in a
ssoc
iates wa
s
£
36 milli
on, pr
imar
ily dri
ven by a los
s on dis
posa
l of the inte
rest
in th
e ass
ociate I
nnoviva I
nc. A c
harge o
f £26 milli
on (
2020:
£7 milli
on
) was r
ecor
ded for s
igniﬁ
can
t lega
l matter
s ari
sing in
the p
erio
d. Sign
iﬁc
ant leg
al ca
sh paym
ents wer
e £5 mi
llion
(2020 – £9 mill
ion). Inclu
ded wi
thin Di
vestm
ents
, signi
ﬁca
nt
leg
al and ot
her item
s, is a de
ferr
ed ta
x cre
dit of £1
57 milli
on
ari
sing o
n the tra
nsfer of i
ntelle
ctual p
roper
t
y withi
n the gro
up
dur
ing the qu
ar
ter
. This d
eferr
ed ta
x cre
dit ar
ises d
ue to
dif
fer
ence
s bet
ween gr
oup valu
e and the m
arket val
ue of the
assets transf
erred.
Separation costs
Fro
m Q2 2020, the G
roup s
tar
ted to rep
or
t additi
onal c
osts to
prepare for
establishment of
the Consumer Healthcare
bus
ines
s as an i
ndepe
ndent e
ntit
y (
“S
epar
ation co
sts”). T
otal
Sep
arati
on cos
ts incu
rred i
n 202
1 were £
3
1
4 mill
ion (2020
– £68 mill
ion
).
This includ
es £38 million relat
ing t
o transaction
costs including
preparatory admission costs
(
costs rela
ting t
o
ach
ieve a listi
ng).
T
o
tal se
parat
ion co
sts are e
stim
ated to be £6
00
-
700 m
illion
,
excluding transacti
on
costs
.
Adjusting items
continued
GS
K Ann
ual R
epor
t 2021
73
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
A sum
mar
y of the c
onsol
idated c
ash ﬂ
ow statem
ent is se
t out
b
el
ow.
2021
£m
2020
£m
Net cash inﬂow from operating activities
7
,9
52
8,441
Net cash inﬂow/(outﬂow) from investing activities
(
1,777
)
2,161
Net cash outﬂow from ﬁnancing activities
(7
,5
89)
(1
0,132)
Increase in cash and bank overdrafts
(1,414)
470
Cash and bank overdrafts at beginning of year
5,262
4,831
Increase in cash and bank overdrafts
(1,414)
470
Exchange adjustments
(29)
(3
9)
Cash and bank overdrafts at end of year
3,81
9
5,262
Cash and bank overdrafts at end of year comprise:
Cash and cash equivalents
4,27
4
6,292
Overdrafts
(4
55)
(1,030)
3,81
9
5,262
Capital expenditure and ﬁnancial investment
Ca
sh paym
ents for t
angib
le and in
tangi
ble ﬁxe
d ass
ets
amo
unted to £2,
93
1 milli
on (
2020 – £2,
239 milli
on
) and
dis
posa
ls rea
lise
d £89
8 milli
on (
2020 – £1
,
582 milli
on
).
Ca
sh paym
ents to acq
uire eq
uity i
nvestm
ents am
ounted to
£
1
62 mill
ion (
2
02
0 –£
4
1
1 mil
lion
)
, primarily
relating
to
Vir B
iotec
hnolo
gy
, and s
ales o
f equit
y inves
tments r
eali
sed
£202 mil
lion (2020 – £3
,269 mi
llion).
Fr
ee cash ﬂow
Fre
e cas
h ﬂow is the a
mount o
f cas
h gener
ated by the G
roup
after meeting
our obl
igations
for cont
ingent
consideration,
interest, tax and dividends
paid t
o non-control
ling in
terests,
and a
fter c
apit
al exp
enditu
re on pro
per
ty, plan
t and equ
ipmen
t
and intangible assets.
2021
£m
2020
£m
Free cash inﬂow
4,437
5,4
06
T
o
tal ca
sh paym
ents to Sh
ionog
i in relat
ion to the V
iiV
Healthcare contingent considera
tion liabil
ity in the
year w
ere
£
82
6 mill
ion (2020 – £8
58 milli
on
), of whic
h £7
2
1 milli
on
was r
ecog
nise
d in ca
sh ﬂows fr
om ope
rating a
ctivi
ties a
nd
£
1
05 million was recognised
in contin
gent considerat
ion paid
wit
hin inves
ting c
ash ﬂow
s. Th
ese pay
ments a
re dedu
ctibl
e for
tax purposes.
Reconciliation of net cash inﬂow from operating
activities to free cash ﬂow
A rec
onci
liatio
n of net ca
sh inﬂ
ow from o
perat
ing act
iviti
es,
whi
ch is the c
lose
st equ
ivale
nt IFR
S mea
sure to fr
ee ca
sh ﬂow,
is sh
own bel
ow
.
2021
£m
2020
£m
Net cash inﬂow from operating activities
7
,9
52
8,4
41
Purchase of property
, plant and equipment
(1,1
72)
(1,226)
Purchase of intangible assets
(1,
759)
(1,013)
Proceeds from sale of property, plant and equipment
14
3
68
Proceeds from disposal of int
angible assets
772
1,255
Interest paid
(786)
(8
64)
Interest received
27
39
Dividends from associates and joint ventures
9
31
Contingent consideration paid (reported in
investing activities)
(1
1
4)
(120)
Contribution from non-controlling interests
7
3
Distributions to non-controlling interests
(642)
(1,208)
Free cash ﬂow
4,437
5,4
06
Futur
e cash ﬂow
Ove
r the lon
g t
er
m, we expe
ct that f
uture c
ash ge
nerate
d from
ope
ratio
ns will b
e suf
ﬁci
ent to fund o
ur oper
ating a
nd debt
ser
vi
cing c
osts
, norm
al levels o
f capi
tal ex
pendi
ture, o
bligat
ions
under e
xisting
licensing
agreements, e
xpenditu
re arising
from
restructuring programme
s
and other rout
ine outﬂows including
ta
x, pension
contribution
s and d
ividends, subject t
o the
‘P
rinc
ipal r
isks an
d unce
rt
ainti
es’ disc
usse
d on page
s 27
5
to 287
. W
e may fro
m time to tim
e have addi
tiona
l deman
ds for
ﬁna
nce, s
uch as f
or acqu
isiti
ons, i
nclud
ing potent
ially a
cquir
ing
increase
d
ownership interests in t
he ViiV Healthcar
e
business
where a minority shareholder hold p
ut options. W
e
hav
e access
to mult
iple so
urce
s of liqui
dit
y from sh
or
t and lon
g-term c
apit
al
mar
kets and ﬁ
nanc
ial ins
tituti
ons for su
ch nee
ds, in a
dditi
on to
the cash ﬂow
from operation
s.
Investment appraisal and capit
al allocation
We have a stron
g fram
ework for c
apit
al all
ocati
on, in
cludin
g
a boa
rd to gover
n the all
ocati
on of ca
pita
l betwe
en our
bus
ines
ses
. W
e utili
se a co
nsiste
nt cas
h retur
n on inves
ted
capital (CROIC) me
thodology t
o prioritise inv
estment across
the G
roup a
s a whole
, so that we c
an mor
e ef
fecti
vely co
mpare
the r
eturns f
rom eac
h of the bu
sine
sses a
s we allo
cate c
apita
l
bet
ween t
hem. We als
o cons
ider th
e impac
t on EPS a
nd our
credit proﬁle where
relev
ant.
Cash generation and conv
ersion
Group ﬁn
ancial review
continued
74
GS
K Ann
ual R
epor
t 2021
2021
£m
2020
£m
Assets
Non-current assets
Property
, plant and equipment
9,932
1
0,
176
Right of use assets
74
0
830
Goodwill
1
0,552
1
0,597
Other intangible assets
30,07
9
29,824
Investments in associates and joint ventures
88
364
Other investments
2,1
26
3,06
0
Deferred tax assets
5,21
8
4,28
7
Derivative ﬁnancial instruments
18
5
Other non-current assets
1,6
7
6
1,041
T
otal non-current assets
60,429
60,184
Current assets
Inventories
5,
783
5,9
96
Current tax recoverable
486
67
1
T
rade and other receivables
7
,
860
6,952
Derivative ﬁnancial instruments
18
8
152
Liquid investments
61
78
Cash and cash equivalents
4,27
4
6,292
Assets held for sale
22
10
6
T
otal current assets
1
8,6
7
4
20,24
7
T
otal assets
7
9,1
03
80,431
Liabilities
Current liabilities
Short-term borrowings
(3,601)
(3,
725)
Contingent consideration liabilities
(958)
(7
65)
T
rade and other payables
(1
7
,5
54)
(15,8
40)
Derivative ﬁnancial instruments
(22
7)
(221)
Current tax payable
(4
89)
(5
45)
Short-term provisions
(841)
(1,052)
T
otal current liabilities
(23,6
70)
(22,148)
Non-current liabilities
Long-term borrowings
(20,57
2)
(23,425)
Corporation tax payable
(1
8
0)
(
176
)
Deferred tax liabilities
(3,55
6)
(3,6
00)
Pensions and other post-employment beneﬁts
(3,1
1
3)
(3,65
0)
Other provisions
(630)
(
707)
Derivative ﬁnancial instruments
(1)
(1
0)
Contingent consideration liabilities
(5,1
18)
(5,1
04)
Other non-current liabilities
(921)
(8
03)
T
otal non-current liabilities
(34,091)
(37
,4
75)
T
otal liabilities
(57
,
7
61)
(5
9,623)
Net assets
21,342
20,808
T
otal equity
21,342
20,808
Property
, plant and equipment
Our b
usine
ss is s
cien
ce-b
ase
d, techn
ology
-intens
ive and h
ighly
reg
ulated by gove
rnme
ntal au
thori
ties
. W
e all
ocate si
gniﬁ
cant
ﬁnancial resourc
es t
o the
renewal and
maintenance of our
propert
y
,
plant and
equipment
to
minimise
risks of
interrupt
ion t
o
production and
to
ensure compliance
with regula
tory standards.
A numb
er of our p
roce
sse
s use ha
za
rdou
s materi
als.
Th
e t
ota
l cost o
f our pro
per
ty, plan
t and equ
ipmen
t at 3
1
De
cemb
er 202
1 was £20
,
7
78 millio
n, with a n
et book v
alue of
£9,932
million. Of t
his, land and
buildings
represented
£3
,
66
7
mill
ion, p
lant an
d equipm
ent £
4,55
8 millio
n and as
sets i
n
co
nstru
ction £1
,
70
7 milli
on. In 2021
, we investe
d £
1
,205 mil
lion
in new p
roper
t
y
, plan
t and equ
ipment
. This w
as mai
nly rel
ated to
a lar
ge numb
er of pro
jects f
or the re
newal, i
mprovem
ent and
exp
ansio
n of faci
litie
s at vario
us world
wide s
ites to su
ppor
t new
pro
duct d
evelopm
ent and l
aunch
es as wel
l as to imp
rove the
ef
ﬁciency
of e
xisting su
pply chains. Propert
y
is mainly
held
fre
ehol
d. New inve
stmen
t is ﬁna
nced f
rom our li
quid re
sour
ces
.
At 3
1 De
cemb
er 202
1
, we had con
tractu
al com
mitme
nts for
futu
re cap
ital e
xpend
iture of £
6
1
6 m
illion
. W
e beli
eve that our
pro
per
ty a
nd plan
t facili
ties a
re adeq
uate for our c
urre
nt need
s.
W
e observe st
ringent
procedures
and u
se speciali
st skills
to
manage en
vironmen
tal risks
from our
activities. En
vironmen
tal
issues, sometimes dating
from operat
ions no
w modiﬁed or
discontinued, are
reported under ‘En
vironment’ on pa
ges 39
to 40 an
d in Note 46 to the ﬁ
nanc
ial st
atement
s, ‘L
egal
proceedings’
.
Right of use assets
Ri
ght of use a
ss
ets amou
nted to £7
40 mi
llion at 31 Dec
embe
r
202
1 com
pare
d with £
830 m
illion o
n 1 Janu
ar
y 202
1. The
dec
rea
se in the ye
ar reﬂ
ecte
d the impa
ct of dep
reci
ation a
nd
dis
posa
ls of £21
3 mi
llion a
nd £7
0 milli
on res
pec
tively, par
tly
of
fse
t by additi
ons of £21
5 m
illion
.
Goodwill
Go
odwi
ll decr
eas
ed to £
1
0,552 mill
ion at 31 Dece
mber 2021
,
from £
1
0,59
7 mill
ion.
Other intangible assets
Ot
her int
angib
le as
sets inc
lude th
e cost o
f intan
gible
s acqu
ired
fro
m third p
ar
ties an
d comp
uter sof
t
ware. T
he net bo
ok value o
f
othe
r intan
gible a
sse
ts as at 31 Dec
ember 2021 was £
30,079
mill
ion (2020 – £29,824 milli
on
). The i
ncre
ase pr
imar
ily
reﬂ
ecte
d additi
ons, n
et of dis
posa
ls and w
rite of
fs of £1
,9
1
3
mill
ion, of
fs
et by amo
rti
satio
n and imp
airm
ent los
ses
, net of
rever
sal
s, in th
e year of £1
,597 milli
on.
Financial pos
ition and resources
GS
K Ann
ual R
epor
t 2021
75
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Investments in associates and joint ventures
We held inve
stme
nts in as
soci
ates and j
oint ven
tures w
ith
a ca
rr
ying va
lue at 3
1 Dec
embe
r 202
1 of £8
8 milli
on
(2020 – £36
4 milli
on
). In 2021
, th
e Grou
p sold al
l of its
sha
res in I
nnovi
va Inc
. back to In
noviva
. Fol
lowing t
his
dive
stme
nt, the G
roup he
ld no inves
tment
s in as
soci
ates
or jo
int ventur
es whi
ch are li
sted en
titie
s. Se
e Note 2
1 to
the ﬁ
nanci
al sta
tements
, ‘I
nvestm
ents in a
sso
ciates a
nd
joint vent
ures’
.
Other investments
We held oth
er inves
tments w
ith a ca
rr
ying va
lue at 31
De
cemb
er 202
1 of £2,
1
26 mill
ion (2020 – £3
,060 m
illion).
Th
e highe
st valu
e investm
ents he
ld at 3
1 Dec
embe
r 202
1 were
in Cu
re
V
ac AG, w
hich h
ad a book va
lue at 31 Dece
mber 2021
of £
380 m
illion (2020 – £
887 milli
on
), and Vi
r Biotec
hnolo
gy
,
whi
ch had a b
ook valu
e of £266 mill
ion (2020 – £
1
3
0 milli
on
).
Th
e other inve
stmen
ts incl
uded eq
uit
y stake
s in com
panie
s with
which we
hav
e research collaboration
s, and which
provide
acc
es
s t
o bio
t
ech
nolog
y develo
pments o
f potenti
al inter
est an
d
inter
ests i
n comp
anie
s that ari
se fro
m busin
ess di
vestm
ents
.
Derivative ﬁnancial instruments: assets
We held cu
rrent d
eriva
tive ﬁna
ncia
l ass
ets at fai
r value of
£1
8
8 millio
n (
2020 – £
1
5
2 milli
on
) and no
n-cur
rent d
erivat
ive
ﬁna
ncia
l ass
ets hel
d at fair va
lue of £1
8 mi
llion (2020 –
£
5 millio
n
). The ma
jori
ty of the
se ﬁn
ancia
l instr
ument
s relate
d
to fore
ign exch
ange c
ontrac
ts both d
esig
nated and n
ot
designated as accounting hedges.
Inventories
Inve
ntor
y of £5,783 mil
lion de
crea
sed f
rom £
5,99
6 millio
n
in 2020.
T
rade and other r
eceivables
T
rade and other
receivables of £
7
,
860
million
increased from
£6
,952 milli
on in 2020.
Deferred tax assets
Def
erre
d ta
x ass
ets amo
unted to £
5,21
8 mi
llion (2020 –
£
4,287 milli
on
) at 3
1 Dec
emb
er 202
1
.
Derivative ﬁnancial instruments: liabilities
We held cu
rrent a
nd non-
curr
ent der
ivative ﬁ
nanc
ial lia
bilit
ies
at fai
r value of £
22
8 mill
ion (2020 – £23
1 milli
on
). This p
rima
rily
related
to
foreign
exchange
contracts bo
th designat
ed and
not
designated as accounting hedges.
T
rade and other payables
At 3
1 De
cemb
er 202
1
, trade a
nd other p
ayable
s were
£1
7
,55
4 millio
n comp
ared w
ith £1
5,
840 m
illion at 31
De
cemb
er 2020. The i
ncre
ase pr
imar
ily re
ﬂecte
d the imp
act
of higher
customer
return
and rebat
e accruals
and higher
acc
rual
s relat
ing to our co
llab
oratio
ns. S
ee Note 28 to the
ﬁna
ncia
l statem
ents
, ‘T
r
ade an
d other paya
bles’
.
Provisions
W
e carried deferred tax provisions
and o
ther short-
term
and
non
-curr
ent prov
isio
ns of £5
,027 millio
n at 3
1 Dece
mber 2021
(2020 – £5,
359 mil
lion). Othe
r provi
sions at t
he year-e
nd
inc
luded £1
96 milli
on (2020 – £320 mil
lion) relate
d t
o leg
al and
othe
r dispu
tes and £
652 milli
on (
2020 – £8
60 mill
ion
) rel
ated
to
Major restructuring programmes. Provision
has been made
for legal
and o
ther
disputes, i
ndemniﬁed disposal l
iabilities,
emp
loyee re
lated lia
biliti
es and t
he cos
ts of the r
estr
ucturi
ng
pro
gram
me to the ex
tent that a
t the bal
ance s
heet date a l
egal
or constructive
obligat
ion exist
ed and
could be rel
iably
estimat
ed.
Pensions and other post-employment beneﬁts
We acco
unt for pe
nsion a
nd othe
r post-em
ploym
ent
ar
range
ments i
n acco
rdan
ce with I
AS 1
9. The ne
t deﬁc
its were
£1
,
1
29 mil
lion (2020 – £2,
1
0
4 millio
n
) on pens
ion ar
rang
ement
s
and £1
,243 mill
ion (2020 – £
1
,363 m
illion) on unf
unded
pos
t
-em
ploym
ent lia
biliti
es. S
ee Note 3
0 to the ﬁna
ncial
statemen
ts, ‘Pensions
and o
ther post
-emp
loyment
beneﬁts
’
.
Other non-current liabilities
Ot
her non
-curr
ent lia
bilit
ies am
ounted to £
9
2
1 mill
ion at 31
De
cemb
er 202
1 (
2020 – £8
03 mil
lion).
Contingent consideration liabilities
Contingent considerat
ion amount
ed t
o £6,0
7
6
million
at
3
1 De
cemb
er 202
1 (
2020 – £5
,869 m
illion), of whi
ch
£
5,559 mi
llion (2020 – £
5,3
59 millio
n
) repre
sente
d the
estimated
present val
ue of
amounts pa
yable
to
Shionogi
relating
to Vii
V Hea
lthc
are and £
4
79 milli
on (
2020 – £
4
77 mil
lion)
represented t
he estimat
ed present
value
of conting
ent
consideration pa
yable
to
Novartis relat
ed t
o the
V
accines
acquisition.
Th
e liabi
lity d
ue to Shio
nogi inc
lude
d £23
1 millio
n in res
pect
of pref
erential
dividends. The l
iability for
preferen
tial d
ividends
due to P
ﬁ
zer at 3
1 Dec
embe
r 202
1 was £ni
l (
2020 –
£1 millio
n
). An exp
lanati
on of the a
ccou
nting for t
he non-
co
ntrolli
ng intere
sts in V
iiV H
ealt
hcar
e is set ou
t on page 57
.
Of the t
otal contin
gent consideration
pay
able (
on a post
-tax
ba
sis) at 3
1 Dece
mber 2021
, £
958 mi
llion (2020 – £7
65
mill
ion) is expe
cted to be pa
id wit
hin one ye
ar
. The c
onsid
erati
on
payab
le is exp
ected to b
e paid ove
r a number o
f year
s. As a
re
sult, t
he total e
stimate
d liab
ilitie
s are di
scoun
ted to their
pre
sent va
lues
, on a pos
t
-ta
x ba
sis usi
ng pos
t
-ta
x disc
ount rate
s.
Th
e impac
t of the set
tle
ment wi
th Gile
ad on the c
ontin
gent
co
nside
ratio
n liabi
lity (CC
L) is to inc
rea
se it by £28
8 millio
n,
on a po
st-ta
x basi
s in Q4 2021 due to the ob
ligati
on Vii
V
Healthcare has to
pay
future cash consideration
to
Shionogi
for
its s
hare of t
he upfr
ont and of t
he futur
e US sa
les pe
rfo
rman
ce
of Biktar
v
y
and products containing bictegravir
. Including the
imp
act of th
e sett
lemen
t at 3
1 Dece
mber 2021
, the liab
ilit
y
whi
ch is dis
coun
ted at 8% stoo
d at £5
,559 mil
lion, o
n a
post
-tax basis.
The Shionogi-
ViiV Healthcare contin
gent considerat
ion liability
is di
scou
nted at 8% an
d the Nova
rti
s V
accin
es co
ntinge
nt
consideration liabi
lity is discount
ed partly at 7
.5% and partly
at 8.
5%
.
Financial position and resources
continued
Group ﬁn
ancial review
continued
76
GS
K Ann
ual R
epor
t 2021
Net debt
2021
£m
2020
£m
Cash, cash equivalents and liquid investments
4,335
6
,
370
Borrowings – repayable within one year
(3,601)
(3,
7
25)
Borrowings – repayable after one year
(20,5
72)
(23,425)
Net debt
(1
9,83
8)
(20,
780)
At 3
1 De
cemb
er 202
1
, net debt wa
s £
1
9.8 bill
ion, c
ompa
red
wit
h £20.8 b
illion at 31 Dec
embe
r 2020, com
pris
ing gros
s debt
of £24.
1 b
illio
n and ca
sh and l
iquid d
ivest
ments of £
4.
3 billi
on.
Net d
ebt re
duced d
ue to £4
.4 bill
ion fre
e cas
h ﬂow and £
0.5
billion pr
oceeds from in
vestments, incl
uding £0.3 bill
ion
pro
ceed
s from th
e Innov
iva dis
posa
l and £
0.3 bi
llion of n
et
fav
ourable ex
change impa
cts from t
he translat
ion of
non-St
erling
denominat
ed debt
and ex
change on
other
ﬁnancing it
ems partly
of
fse
t by the divi
dend
s paid to sh
areh
older
s of £
4.0 bill
ion and
add
ition
al invest
ments o
f £0.2 b
illio
n.
At 3
1 De
cemb
er 202
1
, GSK ha
d shor
t-t
er
m borrow
ings
(includ
ing o
verdrafts and
lease liabil
ities
)
repay
able wit
hin
1
2 m
onths of £
3.6 b
illio
n and £
4.0 bil
lion re
payable i
n the
sub
sequ
ent year.
At 3
1 De
cemb
er 202
1
, GSK
’
s ca
sh and li
quid inve
stmen
ts were
held as follo
ws:
2021
£m
2020
£m
Bank balances and deposits
2,825
3,000
US T
reasury and T
reasury repo only money
market funds
54
3
17
Liquidity funds
1,3
95
2,9
75
Cash and cash equivalents
4,27
4
6,292
Liquid investments – government securities
61
78
4,335
6
,
370
Ca
sh and li
quid inve
stme
nts of £2.
9 billi
on (
2020 – £5
.4 bill
ion)
were h
eld ce
ntral
ly at 3
1 Dec
embe
r 202
1
.
Th
e analy
sis of c
ash an
d gros
s debt af
ter the e
ffe
cts of he
dging
is a
s follows:
2021
£m
2020
£m
Cash and liquid investments
4,335
6
,
370
Gross debt
– ﬁxed
(23,1
67)
(24,538)
– ﬂoating
(1,006)
(2,612)
– non-interest bearing
–
–
Net debt
(1
9,838)
(20,
780)
Movements in net debt
2021
£m
2020
£m
Net debt at beginning of year
(20,780)
(25,215)
(Decrease)/increase in cash and bank overdrafts
(1,41
4)
470
(Decrease)/increase in liquid investments
(1
8)
1
Increase in long-term loans
–
(3,29
8)
Net repayment of short-term loans
1,99
5
7
,305
Repayment of lease liabilities
2
15
2
27
Exchange movements
3
14
(135)
Other movements
(1
50)
(135)
Net debt at end of year
(1
9,83
8)
(20,
7
8
0)
Financial position and resources
continued
3,500
4,000
4,500
2,500
2,000
1,500
1,000
500
3,000
Maturity proﬁle of bond debt
£m equivalent
G
BP bonds
EUR bonds
U
SD
bonds
2022
2025
2027
2033
2034
2038
2039
2042
2023
2043
2045
2024
2026
2029
0
2028
2030
2035
GS
K Ann
ual R
epor
t 2021
77
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Financial position and resources
continued
Interest rate benc
hmark r
eform
Inte
rest r
ate benc
hmar
k refor
m - Amen
dments to I
FR
S 9, IAS
39, I
FRS 4
, IFR
S 7 and I
FRS 1
6’ Pha
se I an
d Phas
e II we
re
is
sued by th
e IAS
B in Septe
mber 201
9 a
nd Augus
t 2020, and
ado
pted by the U
K Endo
rsem
ent Bo
ard on 5 Ja
nuar
y 2021
.
Ph
ase I of th
e amen
dment mo
diﬁ
es spe
ciﬁ
c hedge a
ccou
nting
req
uirem
ents to all
ow hedg
e acco
unting to c
ontinu
e for af
fected
hed
ges du
ring the p
erio
d of unc
ert
aint
y befo
re the he
dged
item
s or hedg
ing ins
trume
nts af
fecte
d by the cur
rent inte
rest
rate b
enchm
arks a
re ame
nded a
s a resul
t of the on
going
inter
est r
ate bench
mark r
eform
s. Ph
ase I
I als
o provid
es that
,
for ﬁn
ancial in
strument
s measured
using
amortised cost
me
asur
ement
, chang
es to the ba
sis fo
r determ
ining th
e
contractual cash ﬂows
required
by in
terest rat
e bench
mark
refo
rm sho
uld be re
ﬂec
ted by adju
sting th
eir ef
fect
ive inter
est
rate a
nd no imme
diate ga
in or los
s shou
ld be re
cogni
sed.
The Group has closely monit
ored the mark
et and t
he output
from the various industry working groups managing the
transition t
o ne
w benchmark in
terest ra
tes. This incl
udes
announcements made by LIBO
R
regulators, including the
Fi
nanci
al Co
nduct A
uthor
ity (F
CA) and th
e US Co
mmodi
ty
Futures T
rading Commission, regarding
the t
ransition a
wa
y
fro
m LIB
OR (inc
ludin
g GBP L
IBO
R
, USD L
IBO
R and
EUR
I
BOR) to the S
t
erl
ing Ove
rnigh
t Index Aver
age Ra
te
(SON
IA), the S
ecur
ed Over
night F
inan
cing Ra
t
e (SOF
R),
and t
he Euro S
hor
t
-
T
erm R
ate (
€ST
R) res
pecti
vely.
At 3
1 De
cemb
er 202
1
, the Gro
up was not d
irect
ly expo
sed
to inter
est ra
te bench
mark r
eform a
s it hel
d no intere
st rate
der
ivative
s or ﬂoa
ting rate d
ebt that re
feren
ced to L
IBO
R. T
he
Gr
oup did no
t trans
ition a
ny materi
al deri
vative
s or ﬂoati
ng rate
deb
t into a new ind
ex as all o
f the ins
trume
nts refe
renci
ng
LI
BOR m
atured b
efore D
ecem
ber 2021
.
T
ot
al equity
At 3
1 De
cemb
er 202
1
, t
ota
l equit
y had in
crea
sed f
rom
£20,
808 mi
llion at 31 Dec
embe
r 2020 to £2
1
,
342 milli
on.
A sum
mar
y of the move
ments i
n equit
y is se
t out bel
ow:
2021
£m
2020
£m
T
otal equity at beginning of year
20,8
08
18,35
7
T
otal comprehensive income for the year
4,
7
59
7
,35
8
Dividends to shareholders
(3,99
9)
(3,97
7)
Ordinary shares issued
21
29
Changes in non-controlling interests
–
(131)
T
rans
action with non-controlling interest
10
–
Share-based incentive plans
3
67
381
T
ax on share-based incentive plans
11
(4)
Contributions from non-controlling interests
7
3
Distributions to non-controlling interests
(6
42)
(1,20
8)
T
otal equity at end of year
21,3
42
20,808
Share pur
c
hases
At
3
1 D
ec
emb
er
202
1
, G
SK hel
d 355.
2 milli
on shar
es as
T
reas
ur
y share
s (
2020 – 355
.2 mil
lion sh
ares), at a cos
t of
£
4,969 m
illion (2020 – £
4,96
9 millio
n
), which h
as be
en
deducted from
retained earnings.
No ordinary shares were rep
urchased in the
period 1 Jan
uar
y
202
1 to 28 Feb
ruar
y 2022 and th
e comp
any doe
s not exp
ect
to
make an
y ordi
nary share repurchases in the
remainder
of 2022.
In 2021
, no T
re
asu
ry s
hare
s were tra
nsfer
red to the E
mploye
e
Sha
re Ow
ners
hip Pl
an (ESO
P) T
ru
sts. S
hare
s are he
ld by the
T
rusts to satisfy future
exercises
of opt
ions and
awards
under
the G
roup sh
are opt
ion and awa
rd sch
emes
.
A pro
por
tion of t
he sha
res hel
d by the T
rusts a
re in re
spec
t
of awar
ds whe
re the ru
les of th
e sche
me requ
ire GS
K to satis
fy
exercises th
rough mark
et purchases rat
her than
the issue
of
new sh
ares
. The s
hare
s held by th
e T
ru
sts ar
e matched to
opti
ons and awa
rds gr
anted
.
At 3
1 De
cemb
er 202
1
, the ESO
P T
ru
sts hel
d 23.2 m
illion
(2020 – 49.0 milli
on
) GS
K shar
es agai
nst the f
uture exe
rcis
e
of sh
are opti
ons an
d share awa
rds
. The c
arr
ying va
lue of
£27 milli
on (
2020 – £1
94 m
illion) has b
een de
ducte
d from
othe
r rese
rve
s. T
he mar
ket value of t
hese s
hare
s was £
3
7
1
mill
ion (2020 – £655 m
illion).
On 1
0 Februar
y 2
02
2, 50
.3 million
shares were
transferred to
the E
SOP T
rust
s after w
hich th
e T
r
usts he
ld 72.9 mill
ion sha
res
against the
exercise
of share
options
and share
rewards.
Group ﬁn
ancial review
continued
78
GS
K Ann
ual R
epor
t 2021
Contractual obligations and commitments
Fi
nanci
al com
mitme
nts are s
ummar
ised i
n Note 35 to the
ﬁnancial stat
ements,
‘Commitments
’
.
Th
e followi
ng tab
le sets ou
t our co
ntrac
tual ob
ligati
ons and
co
mmitme
nts at 31 Dece
mber 2021 as they f
all due fo
r
payment.
T
otal
Under 1 yr
1-3 yrs
3-5 yrs
5 yrs+
£m
£m
£m
£m
£m
Loans
23,296
3,3
99
5,624
2,800
11,4
7
3
Interest on loans
7
,6
03
686
1,19
4
1,038
4,6
85
Lease obligations
1,0
15
203
3
05
166
341
Future ﬁnance charges
153
25
41
30
57
Intangible assets
12,082
583
1,013
1,914
8,
572
Property
, plant & equipment
616
468
14
8
–
–
Investments
146
45
61
40
–
Purchase commitments
484
360
115
8
1
Pensions
44
44
–
–
–
T
otal
45,439
5,813
8,501
5,9
96
25,129
Co
mmitm
ents in r
espe
ct of lo
ans and f
uture in
teres
t payable
on lo
ans are d
iscl
osed b
efore t
akin
g into acc
ount the e
ffe
ct of
derivativ
es.
We have entere
d into a numb
er of re
sear
ch col
labor
ation
s t
o
develop
new compounds
with other
pharmaceutical companies
.
Th
e t
er
ms of the
se arr
ange
ments c
an incl
ude upf
ront fee
s,
equ
ity inve
stme
nts, lo
ans an
d commi
tment
s to fund sp
eciﬁ
ed
level
s of res
earc
h. In ad
ditio
n, we will o
ften a
gree to ma
ke
fur
the
r payme
nts if fut
ure ‘mil
estone
s’ are ac
hieved.
As s
ome of the
se agr
eeme
nts rela
t
e to com
pound
s in the ea
rly
st
ages of d
evelopm
ent, th
e potenti
al obli
gatio
n t
o make
mil
estone p
ayment
s will co
ntinue f
or a numbe
r of year
s if the
co
mpound
s move suc
ces
sful
ly throu
gh the deve
lopme
nt
pro
ces
s. G
enera
lly, the clo
ser the p
roduc
t is to mar
keting
approval, t
he greater
the probability of
success
. The
amounts
show
n above wi
thin int
angi
ble as
sets r
epre
sent the m
ax
imum
that wo
uld be pa
id if al
l miles
tones we
re achi
eved. Th
ere wa
s a
dec
rea
se in the c
ommi
tments i
n 202
1 as a re
sult of a re
ducti
on
in outstanding loan commitments
.
In 201
8, we rea
ched a
n agree
ment wi
th the tr
ustee
s of the
UK pension schemes t
o mak
e addition
al contribution
s, to
as
sist i
n elimi
nating th
e pensi
on deﬁ
cit id
entiﬁ
ed as p
ar
t of
the 31 Dec
embe
r 20
1
7 a
ctuar
ial fu
nding va
luatio
n. The t
able
includes this
commitment
but ex
cludes the
normal ongoing
annual fundi
ng requiremen
t in
the UK of
approximat
ely
£
1
1
0
million.
For further informa
tion on
pension obliga
tions,
se
e Note 30 to the ﬁ
nanci
al st
atement
s, ‘Pe
nsion
s and
other post
-employment
beneﬁts’
.
Contingent liabilities
Ot
her co
ntinge
nt liabi
litie
s are se
t out in No
te 34 to the ﬁn
ancia
l
statemen
ts, ‘Contingen
t liabi
lities
’
.
Th
e followi
ng tab
le sets ou
t conti
ngent l
iabili
ties
, com
pris
ing
per
fo
rmanc
e guar
antee
s, let
ters o
f credi
t and oth
er items a
risi
ng
in th
e norma
l cour
se of bu
sines
s, a
nd when t
hey are ex
pecte
d
to e
xpire.
T
otal
Under 1 yr
1-3 yrs
3-5 yrs
5 yrs+
£m
£m
£m
£m
£m
Guarantees
12
9
2
–
1
Other contingent liabilities
114
13
12
31
58
T
otal
126
22
14
31
59
In th
e norm
al cour
se of bu
sine
ss, we h
ave provid
ed vari
ous
ind
emni
ﬁcati
on guar
antee
s in res
pect o
f busin
ess di
spos
als
in wh
ich le
gal and o
ther dis
putes h
ave subse
quent
ly aris
en. A
provision is
made where
an outﬂow of
resources is considered
pro
babl
e and a rel
iable e
stim
ate can be m
ade of th
e likely
outc
ome of th
e dispu
te and this i
s inclu
ded in N
ote 3
1 to
the ﬁnancial sta
tements,
‘Other provision
s’
.
We provid
e for the ou
tcome of t
a
x, leg
al and ot
her dis
putes
whe
n an out
ﬂow of r
esou
rces i
s cons
ider
ed prob
able a
nd a
rel
iable e
stim
ate of the out
ﬂow m
ay be made
. At 3
1 Dec
ember
202
1
, other th
an for tho
se dis
putes w
here pr
ovisi
on has b
een
mad
e, it wa
s not pos
sibl
e t
o make a r
eliab
le est
imate of the
poten
tial ou
tﬂ
ow of funds t
hat migh
t be requ
ired to se
ttle
dis
putes w
here th
e poss
ibili
ty of th
ere bei
ng an out
ﬂow wa
s
more than remot
e.
Th
e ultimate l
iabil
ity fo
r such mat
ters m
ay var
y signi
ﬁc
antly
from the
amounts
provided and
is dependen
t upon
negotiat
ions
wit
h the rel
evant ta
x aut
horit
ies an
d the outc
ome of lit
igatio
n
proceedings, where relev
ant. This is
discussed further in
‘P
rinc
ipal r
isks an
d unce
rt
ainti
es’ on pag
es 27
5 to 28
7 and
Note 46 to th
e ﬁnan
cial s
tateme
nts, ‘
Lega
l proc
eedi
ngs’
.
Financial position and resources
continued
GS
K Ann
ual R
epor
t 2021
79
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
T
reasur
y polic
ies
We repor
t in S
t
erl
ing and p
ay divid
ends ou
t of Sterl
ing ca
sh
ﬂows
. The r
ole of T
rea
sur
y is to moni
tor and ma
nage th
e
Group’
s e
xternal and internal funding requirements and
ﬁnancial
ris
ks in su
ppor
t of our s
trategi
c obje
ctive
s. GS
K oper
ates on a
global basis, primarily
throu
gh subsid
iary companies, and we
man
age our c
apit
al to ensu
re that ou
r subsi
diar
ies ar
e able to
ope
rate as g
oing co
ncer
ns and to opt
imise r
eturn
s t
o
shareholders through
an appropriat
e balance
of debt
and
equ
ity. T
r
eas
ury a
ctivi
ties a
re gover
ned by pol
icie
s appr
oved
ann
ually by t
he Boar
d of Dir
ector
s, an
d most re
cent
ly on
1
4 O
ctober 2021
. A T
re
asur
y M
anage
ment G
roup (
TM
G
)
mee
ting, c
haire
d by our Chi
ef Fin
anci
al Of
ﬁc
er
, take
s plac
e
on a re
gular b
asi
s to review T
rea
sur
y acti
vitie
s. I
ts memb
ers
receive management
informa
tion rela
ting t
o t
hese activities.
T
r
easury operations
Th
e objec
tive of GS
K’s T
reas
ur
y activ
itie
s is to minim
ise the
pos
t
-ta
x net c
ost of ﬁn
anci
al oper
ation
s and red
uce it
s volatili
ty
in or
der to ben
eﬁt e
arnin
gs and c
ash ﬂ
ows. GS
K use
s a varie
ty
of ﬁn
ancia
l instr
umen
ts to ﬁnan
ce its op
erati
ons and d
erivat
ive
ﬁnancial instruments
to
manage mark
et risks
from these
operations. Derivat
ives principally
comprise foreign
exchan
ge
for
war
d contr
acts a
nd swaps w
hich a
re use
d t
o swap
bor
rowin
gs and li
quid a
ssets i
nto curr
encie
s requ
ired fo
r Group
pur
pose
s, a
s well as in
teres
t rate swap
s which a
re use
d to
manage exposure
to
ﬁnancial risks from
changes in
interest
rate
s.
De
rivati
ves are u
sed excl
usive
ly for hed
ging pu
rpos
es in re
lation
to unde
rlyi
ng busi
nes
s activ
ities a
nd not a
s tradi
ng or
speculat
ive
instrumen
ts.
Capital management
GSK
’
s
ﬁnancial strategy
, implement
ed through the
Group’
s
ﬁnancial archit
ecture,
supports GSK’s
strat
egic priorit
ies and is
reg
ular
ly reviewe
d by the Bo
ard. We man
age the c
apit
al
str
uctur
e of the Gr
oup thro
ugh an ap
prop
riate mi
x of debt an
d
equ
ity. W
e con
tinue to ma
nage our ﬁ
nanc
ial po
licie
s to a credi
t
pro
ﬁle that p
ar
ticul
arly t
arget
s shor
t-term cr
edit ra
tings of A-
1
and P
-
1 whil
e maint
aini
ng singl
e A long-ter
m ratin
gs con
sisten
t
with t
hose targe
ts.
GS
K’s long
-t
erm c
redi
t rating w
ith Sta
ndar
d and Poo
r’s is A
(
stable o
utlook) an
d with
Moody’s
Inv
estor
Servic
es
(‘Moody’
s’
)
is A
2 (
stab
le outlo
ok). Ou
r shor
t-term cre
dit rat
ings ar
e A-
1 and
P-
1 with
Standard and
Poor’
s
and Moody’
s
respectively
.
Liquidity risk management
GS
K’s poli
cy is to bor
row cen
trall
y in orde
r to meet an
ticip
ated
funding requirements. Our ca
sh ﬂow
forecas
ts
and funding
req
uirem
ents ar
e monito
red by the T
MG on a r
egula
r bas
is. Ou
r
str
ategy is to di
vers
if
y liquid
ity s
ource
s usin
g a rang
e of facil
ities
and to m
ainta
in broa
d acce
ss to ﬁn
ancia
l marke
ts.
Ea
ch day, we sweep c
ash fr
om a numb
er of glo
bal sub
sidi
arie
s
to cen
tral T
rea
sur
y acc
ounts fo
r liquid
ity m
anage
ment pu
rpos
es.
Interest rate risk management
GS
K’s obje
ctive i
s t
o mini
mise th
e ef
fecti
ve net inter
est co
st
and to b
alanc
e the mi
x of debt at ﬁ
xed an
d ﬂoatin
g intere
st rates
over ti
me. The p
olicy o
n intere
st rate r
isk man
ageme
nt limit
s the
net a
mount of ﬂ
oating r
ate debt to a sp
eci
ﬁc ca
p, reviewe
d and
agr
eed no le
ss tha
n annu
ally by the B
oard
.
For
eign exc
hange risk management
Our o
bjec
tive is to min
imise t
he expo
sure of ove
rse
as ope
rating
subsidiaries t
o transacti
on risk b
y ma
tch
ing local c
urrency
income with l
ocal currency costs where
possible. Foreign
currency transaction
exposures arising
on external and
int
ernal
tra
de ﬂows a
re sele
ctive
ly hedg
ed. GS
K’s inte
rnal tr
ading
transactions are
matched
centrally and
we
manage
inter
-compan
y pa
yment t
erms t
o reduce f
oreign currency
risk.
Wh
ere pos
sibl
e, we man
age the c
ash s
urplu
ses or b
orrow
ing
requirements
of
subsidiary companies centrally
using
forward
co
ntrac
ts to hedge f
uture r
epayme
nts bac
k into the or
iginat
ing
c
ur
r
en
c
y.
In order t
o reduce f
oreign currency
translation
exposure, w
e
se
ek to denom
inate bor
rowin
gs in the c
urren
cies o
f our
pri
ncipa
l ass
ets and c
as
h ﬂows. T
hes
e are pri
mari
ly
den
ominate
d in US Do
llar
s, Eur
os and Ster
ling
.
Bo
rrowin
gs ca
n be swapp
ed into oth
er curr
enci
es as r
equire
d.
Bo
rrowin
gs deno
minated i
n, or swa
pped in
to, forei
gn
cur
renci
es that m
atch inves
tments i
n overs
eas G
roup a
ssets
may be t
reated a
s a hedg
e again
st the re
levant a
sset
s. For
wa
rd
co
ntrac
ts in maj
or curr
encie
s are a
lso use
d to reduc
e expo
sure
to the G
roup’s investm
ent in over
sea
s Grou
p ass
ets. T
he TM
G
revi
ews the r
atio of bo
rrowin
gs to as
sets for m
ajor cu
rren
cies
regularly
.
Commodity risk management
Our o
bjec
tive is to min
imise i
ncom
e statem
ent volati
lit
y arisi
ng
from ﬂuctua
tions in
commodity prices, where practical and cost
ef
fect
ive to do so. T
he TM
G is aut
horis
ed to app
rove the
exec
ution of c
er
tain ﬁ
nanc
ial de
rivati
ves to hedg
e comm
odit
y
price exposures.
Counterparty risk management
We set glo
bal co
unterp
art
y limi
ts for ea
ch of our b
anki
ng and
inves
tment c
ounter
par
tie
s base
d on long
-term cr
edit ra
tings
fro
m Moo
dy’s and Sta
ndar
d and Poo
r’s. Us
age of the
se limi
ts is
act
ively mo
nitore
d and any b
reach o
f thes
e limits wo
uld be
rep
or
ted to the CF
O imme
diatel
y
.
In addition, rela
tionship
banks and
their credit
ratings
are
revi
ewed reg
ular
ly so that
, when c
hange
s in rati
ngs oc
cur
,
cha
nges c
an be ma
de to inves
tment leve
ls or to auth
orit
y limi
ts
as a
pprop
riate. A
ll ban
king c
ounter
par
ty li
mits ar
e reviewe
d at
least annuall
y
.
Group ﬁn
ancial review
continued
8
0
GS
K Ann
ual R
epor
t 2021
Th
e Group c
onso
lidated ﬁ
nanc
ial st
atement
s have been
prepared in accordanc
e
with int
ernational accounting standards
in c
onform
ity w
ith the r
equire
ments o
f the Co
mpani
es Act 20
06
and the Internat
ional Financial Repor
ting
Standards (IFR
S
)
as
is
sued by th
e Inter
nation
al Acc
ountin
g Stand
ard Bo
ard (I
ASB).
We are re
quire
d t
o make e
stima
tes and a
ssum
ptions t
hat
af
fect t
he amou
nts of as
sets
, liab
ilitie
s, reve
nue and ex
pens
es
rep
or
ted in the ﬁ
nanci
al st
atements
. Actu
al amou
nts and
results could
differ from those estima
tes.
Th
e criti
cal ac
coun
ting pol
icie
s relate to th
e followi
ng are
as:
–
T
urnover
–
T
a
xation
(Not
e 1
4
)
–
Le
gal and o
ther dis
putes (N
otes 46 an
d 3
1
)
–
Conti
ngent liabilitie
s (
Note 34
)
–
Pens
ions a
nd other p
ost-em
ployme
nt bene
ﬁts (N
ote 30).
Information o
n the
judgements
and estimat
es made
in these
are
as is g
iven in N
ote 3 to the ﬁna
ncial s
tateme
nts, ‘
Criti
cal
acc
ounti
ng judg
ements a
nd key sour
ces o
f estim
ation
uncer
tainty’
.
T
urnover
In r
espe
ct of the T
urnove
r acc
ounting p
olicy, our la
rges
t
bus
ines
s is US P
harm
aceut
ical
s, and t
he US ma
rket ha
s
the m
ost co
mplex a
rran
gemen
ts for reb
ates, d
isco
unts and
all
owance
s. T
he follow
ing bri
eﬂy d
escr
ibes t
he nature o
f the
arrangements i
n exist
ence in
our
US Pharmaceuticals bu
siness:
–
We have arr
angem
ents wi
th cer
ta
in indir
ect cu
stomer
s
whereby the
custom
er is able
to
buy products
from
wholesalers at reduced prices. A chargeback
represents
the di
ff
erenc
e bet
ween the i
nvoice p
rice to th
e whol
esa
ler
and the
indirect cust
omer’
s contract
ual discount
ed price.
Accruals for estima
ting
chargebacks are calcula
ted
based
on th
e t
er
ms of eac
h agree
ment
, histor
ical ex
per
ience a
nd
product growth rates
–
Customer rebat
es are
offered to k
ey
managed care and
Group Purchasing Organisations
and ot
her direct
and indirect
customers. These arrangements require the cust
omer t
o
ach
ieve cer
ta
in per
for
manc
e targ
ets rel
ating to the va
lue of
product purchased, formu
lar
y
status
or pre-det
ermined market
sha
res re
lative to c
ompet
itors
. The ac
cru
al for cus
tomer
reb
ates is e
stimate
d base
d on the s
peci
ﬁc term
s in eac
h
agreement,
hist
orical e
xperience and
product
gro
wth rates
–
Th
e US Me
dica
id prog
ramm
e is a state
-admi
nister
ed
pro
gram
me provi
ding a
ssis
tanc
e to cer
tai
n poor a
nd
vulnerable pa
tients. In
1
990, the Medicaid Drug R
ebat
e
Program was
established
to
reduce sta
te
and
federal
exp
enditu
re on pre
scr
iption d
rugs
. In 201
0, t
he Patie
nt
Pr
otectio
n and Af
ford
able C
are Ac
t bec
ame law. W
e
participate b
y pro
viding
rebat
es t
o stat
es. Accruals f
or
Me
dica
id reb
ates are c
alcu
lated ba
sed on t
he spe
ciﬁc
terms of
the
relevan
t regulat
ions or
the Pa
tient
Protection
and Affordable Care
Act
–
Ca
sh dis
counts a
re of
fere
d to custom
ers to en
coura
ge
pro
mpt paym
ent. T
hese a
re acc
rued fo
r at the time o
f
inv
oicing
and
adjust
ed subseq
uently
to
reﬂect a
ctual
experience
–
We reco
rd an ac
crua
l for est
imated s
ales r
eturns by a
pply
ing
his
toric
al exp
erien
ce of cu
stomer r
eturns to th
e amoun
ts
inv
oiced, toget
her with
market
-relat
ed in
formation
such as
stoc
k levels at w
hole
sale
rs, a
ntici
pated pr
ice inc
rea
ses an
d
competit
or activity
.
A rec
onci
liatio
n of gros
s turnove
r to net turn
over for the U
S
Pharmaceutic
als
business is as follo
ws
:
2021
2020
20
19
£m
Margin
%
£m
Margin
%
£m
Margin
%
Gross turnover
1
9,928
10
0
20,035
10
0
18,4
71
10
0
Market-driven
segments
(6,6
56)
(33)
(6,
75
4)
(34)
(5,9
7
6)
(32)
Government
mandated and
state programmes
(4,553)
(23)
(5,205)
(26)
(4,264)
(23)
Cash discounts
(37
7)
(2)
(38
8)
(2)
(35
6)
(2)
Customer returns
(1
1
7)
(1)
(11
7)
(1)
(141)
(1)
Prior year adjustments
838
4
402
2
2
47
1
Other items
(621)
(3)
(522)
(2)
(
579)
(3)
Total deductions
(1
1,48
6)
(58)
(12,5
84)
(63)
(11,06
9)
(60)
Net turnover
8,442
42
7
,451
37
7
,402
40
Ma
rket-dr
iven se
gments c
onsi
st pri
maril
y of mana
ged ca
re and
Me
dica
re pla
ns with w
hich we ne
gotiate c
ontra
ct pri
cing th
at is
honoured via
rebates
and chargebacks. Mandat
ed segments
consist primarily of
Medicaid and federal go
vernment
programmes which receive
gov
ernment
-mandat
ed pricing
via
rebates
and chargebacks.
Critic
al accounting policie
s
GS
K Ann
ual R
epor
t 2021
81
Group ﬁn
ancial review
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e decre
ase
d dedu
ction
s in the Gove
rnme
nt mand
ated and
st
ate progr
amme
s of the gr
oss tur
nover to net tu
rnover
reconciliation
primarily reﬂected l
ower
rebat
es and chargebacks
on re
spir
ator
y produ
cts
, and on
Advai
r
in
particular
.
Dur
ing the ye
ar
Advair
a
ccou
nted for 6% o
f US
Ph
armac
euti
cals tu
rnover a
nd appr
oximate
ly 2
1
% of t
he
total
deduction for
rebat
es and re
turns.
The respiratory por
tfolio as a
whole, including
Established
Res
pirato
ry p
roduc
ts, ac
coun
t
ed fo
r approx
imately 77% of
the tot
al ded
uctio
n in the yea
r
.
Th
e balan
ce she
et acc
rual
s for reb
ates, di
scou
nts, a
llowanc
es
and r
eturns f
or the US P
harm
aceu
tica
ls and Vacci
nes
bus
ines
ses a
re mana
ged on a c
ombin
ed bas
is. At 31 Dec
embe
r
202
1
, the tota
l accr
ual am
ounted to £
5,04
4 millio
n (
2020 –
£
4,686 m
illio
n
).
A mon
thly pro
ces
s is ope
rated to mo
nitor inven
t
or
y level
s at
wholesaler
s
for an
y abnormal mov
ements. This process uses
gro
ss sa
les vol
umes
, pres
cript
ion volu
mes ba
sed on t
hird pa
rt
y
dat
a sourc
es an
d inform
ation re
cei
ved from key w
hole
sal
ers
.
Th
e aim of thi
s is to maint
ain inve
ntorie
s at a cons
istent l
evel
fro
m year to yea
r bas
ed on the p
atter
n of cons
umpti
on.
On th
is bas
is, U
S Phar
mace
utic
als and Vacc
ines i
n
ventor
y
levels
at wholesalers and in ot
her distribution
channels at
3
1 Dec
embe
r 202
1
wer
e es
tima
ted to am
oun
t to
approximat
ely f
our w
eeks of
turnov
er
.
This calculat
ion uses
thir
d par
ty i
nform
ation, t
he accu
racy of w
hich c
annot b
e totall
y
veri
ﬁed
, but is b
elieved to b
e suf
ﬁci
ently r
eliab
le for thi
s
purpose.
Legal and other disputes
In r
espe
ct of the a
ccou
nting po
licy for L
egal a
nd othe
r dispu
tes,
the fo
llowin
g brie
ﬂy des
crib
es the p
roce
ss by whi
ch we
deter
mine th
e level of pr
ovisi
on that is n
eces
sar
y.
In a
ccor
danc
e with th
e requi
remen
ts of IAS 37
, ‘
Provi
sion
s,
contingent
liabil
ities and
contingen
t assets
’
,
we
provide
for
anti
cipate
d sett
leme
nt cost
s wher
e an out
ﬂow of r
esour
ces i
s
considered probable and
a reliable
estimat
e ma
y be made
of
the li
kely outc
ome of th
e dispu
te and leg
al and ot
her exp
ense
s
arising from
claims a
gainst t
he Group.
We may bec
ome invol
ved in sig
niﬁc
ant le
gal pr
ocee
dings
, in
re
spec
t of whic
h it is not p
ossi
ble to me
aning
fully a
sse
ss
whether the
outcome will
result in a
probable outﬂow
, or t
o
qua
ntif
y or rel
iabl
y estim
ate the lia
bilit
y
, if any, that c
ould re
sult
fro
m ultima
te resol
ution o
f the pro
ceed
ings
. In the
se ca
ses
,
appropriate
disclosure about
such cases woul
d be incl
uded
in th
e Annua
l Repor
t
, but no pr
ovisio
n would be m
ade.
This position could
change o
ver
time and,
therefore,
there can
be no a
ssu
ranc
e that any lo
sse
s that re
sult fr
om the ou
t
co
me of
any le
gal pr
ocee
dings w
ill not exc
eed by a mate
rial a
mount th
e
amo
unt of the p
rovisi
ons re
por
ted in the G
roup’s ﬁnan
cial
statemen
ts.
Like m
any phar
mace
utic
al com
panie
s, we a
re face
d with
various
complex pr
oduct liabi
lity
, ant
i-t
rust and pa
ten
t lit
igation,
as we
ll as inve
stiga
tions of o
ur oper
ations c
ondu
cted by var
ious
gover
nment
al reg
ulator
y age
ncies
. Thr
ougho
ut the yea
r
, the
Ge
nera
l Coun
sel of th
e Group, a
s hea
d of the Gr
oup’
s leg
al
fun
ction
, and the S
enior V
ice P
res
ident a
nd Hea
d of Glob
al
Lit
igatio
n for the G
roup, w
ho is res
pons
ible for a
ll liti
gation a
nd
gover
nment i
nvestig
ation
s, rou
tinely b
rief th
e Chie
f Exe
cutive
Of
ﬁ
cer, the Chi
ef Fina
ncia
l Of
ﬁc
er and the B
oard o
f Dire
ctors
on th
e signi
ﬁca
nt litig
ation p
ending a
gains
t the Gr
oup and
gover
nment
al inves
tigati
ons of th
e Group
.
Th
ese me
etings
, as ap
prop
riate, de
tail th
e statu
s of signi
ﬁc
ant
litigation
and go
vernment
inv
estigations
and re
view ma
tters
suc
h as the nu
mber of c
laim
s notiﬁ
ed to us, i
nform
ation on
poten
tial cl
aims n
ot yet noti
ﬁed, a
sse
ssm
ent of the va
lidit
y of
claims, progress made in
settling claims, recent
settlement
level
s and pote
ntial r
eimbur
sem
ent by insu
rer
s.
Th
e meetin
gs als
o inclu
de an as
ses
smen
t of wheth
er or not
there is
suf
ﬁcient
informat
ion a
vailable
for us
to
be able
to
make
a rel
iable e
stim
ate of the pote
ntial ou
tcome
s of the di
sputes
.
Of
ten
, exte
rnal c
ounse
l ass
istin
g us with va
riou
s litiga
tion
mat
ters a
nd invest
igatio
ns will a
lso as
sis
t in the br
ieﬁn
g of the
Board and senior management.
Following these d
iscussions,
for th
ose mat
ters w
here i
t is pos
sibl
e to make a reli
able e
stim
ate
of the a
mount o
f a provis
ion, i
f any
, that may b
e requi
red, th
e
level o
f provis
ion for l
egal a
nd other d
ispute
s is revi
ewed and
adjusted
as appropriat
e. These matters are
discussed further
in No
te 46 to the ﬁna
ncia
l statem
ents, ‘
Leg
al pro
ceed
ings’
.
Critical accounting p
olicies
continued
Strategic repor
t
Th
e Strate
gic rep
or
t was ap
prove
d by the Bo
ard of D
irec
tors on
28 Fe
brua
ry 2022
Ia
in Ma
ckay
Chief Financial Of
ﬁcer
28 Fe
brua
ry 2022
82
GS
K Ann
ual R
epor
t 2021
C
orporate
G
o
v
er
na
nce
In t
his sec
tion
Th
e Boar
d and GS
K Lead
ers
hip T
e
am
83
Cha
ir’s Gover
nanc
e statem
ent
89
Board roles an
d responsibil
ities
92
Board committee inf
ormation
93
Board architectu
re
94
Board activity
95
Bo
ard pro
gres
s in 202
1
96
Board’
s approa
ch t
o cont
inuous
engagement
99
Bo
ard-l
ed pur
pose a
nd cultu
re
1
02
Board performance
1
03
Board committee reports
1
04
Se
ction 1
72 st
atement
1
1
6
Directors’
report
1
1
7
82
GS
K Ann
ual R
epor
t 2021
GS
K Ann
ual R
epor
t 2021
83
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Key
Committee Chair
N
No
mina
tion
s & Cor
por
ate Gove
rna
nce
A
Aud
it & Ri
sk
R
Remuneration
S
Science
C
Corporate Responsibility
T
he Boar
d
Sir J
ona
than Sy
mond
s, C
BE
Non-E
xecutive
Chair
Age
:
63
Nation
ality:
British
Appointed:
1 Sept
ember 2
0
1
9
N
Sk
ills a
nd exp
erie
nce
Jon has e
xtensive in
ternation
al ﬁnancial, l
ife sciences
and go
vernance e
xperience.
Jo
n ser
ved a
s an In
dep
ende
nt No
n-E
xe
cuti
ve Dir
ecto
r of HS
BC Ho
ldin
gs pl
c from A
pri
l 201
4, a
nd as D
epu
ty
Gr
oup Ch
air
man f
rom Au
gust 2
0
1
8, un
til hi
s reti
reme
nt fr
om the B
oar
d in Feb
rua
ry 2
020. He w
as pr
evio
usly
Ch
air
man of H
SB
C Bank p
lc, C
hief F
ina
nci
al Of
ﬁ
cer of N
ovar
ti
s AG, Pa
rt
ner an
d Ma
nagin
g Dir
ecto
r of Go
ldma
n
Sa
chs
, Chie
f Fin
anci
al O
fﬁ
cer o
f Ast
ra
Zene
ca pl
c, an
d a Par
tne
r at KP
MG
. His g
over
nanc
e exp
eri
ence i
ncl
udes
ro
les a
s Non
-E
xecu
tive D
ire
ctor a
nd Cha
ir of th
e Audi
t Co
mmit
tee
s of Di
ageo p
lc an
d Qin
etiQ G
rou
p plc an
d
Non-E
xecutiv
e Chair
of Prot
eus Digital Health
Inc.
Jo
n is a Fe
llow of t
he Ins
titu
te of Ch
ar
tere
d Acc
ount
ants i
n Engl
and a
nd Wale
s.
Ex
ternal
appointments
Non-E
xecutiv
e Director
, Rubius Therapeutics, Inc; Non-Executive Director
,
Genomics England Limit
ed ha
ving
pr
evio
usly s
er
ved a
s its Ch
air
man; M
embe
r
, Eur
ope
an Rou
nd T
abl
e for In
dus
try
; Seni
or Ad
viso
r to Cha
tham H
ous
e.
Dame Emm
a
Walmsley
Chi
ef E
xecuti
ve Of
ﬁc
er
Age
:
52
Nation
ality:
British
Appointed:
1 Janu
ary 20
1
7
Chief Executive Ofﬁcer from
1 Ap
ril 201
7
Sk
ills a
nd exp
erie
nce
Pr
ior to h
er app
oin
tmen
t as GS
K’s C
EO, Emma w
as the C
EO of GS
K C
onsu
mer H
ealt
hca
re, a J
oint Vent
ure
be
twe
en GS
K and N
ovar
tis
, fro
m its cr
eati
on in M
arc
h 201
5
. Emm
a join
ed GS
K in 201
0 fro
m L
’Or
eal
, havin
g
wor
ked fo
r 1
7 ye
ars i
n a vari
ety o
f role
s in Pa
ris
, Lon
don, N
ew Y
ork an
d Sha
ngha
i. Em
ma was p
revi
ous
ly a
Non-E
xecutiv
e Director
of Diageo
plc.
Em
ma hol
ds an M
A in Cl
as
sic
s and M
oder
n La
ngu
ages f
rom O
xf
ord U
niver
sit
y.
Ex
ternal
appointments
Independent direct
or
,
Microsoft, Inc.
Ia
in Ma
ckay
Chief Financial Of
ﬁcer
Age
:
60
Nation
ality:
British
Appointed:
1
4 January 20
1
9
Chief Financial
Ofﬁcer from
1 Ap
ril 201
9
Sk
ills a
nd exp
erie
nce
Pr
ior to j
oini
ng GS
K, I
ain w
as Gr
oup F
inan
ce Di
rec
tor at HS
BC H
oldi
ngs pl
c, a po
sit
ion he h
eld fo
r eig
ht yea
rs.
A ch
ar
tere
d acc
ount
ant, I
ain h
as li
ved an
d work
ed in As
ia
, the US a
nd Eu
rope a
nd be
fore H
SBC w
as at G
ener
al
Electric, Schlumberger
Dowell
and
Price W
aterhouse.
Iain was
previously
a T
rustee of
the
British Heart
Fo
unda
tion a
nd Ch
air of i
ts Aud
it and R
isk C
om
mit
tee.
Ia
in ho
lds an M
A in B
usin
ess S
tudi
es an
d Acc
ount
ing an
d hold
s an Ho
nor
ar
y Doc
torate f
rom A
ber
dee
n Univ
ers
ity
in Sco
tland.
Ia
in is a m
embe
r of the I
nst
itute o
f Cha
rte
red A
cco
unta
nts of S
cotl
and
.
Ex
ternal
appointments
Me
mbe
r
, Co
urt o
f the U
niver
sit
y of A
ber
deen a
nd Ch
air of i
ts Re
mune
rati
on Co
mmi
ttee; M
emb
er, The 100 Gr
oup
and Chair o
f its
Stakeholder Communications
and Reporting Committee.
Dr H
al Bar
ron
Chief Scient
iﬁc Of
ﬁcer
and President, R
&D
Age
:
59
Nation
ality:
American
Appointed:
1 Ja
nuar
y 201
8
Chief Scientiﬁc Ofﬁcer and
President, R&D from 1 April 20
18
Sk
ills a
nd exp
erie
nce
Pr
ior to j
oini
ng GS
K, H
al wa
s Pre
sid
ent
, R&D at C
alic
o LLC (Ca
lifo
rni
a Life C
om
pany), an A
lpha
bet-fu
nde
d
co
mpa
ny that u
ses ad
vanc
ed te
chno
logi
es to in
cre
ase u
nder
st
andi
ng of li
fes
pan bi
olo
gy. Pri
or to thi
s, H
al was
E
xecu
tive V
ice P
res
ide
nt, H
ead of G
lob
al Pr
odu
ct Deve
lop
ment
, and C
hief M
edi
cal O
f
ﬁc
er of Ro
che, r
esp
ons
ible
for a
ll the p
rod
ucts i
n the c
ombi
ned p
ort
fol
io of Ro
che a
nd Ge
nente
ch. A
t Gen
entec
h, he wa
s Se
nior V
ice
Pr
esi
dent o
f Deve
lopm
ent an
d Chi
ef Me
dic
al Of
ﬁ
cer. Ha
l was a N
on-
Exe
cuti
ve Di
rect
or and C
hai
r of the S
cie
nce
& T
ech
nolo
gy C
ommi
tte
e at Jun
o Ther
ape
uti
cs, I
nc un
til M
arch 2
0
1
8, wh
en it wa
s ac
quir
ed by C
elge
ne
C
orpo
rati
on. H
al pr
evio
usly s
er
ved a
s a Non
-E
xec
utive B
oar
d Dir
ecto
r of GR
A
IL
, In
c and a
n Advi
sor
y Bo
ard
Member of V
erily Life Sciences LL
C.
As a
nnou
nce
d on 1
9 Jan
uar
y 2022 T
ony Woo
d will s
ucc
eed H
al as C
SO a
nd He
ad of R&
D wit
h ef
fect f
rom
1 Aug
ust 20
22. Fro
m that d
ate, H
al wil
l tra
nsit
ion to a no
n-i
ndep
end
ent No
n-E
xe
cuti
ve Dir
ecto
r wit
h addi
tion
al
responsibilities to
support R&D.
Ex
ternal
appointments
No
n-E
xe
cuti
ve Dir
ecto
r of Al
tos L
abs I
nc; As
soci
ate Adj
unc
t Prof
ess
or, Epi
demi
olog
y & Bio
sta
tist
ics
, Uni
ver
sit
y
of Calif
ornia, San Franci
sco.
Board composition
Composition
E
xecut
ive 23%
No
n-E
xecu
tive 77%
T
enur
e Non-Executive
Up to 3 yea
rs
40%
3-
6 year
s
20%
6-
9 year
s
30%
9
-
1
0 years
10%
Board diversit
y
Gender
M
ale
62%
Female
38%
Ethnicity
Ethn
ical
ly diver
se
1
5%
Wh
ite 85%
See more information on page
1
10
International experience
Global 85%
U
S
10
0
%
Europe 7
7%
EMAP 69%
8
4
GS
K Ann
ual R
epor
t 2021
Charles Banc
roft
Independent Non-Executive
Di
rec
tor
Age
:
62
Nation
ality:
American
Appointed:
1 May 2
020
A
N
Sk
ills a
nd exp
erie
nce
Charlie has a
wealth of
ﬁnancial and
management e
xperience in global
biopharma.
Ch
arli
e reti
red f
rom a su
cc
ess
ful c
are
er at Br
isto
l Myer
s Squ
ibb (B
MS) in M
ar
ch 2020 w
here h
e hel
d a numb
er
of le
ade
rsh
ip rol
es in c
omm
erci
al, s
trat
egy an
d ﬁna
nce
. Begi
nnin
g his c
are
er at B
MS in 1984
, he hel
d pos
itio
ns
of increasing
responsibility within
the
ﬁnance organisation
and
had commercial
operational
responsibility for
Latin
Am
eri
ca
, Mid
dle E
ast
, Afr
ica
, Ca
nada
, Ja
pan a
nd seve
ral P
aci
ﬁc Ri
m cou
ntri
es. H
e was a
ppo
inted C
hief
Fi
nanc
ial O
f
ﬁce
r in 201
0, Ch
ief Fi
nan
cial O
f
ﬁce
r and E
xe
cuti
ve Vic
e Pre
sid
ent
, Glo
bal B
usin
ess O
per
atio
ns in
201
6 and E
xec
utiv
e Vic
e Pre
sid
ent an
d Hea
d of In
tegr
ation a
nd Str
ateg
y & Bus
ines
s Deve
lop
ment i
n 201
9
.
Ch
arli
e suc
ces
sf
ully s
teer
ed BM
S thr
ough a p
eri
od of st
rate
gic tr
ans
form
atio
n, inc
ludi
ng it
s rec
ent $7
4 bill
ion
ac
quis
itio
n of C
elge
ne. C
harl
ie al
so ser
ve
d as a me
mbe
r of the B
oar
d of Co
lgate
-Pa
lmo
live C
omp
any fro
m 201
7
unt
il Ma
rch 202
0.
Ex
ternal
appointments
Board Member
, K
odiak
-Sciences Inc
; Board
Member
, Bio
V
ector Inc;
Advisory Board Member
, Dre
xel Univ
ersity’s
LeBow College of
Business.
Th
e Boa
rd dete
rmi
ned th
at Cha
rli
e has r
ece
nt and r
elev
ant ﬁn
anci
al ex
per
ienc
e and a
gree
d that h
e has t
he
ap
prop
riat
e qual
iﬁc
atio
ns an
d backg
rou
nd to be an a
udi
t comm
it
tee ﬁna
nci
al exp
er
t.
Manvinder Singh
(V
ind
i) Banga
Senior Independent
Non-E
xecut
ive
Di
rec
tor
Age
:
67
Nation
ality:
British
Appointed:
1 Sept
ember 2
0
1
5
Senior Independent Non-Executive
Di
rec
tor fro
m 5 May 201
6
N
A
R
Sk
ills a
nd exp
erie
nce
Vi
ndi ha
s many y
ear
s of co
mmer
cia
l expe
rie
nce a
nd a tra
ck re
cor
d of del
iver
ing ou
tst
andi
ng per
fo
rma
nce i
n
highly competitiv
e global
consumer-
focused businesses.
Pr
ior to j
oini
ng GS
K, V
ind
i spen
t 33 yea
rs at U
nile
ver pl
c, whe
re hi
s las
t role (a
mong
st seve
ral s
eni
or pos
iti
ons)
wa
s Pre
sid
ent of th
e Glo
bal F
ood
s, Ho
me and P
ers
ona
l Car
e busi
nes
ses
, and a m
emb
er of th
e Unil
ever
E
xecu
tive B
oar
d. Vi
ndi sa
t on the P
rim
e Min
iste
r of Ind
ia’s Cou
nci
l of T
rade & I
ndu
str
y fro
m 200
4 to 201
4 a
nd
wa
s on the B
oar
d of Gove
rno
rs of th
e Ind
ian I
nsti
tute of M
an
agem
ent (I
I
M), Ahm
eda
bad
. Vind
i is al
so the
re
cipi
ent of t
he Pad
ma Bh
usha
n, on
e of In
dia’s hig
hes
t civi
lia
n hono
urs
. Vin
di ha
s been a N
on-
E
xecu
tive D
irec
tor
of th
e Co
nfed
erat
ion of B
rit
ish I
ndus
tr
y (
CB
I) an
d Tho
mson R
eute
rs C
orp, C
hai
rman o
f the Su
per
vi
sor
y Bo
ard of
Ma
use
r Gro
up, Ch
airm
an of K
all
e Gmb
H, Di
rec
tor of H
igh R
idge B
ran
ds LLC
, Mem
ber o
f the In
do UK C
EO
Fo
rum
, and Se
nio
r Inde
pen
dent D
ire
ctor o
f Mar
ks & Sp
enc
er Gr
oup pl
c.
Ex
ternal
appointments
Partner,
Clayton Dubilier
& Rice
; Non-Executive Director
,
The Economist
Newspaper Limited
;
Member,
Holdingham
International
Advisory Board;
Board Member
,
Internat
ional Chamber
of Commerce Un
ited Kingdom
;
Member
,
Gov
erni
ng Bo
ard of t
he In
dian S
cho
ol of B
usin
ess
, Hyd
era
bad; Me
mbe
r
, Glo
bal L
ead
ers
hip C
ounc
il of Sa
ïd
Bu
sine
ss S
choo
l, Ox
fo
rd; Cha
ir of th
e Boa
rd of Trust
ees
, Mar
ie Cu
rie; C
hair
man
, UK G
overn
ment I
nves
tme
nts.
Dr A
nne Be
al
Independent Non-Executive
Di
rec
tor
Age
:
59
Nation
ality:
American
Appointed:
6 May 2
02
1
C
A
Sk
ills a
nd exp
erie
nce
Anne brings
extensive
healthcare experience t
o
the Board
as a
physician
and ent
repreneur combined
with
a
pa
ssi
on for p
atie
nt adv
oca
cy. She is a r
eco
gnis
ed he
alt
h poli
cy exp
er
t in the d
evel
opme
nt of gl
oba
l and nat
ion
al
pr
ogra
mme
s for im
prov
ing he
alt
hca
re ac
ces
s for al
l pati
ent gr
oup
s and in e
nsur
ing th
e voic
e of pat
ient
s is
reﬂected in
research programmes.
Pr
ior to h
er cur
ren
t role
s, A
nne sp
ent s
ix yea
rs at H
ar
vard M
ed
ica
l Scho
ol an
d Ma
ssa
chus
ett
s Gen
era
l Hos
pit
al,
where she w
as an instruct
or in
paediatrics. She has
also held leadership
roles at
the Commonw
ealth Fund
and
the A
etna F
ound
atio
n. An
ne wa
s prev
ious
ly De
put
y Ex
ecut
ive Di
rec
tor an
d Chie
f Eng
agem
ent O
fﬁ
cer f
or Th
e
Pat
ient-
Ce
nter
ed Out
come
s Res
ear
ch In
sti
tute in t
he U.S
. an
d Chie
f Pati
ent O
fﬁ
cer a
nd Gl
oba
l Hea
d of Pati
ent
Solutions at
Sanoﬁ.
Ex
ternal
appointments
Founder and
CEO
, Absolut
eJOI Skincare; Board Member
,
AcademyHealth
;
Board Member
, Prolacta
Bioscience.
Da
me Vivi
enne C
ox
Independent Non-Executive
Director & W
or
kforce
Engagement
Director
Age
:
62
Nation
ality:
British
Appointed:
1 Jul
y 201
6
R
C
Sk
ills a
nd exp
erie
nce
Vi
vie
nne ha
s wid
e exp
erie
nce o
f busi
nes
s gai
ned in t
he en
ergy, na
tura
l res
ourc
es an
d pub
lish
ing se
ctor
s. S
he
al
so ha
s a deep u
nde
rst
andi
ng of re
gul
ator
y org
anis
ati
ons an
d gover
nme
nt.
Vi
vie
nne wor
ked fo
r BP pl
c for 28 ye
ars
, in B
rit
ain an
d Con
tine
nta
l Euro
pe, i
n post
s inc
ludi
ng Ex
ecu
tive V
ice
Pr
esi
dent a
nd Ch
ief E
xec
utiv
e of BP
’s ga
s, pow
er and r
enew
able b
usi
nes
s and it
s alte
rnat
ive en
ergy u
nit
.
Vi
vie
nne wa
s prev
iou
sly a No
n-E
xe
cuti
ve Dir
ecto
r of BG G
roup p
lc an
d Rio T
into pl
c, th
e Seni
or In
dep
ende
nt
Di
rec
tor of Pe
ars
on pl
c, Ch
airm
an of t
he Sup
er
vis
or
y Boa
rd of Vall
oure
c and th
e Lea
d Ind
epe
nden
t Dir
ecto
r at
the UK Gov
ernment’s
Department for Int
ernational Dev
elopment. Vivienne w
as made a
Dame Commander o
f
the O
rde
r of the B
rit
ish E
mpir
e (DB
E) in t
he 2022 U
K New Y
ear
’s Hono
urs L
ist f
or ser
vi
ces t
o sust
ain
abil
ity,
diversity,
and
inclusion in
business.
Ex
ternal
appointments
Chair Designat
e, Victrex
plc
; Non-Executive Direct
or
, S
tena
AB;
Advisory Board Member
, A
frican Leadership
Institute
;
Vice President, Energy
Institute
;
Advisory Board Member
,
Montrose Associates
; In
vestment
Advisor
,
Q
ant
X V
entu
res; C
hair, Ro
sal
ind Fr
ank
lin I
nsti
tute; Vi
ce Ch
air, Sa
ïd Bus
ine
ss Sc
hoo
l, Ox
for
d and M
emb
er of i
ts
Global Leadership
Council
; Pa
tron, Hospice
of
St F
rancis.
The Boar
d
continued
Key
Committee Chair
N
No
mina
tion
s & Cor
por
ate Gove
rna
nce
A
Aud
it & Ri
sk
R
Remuneration
S
Science
C
Corporate Responsibility
GS
K Ann
ual R
epor
t 2021
85
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Dr H
arr
y (Hal) C D
iet
z
Independent Non-Executive
Dir
ector a
nd Sci
entiﬁ
c &
Medical E
xpert
Age
:
63
Nation
ality:
American
Appointed:
1 Ja
nuar
y 2022
S
Sk
ills a
nd exp
erie
nce
Ha
l bri
ngs ex
ten
sive ex
per
ien
ce in th
e ﬁel
d of hum
an ge
neti
cs wh
ich is c
ent
ral to G
SK
’
s ap
proa
ch to R&
D. He
is a fo
rme
r Pre
sid
ent of t
he Am
eric
an S
ocie
ty of H
uma
n Gen
etic
s and i
s rec
ogni
sed a
s the wo
rld’s l
eadi
ng
au
thor
ity o
n a gen
etic di
sor
der k
nown a
s Ma
rf
an Sy
ndro
me. H
e also b
rin
gs exp
eri
enc
e in deve
lopm
ent of n
ovel
therapies, through his
role as
Founder of
and Scientiﬁc
Adviser to
Blade Therapeutics, a biopharmaceutical
co
mpa
ny focu
sed o
n dise
as
e-mo
dif
yi
ng tre
atme
nts for ﬁ
bro
tic an
d neur
ode
gene
rati
ve dis
ea
ses
. In tot
al, H
al
has authored
282
original
publications
in
peer-re
viewed
journals
across his
career
.
As a p
hysi
cian s
cie
ntis
t, he h
as de
dic
ated hi
s enti
re ca
ree
r to the ca
re an
d stud
y of ind
ivi
dua
ls wit
h heri
tab
le
connective t
issue disorders wit
h primary perturbations o
f extracellular
matrix homeostasis
and function.
His lab
ha
s ide
ntiﬁ
ed th
e gene
s for m
any of th
ese c
ondi
tio
ns, fo
r whi
ch he us
es mo
del sy
stem
s to eluc
ida
te dise
as
e
mechanisms.
Ha
l has r
ece
ived m
ulti
ple pr
est
igi
ous awa
rds in
clu
ding th
e Cur
t Ste
rn Awar
d fro
m the A
meri
can S
oci
ety o
f
Hu
man G
enet
ics
, the C
olo
nel H
arl
and Sa
nde
rs Li
feti
me Ach
ievem
ent Awa
rd in M
edi
cal G
ene
tic
s, the Taubm
an
Pr
ize fo
r exce
llen
ce in tr
ans
lati
onal m
edi
cal s
cie
nce
, the Ha
rri
ngto
n Pri
ze fro
m the Am
eri
can S
oci
ety f
or Cli
nic
al
Inv
esti
gati
on an
d the Ha
rri
ngto
n Dis
cover
y I
nsti
tute, t
he Pa
sar
ow Awar
d in Car
diov
asc
ular R
ese
arc
h, the
In
Bev-
Ba
ille
t Lato
ur He
alth P
riz
e from t
he co
untr
y of B
elgi
um, an
d the Re
se
arch A
chie
veme
nt Awar
d from t
he
American Heart Association.
He i
s an ind
ucte
e of the A
mer
ica
n Soc
iet
y for C
lini
cal I
nves
tiga
tion
, Ame
ric
an As
soc
iati
on for t
he Adv
anc
emen
t
of Science,
Association
of
American Physicians,
National
Academy
of
Medicine, and
National
Academ
y of
Sciences.
Ex
ternal
appointments
Vi
ctor A
. M
cKu
sick P
rof
ess
or of Pa
edi
atric
s, M
edi
cin
e, and M
ole
cul
ar Bi
olog
y & Gen
etic
s in th
e Dep
ar
tmen
t of
Ge
neti
c Med
ici
ne, T
he Joh
ns Ho
pki
ns Uni
vers
it
y Scho
ol of M
edi
cine; I
nves
tiga
tor, Howar
d Hug
hes M
edi
cal
Institute
;
Founder and
Scientiﬁc A
dvisor
, Blade
Therapeutics;
Consultant and
Chair of
Scientiﬁc A
dvisory
Board, Aytu Biopharma
; Independent
Chair
,
GSK’s Human
Genetics Scientiﬁc
Advisory Board.
L
ynn Elsenhans
Independent Non-Executive
Di
rec
tor
Age
:
65
Nation
ality:
American
Appointed:
1 Jul
y 201
2
C
N
A
Sk
ills a
nd exp
erie
nce
Lynn h
as a we
alth o
f expe
rie
nce o
f runn
ing a gl
obal b
usi
nes
s and s
igni
ﬁc
ant k
nowl
edge o
f the gl
oba
l mark
ets in
which GSK o
perates.
Lynn s
er
ved a
s Chai
r
, Pr
esi
dent a
nd Ch
ief E
xec
utive O
f
ﬁce
r of Su
noco I
nc fr
om 20
09 to 201
2. Pr
ior to jo
inin
g
Su
noco i
n 200
8 as P
resi
den
t and Ch
ief E
xec
uti
ve Of
ﬁc
er, L
yn
n worke
d for Roy
al Du
tch She
ll, w
hich s
he jo
ined
in 1980
, and wh
ere s
he hel
d a numb
er of s
enio
r rol
es, i
nclu
ding E
xe
cuti
ve Vic
e Pr
esi
dent
, Glo
bal
Ma
nuf
actu
ring f
rom 20
05 to 20
08
. Lynn wa
s prev
ious
ly a No
n-E
xe
cuti
ve Dir
ecto
r of the F
ir
st T
ee of G
reate
r
Ho
usto
n, Fl
owse
rve C
or
pora
tion
, the Texas M
edi
cal C
ent
er
, an
d a T
r
uste
e of the U
nite
d W
ay of G
reate
r
Houston.
Ex
ternal
appointments
Non-E
xecutiv
e Director
and Chair
of the
Governance
and Corporate
Responsibility Committee, Baker Hughes
C
ompa
ny; Boa
rd Di
rec
tor an
d Cha
ir of the A
udi
t Com
mit
tee, S
audi A
ra
mco; Ad
viso
ry B
oar
d Mem
ber, Jo
hns
Hopkins University Whiting
School o
f Engineerin
g;
Member
, A
udit Committee Leadership
Network.
Dr L
aurie G
limc
her
Independent Non-Executive
Dir
ector a
nd Sci
entiﬁ
c &
Medical Exper
t
Age
:
70
Nation
ality:
American
Appointed:
1 Sept
ember 2
0
1
7
A
S
Sk
ills a
nd exp
erie
nce
L
auri
e bri
ngs sc
ien
tiﬁ
c and pu
blic h
eal
th exp
er
tise t
o the Bo
ard
’
s del
ibe
rati
ons, a
nd a we
alth o
f glob
al, p
ubli
cly
listed
pharmaceutical
business experien
ce.
In a
ddit
ion to a n
umbe
r of sen
ior l
eade
rsh
ip po
siti
ons h
eld at b
oth Ha
rv
ard M
edic
al S
choo
l and H
ar
vard S
cho
ol
of P
ubli
c Hea
lth
, Lau
rie h
as al
so ser
ve
d as Ste
phen a
nd Su
zan
ne Weis
s Dea
n and P
rofe
sso
r of Me
dic
ine at
W
eill Cornell
Medical College
and as
an A
ttending
Physician
at
the
New Y
ork Presb
yterian Hospital/Weill
C
orne
ll Me
dic
al C
enter. L
auri
e step
ped d
own fr
om the B
oar
d of Br
istol
-M
yer
s Squi
bb (B
MS) in 201
7 a
fte
r
se
rv
ing fo
r 20 year
s on i
ts Boa
rd. L
aur
ie wa
s prev
ious
ly a No
n-E
xe
cuti
ve Dir
ecto
r of the Wate
rs C
orp
orat
ion
an
d co-f
ound
er and C
hai
r of the S
cie
ntiﬁ
c Adv
isor
y B
oard o
f Que
ntis T
her
ape
utic
s In
c.
Ex
ternal
appointments
Professor of
Medicine,
Har
v
ard Medical
School;
CEO
,
President and
an A
ttending
Physician,
Dana-Farber
Cancer Institut
e.
Me
mbe
r
, US N
ation
al Ac
ade
my of Sci
enc
es an
d the N
atio
nal Ac
ade
my of Me
dic
ine; Me
mbe
r
, Sci
enti
ﬁc
Ste
erin
g Co
mmit
tee of t
he Par
ker I
nsti
tute fo
r Can
cer I
mmun
othe
rapy; I
nde
pen
dent D
ire
ctor, An
alog D
evi
ces
In
c; Dir
ector a
nd M
embe
r of the E
xe
cuti
ve Co
mmit
tee
, Bre
ak
thro
ugh Ca
nce
r; Me
mber, Sc
ient
iﬁc A
dvi
sor
y
Boards of
Repare
Therapeutics Inc,
Abpro Therapeutics, Kaleido
Biosciences Inc,
BioCentury Inc and
Stand
Up 2 C
anc
er.
Ju
dy Lewe
nt jo
ined t
he Boa
rd on 1 A
pri
l 201
1. She r
etir
ed fr
om the B
oar
d on 5 Ma
y 202
1
.
The Boar
d
continued
Key
Committee Chair
N
No
mina
tion
s & Cor
por
ate Gove
rna
nce
A
Aud
it & Ri
sk
R
Remuneration
S
Science
C
Corporate Responsibility
86
GS
K Ann
ual R
epor
t 2021
The Boar
d
continued
Key
Committee Chair
N
No
mina
tion
s & Cor
por
ate Gove
rna
nce
A
Aud
it & Ri
sk
R
Remuneration
S
Science
C
Corporate Responsibility
Dr J
esse G
oodm
an
Independent Non-Executive
Dir
ector a
nd Sci
entiﬁ
c &
Medical Exper
t
Age
:
70
Nation
ality:
American
Appointed:
1 Ja
nuar
y 201
6
S
C
Sk
ills a
nd exp
erie
nce
Je
sse b
rin
gs sci
enti
ﬁc a
nd pub
lic he
alt
h expe
rt
ise to th
e Boa
rd’s de
libe
rati
ons
. He ha
s a wea
lth of e
xper
ien
ce
sp
anni
ng sci
enc
e, me
dici
ne, va
cci
nes
, reg
ulati
on an
d publ
ic he
alth
, and h
as a pr
oven re
cor
d in add
res
sin
g pre
ssi
ng
pub
lic h
eal
th nee
ds fro
m both t
he ac
adem
ic an
d fede
ral s
ecto
rs
.
Jesse previously
served in senior
leadership position
s at
the
US Food
and Drug
Administration
(FD
A),
includin
g
most recently
as the
FDA
’s Chief
Scientist
and pre
viously as
Deputy Commissioner for
Science and
Public Health
an
d as Di
rec
tor of th
e Cen
ter for B
iol
ogic
s Eval
uati
on and R
ese
arc
h (CBE
R).
Je
sse p
layed a l
ead
ers
hip ro
le in d
evelo
ping t
he FDA’s Regu
lator
y Sc
ien
ce and M
edi
ca
l Cou
nterm
ea
sure
s Ini
tiat
ives
an
d has wo
rked c
oll
abor
ativ
ely wi
th in
dust
ry, ac
ade
mia
, gover
nme
nt and g
loba
l pub
lic he
alt
h and re
gul
ator
y
partners to prepare
for
and respond
to
major pu
blic health
threats,
including
emerging
infectious
diseases, disasters
an
d terr
oris
m. He l
ed th
e FDA
’s res
pon
se to West N
ile V
irus a
nd to th
e 200
9 H
1
N
1 inﬂ
uen
za pa
ndem
ic and s
er
ved
on th
e Sen
ior L
eade
rsh
ip T
eam f
or the 2010 Whit
e Hous
e Me
dic
al Co
unter
mea
sur
e Revi
ew. Jes
se wa
s prev
ious
ly a
me
mber o
f both t
he Sci
ent
iﬁc A
dvis
or
y Co
mmit
tee a
nd the R
egul
ator
y and L
ega
l W
or
kin
g Gro
up of the C
oa
liti
on
for Epidem
ic Preparedness Innov
ations
(
CEPI).
Ex
ternal
appointments
Pr
ofes
sor o
f Med
ici
ne and A
tten
ding P
hysi
cia
n, In
fect
ious D
ise
as
es, G
eor
getow
n Uni
vers
it
y and di
rec
ts the
Ge
org
etown U
nive
rsi
ty C
ente
r on Me
dic
al Pr
oduc
t Acc
ess
, Saf
ety a
nd Stew
ards
hip (CO
M
P
ASS); B
oard M
emb
er
(
formerly President
),
United
Stat
es Pharmacopeia (USP
);
Board Member
,
Scientiﬁc Counselors f
or Infectious
Diseases
,
Centers f
or Disease Control
and Prev
ention
(
CDC)
; Board
Member
, Int
ellia Therapeutics
Inc;
Member
,
US N
atio
nal Ac
ade
my of M
edic
ine; Bo
ard M
emb
er, Adap
tive P
hag
e Ther
ape
utic
s, I
nc.
Urs Rohner
Independent Non-Executive
Di
rec
tor
Age
:
62
Nation
ality:
S
wiss
Appointed:
1 Ja
nuar
y 201
5
R
N
Sk
ills a
nd exp
erie
nce
Ur
s has a b
roa
d busi
nes
s, ba
nki
ng an
d lega
l bac
kgrou
nd an
d exte
nsi
ve sen
ior le
vel exp
eri
enc
e at mult
inat
iona
l
companies.
Ur
s has s
er
ved a
s Cha
irma
n on a num
ber o
f Boa
rds
, mos
t rec
entl
y for Cr
edit S
uis
se Gr
oup fr
om 201
1 unt
il
Ap
ril 2021. Pri
or to joi
ning C
red
it Sui
ss
e in 200
4, Ur
s ser
ve
d as Ch
airm
an of t
he E
xecu
tive B
oard a
nd CEO o
f
Pr
oSi
ebe
n and P
roS
iebe
nSa
t.
1 Med
ia AG. T
his f
ollow
ed a num
ber of y
ear
s in pr
ivate p
ract
ice a
t majo
r law
ﬁr
ms in Sw
it
zerl
and an
d the U
S, hav
ing be
en ad
mit
ted to th
e bar
s of the c
anto
n of Zur
ich in S
wit
zerl
and i
n 1
9
86
an
d the st
ate of N
ew Y
o
rk in th
e US in 1990
.
Ex
ternal
appointments
Member,
Interna
tional A
dvisory Board, Investcorp
;
Chair
,
V
ega Cyber
Associates A
G.
GS
K Ann
ual R
epor
t 2021
87
Strategic report
Governance and remuneration
Financial st
atements
Investor information
G
S
K L
eadership T
eam
Sk
ills a
nd exp
erie
nce
Dr H
al Bar
ron
1
Chief Scient
iﬁc Of
ﬁcer
and President, R
&D
Ha
l join
ed GS
K and t
he GS
K Lea
der
ship Team (G
L
T) in 2
0
1
8. S
ee Boa
rd bi
ogr
aphi
es on p
age
s
83 to 8
6.
Roger Connor
Presiden
t,
V
a
ccines
and
Glo
bal
Health
Ro
ger jo
ined t
he GLT in 201
3. H
e was ap
poi
nted P
res
iden
t of GS
K V
ac
cine
s in 201
8. I
n addi
tion
to le
ade
rshi
p of the Vac
cin
es bus
ine
ss
, he lea
ds GS
K’s G
loba
l Hea
lth o
rgan
isa
tion s
inc
e 202
1
and is
also responsible for
GSK’s g
lobal procurement
organisation. Roger
is a
member of
the
Bo
ard of G
avi
, the Vacc
ine A
llia
nce
, and th
e Cha
ir of th
e Inter
nati
ona
l Fed
erat
ion of
Pharmaceutical Manufacturers &
Associations (IFPMA) CEO
V
accines Committee.
Previously
he wa
s Pr
esi
dent
, Glo
bal M
anu
fact
urin
g & Supp
ly an
d, be
fore th
at, V
ice P
res
ide
nt, O
fﬁ
ce of t
he
CEO a
nd C
orpo
rate S
trate
gy. Roge
r joi
ned GS
K in 1998 fr
om As
tra
Zen
ec
a. Ro
ger ho
lds a
de
gree i
n Me
chan
ica
l and M
anu
fact
urin
g Engi
nee
ring f
rom Q
uee
n’
s Uni
ver
sit
y
, Be
lfa
st and a
Ma
ste
r’s in M
anuf
actu
ring L
ead
ers
hip fr
om Ca
mbr
idge U
nive
rsi
ty. He i
s a Cha
rte
red Ac
cou
nta
nt.
Diana Conr
ad
Chief People Ofﬁ
cer
Di
ana wa
s app
oint
ed Chi
ef Peo
ple O
f
ﬁce
r and me
mbe
r of the G
L
T in Ap
ril 201
9. Sh
e was
pr
evio
usly S
eni
or Vi
ce Pr
esi
dent
, HR
, Ph
arm
aceu
tic
als R&
D fro
m 201
6 w
her
e she pl
ayed a key
strategic
role as leader
of t
he R&D people
and cu
lture agenda
to
support its transformation.
Di
ana j
oine
d GSK C
ana
da’s HR tea
m in 20
00 wh
ere s
he hel
d seve
ral ro
les o
f incr
ea
sing
responsibility before
becoming Senior
Vice President,
HR for
Consumer Healthcare in
2009.
Pr
ior to j
oini
ng GS
K, s
he he
ld HR r
oles i
n com
pani
es in
clu
ding G
E Cap
ita
l, Ge
nnum C
orp
ora
tion
and Zenon
Environmental
Laboratories. Diana has an Honours Bachelor
of Arts from
McM
aster
University in Canada.
Ja
mes For
d
SVP a
nd Gro
up Gene
ral C
ouns
el,
Legal and Complian
ce
Ja
mes j
oine
d the G
L
T i
n 201
8, wh
en he wa
s app
ointe
d Sen
ior V
ice P
res
iden
t and G
roup G
ene
ral
C
ouns
el, L
egal a
nd C
ompl
ianc
e. H
e join
ed GS
K in 1
995 a
nd ha
s ser
ve
d as Ge
ner
al Co
unse
l
Consumer Healthcare, General Counsel Global Pharmaceuticals, Vice President of Corporate
Le
gal a
nd was A
ctin
g Hea
d of Gl
obal E
thic
s and C
om
plia
nce
. Pri
or to GS
K, J
ame
s was a s
olic
itor
at Cl
if
ford C
han
ce an
d DL
A
. He ho
lds a l
aw degr
ee fr
om Uni
ver
sit
y of Ea
st A
ngli
a and a D
iplo
ma in
C
ompe
titi
on La
w from K
ing'
s Col
lege
. He is q
uali
ﬁe
d as a so
lici
tor in E
ngla
nd and Wa
les a
nd is an
at
torn
ey at the N
ew Y
o
rk St
ate Ba
r
. Jam
es is b
ase
d in Lo
ndon b
ut ha
s prac
tis
ed law a
nd liv
ed in th
e
US
, Sin
gap
ore an
d Hon
g Kong. J
ame
s is co
-ch
air of t
he US
-ba
sed C
ivi
l Just
ice R
efor
m Gro
up and
a dir
ecto
r of the E
uro
pea
n Gene
ral C
oun
sel A
sso
ciat
ion
.
Sally Jac
kson
SVP
, Global Communications
and C
EO Of
ﬁc
e
Sa
lly jo
ine
d the G
L
T i
n Mar
ch 201
9 as Se
nio
r Vic
e Pre
sid
ent, G
lob
al C
ommu
nic
atio
ns and C
EO
O
fﬁ
ce. S
he le
ads ou
r Com
muni
cati
ons a
nd Gove
rnm
ent Af
fa
irs f
unct
ion gl
oba
lly an
d is al
so the
CEO
’s Chie
f of Sta
ff. P
rio
r to this
, Sa
lly wa
s Seni
or Vi
ce P
resi
den
t Of
ﬁc
e of the C
EO and C
FO a
nd
sh
e prev
ious
ly se
rve
d as H
ead of I
nves
tor Re
lati
ons
. She jo
ined G
SK i
n 2001
. Sal
ly ho
lds a de
gre
e
in Natu
ral Sciences from
the
University of
Cambridge.
Ia
in Ma
ckay
Chief Financial Of
ﬁcer
Ia
in jo
ined G
SK an
d the G
L
T in 201
9. See B
oar
d bio
grap
hie
s on pag
es 83 t
o 86.
Brian McNam
ara
CEO,
GSK Consumer Healthcare
Br
ian i
s CEO, GS
K Co
nsum
er He
alt
hca
re and C
EO de
sign
ate of th
e new C
onsu
mer H
eal
thca
re
co
mpa
ny
, Ha
leon
. He jo
ined G
SK i
n 20
1
5 as H
ead of E
uro
pe and A
mer
ica
s for C
ons
umer H
ea
lthc
are
an
d has l
ed two s
ucc
es
sful J
oin
t V
entu
res
, ﬁrs
t bet
wee
n GSK a
nd Nov
ar
tis an
d, mo
re re
cent
ly, with
P
ﬁze
r
. Pre
viou
sly, he wa
s he
ad of Nov
ar
tis’ OTC di
vis
ion
. Bri
an beg
an hi
s car
eer at P&
G.
Br
ian i
s a Boa
rd mem
ber o
f the C
onsu
mer G
ood
s Foru
m and a fo
rme
r Cha
irma
n and B
oar
d memb
er
of th
e Glo
bal S
elf-
Car
e Fed
erat
ion (GS
CF
). He e
arne
d an un
derg
rad
uate de
gre
e in Ele
ctr
ica
l
En
gine
erin
g fro
m Unio
n Col
leg
e in New Y
or
k and an M
BA i
n Fina
nce f
rom th
e Uni
vers
it
y of Cin
cinn
ati.
1
On 1 A
ugus
t 2022 Ha
l Bar
ron wi
ll tr
ansi
tion f
rom h
is cur
rent r
ole to b
eco
me a No
n-E
xe
cuti
ve Dir
ecto
r and T
ony Woo
d will j
oin G
L
T as Ch
ief
Scientiﬁc Ofﬁ
cer
8
8
GS
K Ann
ual R
epor
t 2021
G
S
K L
eadership T
eam
continued
Sk
ills a
nd exp
erie
nce
Luke Miels
Chief Commercial Of
ﬁcer
Lu
ke join
ed GS
K and t
he GLT in 201
7
. As C
hief C
omm
erc
ial O
fﬁ
ce
r he is re
spo
nsib
le for o
ur
co
mmer
cia
l por
t
folio o
f med
icin
es an
d vacc
ine
s. Lu
ke als
o co-
cha
irs th
e Por
tf
olio I
nves
tmen
t Boa
rd
with Hal.
He p
revi
ousl
y wor
ked for A
str
aZ
enec
a as E
xec
uti
ve Vic
e Pre
sid
ent of t
heir E
urop
ean b
usi
nes
s and
,
pr
ior to th
at, wa
s Ex
ecu
tive V
ice P
res
iden
t of Gl
obal P
rod
uct a
nd Por
t
foli
o Strat
egy, Glo
bal M
edi
cal
Af
fai
rs an
d Co
rpor
ate Af
fai
rs
. Befo
re th
at, he wa
s he
ad of As
ia for R
och
e, ba
sed in S
han
ghai a
nd
the
n Sin
gap
ore. P
rio
r to that h
e hel
d role
s of inc
rea
sin
g seni
ori
ty at R
oche a
nd Sa
noﬁ
-Avent
is in
the U
S, E
urop
e and A
sia
.
Lu
ke hold
s a Bac
helo
r of Sc
ienc
e deg
ree i
n Bio
logy f
rom F
lind
ers U
nive
rsi
ty in A
del
aide a
nd a M
BA
from the
Macquarie University
, S
ydney
.
Shobie Ramakrishnan
Chi
ef Dig
ital a
nd T
e
chnol
ogy Of
ﬁ
cer
Sh
obie j
oine
d the G
L
T in 2021 whe
n she wa
s app
oint
ed Chi
ef Di
git
al and Tech
nolo
gy O
fﬁ
cer.
Sh
e join
ed GS
K in 201
8 and h
as de
ep and b
roa
d expe
rie
nce i
n both b
iotec
h and hi
-tech c
omp
ani
es
and, most recently
,
has led
Digital and T
echnology for GSK’s
Global Commercial organisation,
tr
ansf
orm
ing th
e comp
any’s c
apa
bili
ties i
n dig
ital
, dat
a and a
naly
ti
cs an
d playi
ng a pi
vota
l role i
n
establishing a more
agile
commercial operating
model. Before
joining GSK, Shobie held
senior
technology
leadership roles
in organisat
ions incl
uding AstraZeneca, Salesforce, Genentech
and
Ro
che. S
he is a b
oar
d memb
er of Re
med
iant a
nd on th
e adv
isor
y b
oard o
f Pis
toia A
llia
nce
.
Shobie holds a
Bachelor’
s degree
in Electronics Engineering
from V
ellore Institute of
T
echnology,
Un
iver
sit
y of M
adra
s, I
ndia
.
David
Redfern
Chief St
rategy
Of
ﬁcer
Dav
id joi
ned th
e GLT as Ch
ief St
rate
gy Of
ﬁ
cer in 2
008 a
nd is r
esp
onsi
ble fo
r cor
por
ate deve
lopm
ent
and strat
egic plan
ning. Previo
usly
, he
was Senio
r Vice President,
Northern Europe with
responsibility
for G
SK
’s phar
mac
euti
cal b
usi
nes
ses i
n that r
egio
n and
, befo
re tha
t, he wa
s Sen
ior V
ice P
res
iden
t
for C
ent
ral a
nd Ea
ste
rn Eur
ope
. He joi
ned G
SK in 1994
. Davi
d was ap
poi
nted Ch
air
man of t
he
Bo
ard of V
ii
V Hea
lthc
are L
imi
ted in 201
1 an
d a Non
-E
xec
utive D
ire
ctor o
f the As
pen P
har
mac
are
Ho
ldin
gs Li
mited B
oar
d in 201
5.
He h
as a Ba
che
lor of S
cie
nce de
gre
e from B
ris
tol Un
iver
sit
y and i
s a Cha
rte
red A
cco
unta
nt.
Regis Simard
President, Pharmaceuticals
Supply Chain
Re
gis jo
ined t
he GLT in 201
8, w
hen he b
eca
me Pr
esi
den
t, Ph
arm
aceu
tic
als S
uppl
y Cha
in.
He is responsible
for t
he manufacturing
and supply
of
GSK’s pharmaceutical products. He
also
le
ads Q
ual
ity a
nd Env
iron
ment
, He
alth
, Safe
ty an
d Sus
tai
nabi
lit
y at a cor
por
ate leve
l. Re
gis jo
ine
d
GS
K in 20
05 as a S
ite Di
rec
tor in F
ranc
e, ri
sin
g to bec
ome S
enio
r Vic
e Pre
sid
ent of G
lob
al
Pharmaceuticals Manufacturing before his
current role.
Previously
,
he held
senior positions
at
So
ny
, Koni
ca M
inol
ta an
d T
yc
o He
alth
car
e. He i
s a mem
ber of t
he Boa
rd of V
iiV H
eal
thc
are
.
He i
s a mec
hani
cal e
ngin
eer a
nd hol
ds an M
BA
.
Phil Thomson
President, Global Affairs
Ph
il joi
ned th
e GLT in 201
1
. He wa
s app
ointe
d Pre
sid
ent
, Glob
al Af
fa
irs i
n 20
1
7
, and h
as
responsibility for the
Group’
s
strategic
approach t
o stak
eholder engagement,
reputation and
policy
developmen
t. Previously
,
Phil w
as Senior
Vice President, Communications
and
Government
Affairs.
Ph
il is C
hair o
f The W
hiteh
all & I
ndu
str
y Gro
up and a B
oar
d mem
ber of t
he Ch
ina–
Bri
tai
n Bus
ines
s
Council.
He e
arn
ed hi
s degr
ee in E
ngli
sh, H
istor
y an
d Rus
sia
n Stud
ies f
rom Du
rha
m Univ
ers
ity.
Emma Walmsley
Chi
ef E
xecuti
ve Of
ﬁc
er
Em
ma joi
ned G
SK in 2010 and th
e GL
T in 201
1. See B
oar
d biog
rap
hie
s on pag
es 83 to 8
6.
Deborah Water
house
CEO,
Vii
V He
alt
hc
are
De
bor
ah was a
ppo
inted t
o the G
L
T i
n Janu
ar
y 2020. S
he be
cam
e Chi
ef E
xecu
tive O
fﬁ
cer o
f Vii
V
He
alt
hca
re in A
pril 201
7
.
De
bor
ah joi
ned G
SK in 1996 a
nd pri
or to Vi
iV wa
s the S
enio
r Vic
e Pre
sid
ent of P
rim
ar
y Car
e
wi
thin G
SK
’
s US b
usin
ess
. Sh
e has a s
tron
g trac
k rec
ord of p
er
for
manc
e in bo
th spe
cia
lt
y
an
d prim
ar
y car
e. De
bor
ah le
d the H
IV bu
sine
ss in t
he UK b
efor
e hea
ding t
he HI
V Ce
ntre o
f
E
xce
llen
ce for P
har
ma Eu
rope a
nd he
ld rol
es as G
ene
ral M
ana
ger of A
ust
rali
a and N
ew Zea
lan
d
an
d Seni
or Vi
ce Pr
esi
dent f
or Ce
ntr
al and E
as
tern E
urop
e.
Deborah is a
Non-E
xecut
ive Director
of
Schroders plc and
holds a
degree in
Economic History
and English
Litera
ture fr
om Liverpool
University
.
Ni
ck Hir
ons wa
s a mem
ber o
f the G
L
T a
nd Se
nior V
ice P
re
side
nt, G
lob
al Ethi
cs a
nd Co
mpli
anc
e unti
l 3
1 Jul
y 202
1
. Ka
ren
ann T
er
rell wa
s a me
mber o
f the
GLT and C
hie
f Digi
tal a
nd T
ech
nolo
gy O
fﬁ
cer u
ntil 8 D
ece
mber 2
02
1
.
GS
K Ann
ual R
epor
t 2021
89
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Chair
’
s Governance st
atement
Board priorities: governance and delivery
In th
e las
t three ye
ars th
ere ha
s been s
igni
ﬁca
nt chang
e
for G
SK
, in a high
ly dyn
amic op
erati
ng envir
onment
, as it
progresses tow
ards the
formation
of two
independent
co
mpani
es in the m
iddle o
f 202
2. I
n suppo
rt
ing both th
e
separation of
Consumer Healthcare (
CH) an
d creation
of ne
w
GS
K, t
here have b
een thr
ee sta
ges in ou
r oversi
ght wor
k. Th
e
ﬁr
st was to e
nsure th
at there w
as cla
rit
y bet
ween the B
oard a
nd
management on
GSK’s st
rategy
, its execution
and, theref
ore,
our key p
riori
ties
. The
n we focus
ed on ar
tic
ulatin
g our amb
itions
for a
transformed GSK
. This
was completed
for the
biopharma
bus
ines
s at the Inve
stor Up
date (IU
) in June 2021 and for t
he
CH b
usine
ss at the e
nd of Fe
brua
ry 2022. T
hes
e ambit
ions
wil
l provid
e the foun
dation f
or enha
nced p
er
forma
nce
man
ageme
nt and a hi
ghly tr
anspa
rent way to tr
ack pro
gres
s.
Th
e ﬁnal s
tage ha
s bee
n t
o ens
ure the c
ompa
n
y’s
compensation sy
stem rei
nforces the
performanc
e
cultu
re
that we a
re see
king to e
mbed a
nd only r
ewards d
eliver
y at
and b
eyond our I
U amb
itions
. The c
ompe
nsati
on system f
or
CH w
ill be de
termin
ed by its new B
oard
.
Our wo
rk ha
s also be
en foc
used on c
reati
ng the be
st plat
for
m
for ou
r CH bus
ines
s to be dem
erged to g
row sus
taina
bly ah
ead
of it
s catego
ries i
n the year
s to com
e. The m
echan
ism of
sep
arati
on of CH i
s a value
-bas
ed pro
ces
s and at al
l times t
he
Bo
ard ha
s rega
rd for wh
at is in the b
est lo
ng-term i
nteres
ts of
shareholders
.
It h
as never b
een mo
re impo
rt
ant for th
e Boar
d to oper
ate t
o
the hi
ghes
t stan
dard
s of cor
porate g
overnan
ce in su
ppor
ting
and ove
rse
eing the d
eliver
y of G
SK
’
s tran
sform
ation a
nd the
sep
arati
on of CH
. The B
oard c
ontin
ues to foc
us its wor
k on our
key pri
oriti
es and o
n tak
ing the i
mpor
tan
t deci
sions n
eces
sar
y
to pro
gres
s them
, and be he
ld acc
ounta
ble for d
oing so by o
ur
shareholders and other k
ey
stakeholders.
Thr
ougho
ut 202
1
, the Boa
rd has s
igni
ﬁca
ntly step
ped up i
ts
eng
ageme
nt with s
hare
holde
rs. D
urin
g 202
1, I held ove
r 40
mee
tings w
ith a ran
ge of inves
tors
, who ma
ke up arou
nd near
ly
40
% of the co
mpany
’
s shar
e regis
ter
. It is of p
rime i
mpor
tan
ce
for th
e Boar
d to have a clea
r under
sta
nding of t
heir vi
ews on the
company’
s
performance against ou
r strat
egy an
d the
Board’
s
ef
fect
ivene
ss in over
sigh
t of the tra
nsfor
matio
n and se
parati
on
processes
.
I share
shareholders
’ perspectives
with t
he Board,
so we c
an con
tinue to im
prove our al
ignme
nt.
In O
ctobe
r
, V
indi B
anga
, the S
ID, an
d I attend
ed a mee
ting wit
h
mem
ber
s of the Inve
stor For
um at whi
ch we sha
red pr
ogres
s in
pre
pari
ng for the c
reati
on of new GS
K as a pu
re biop
harm
a
co
mpany an
d the sep
arati
on of the C
H busin
ess
. Inc
luded i
n
this discussion
were t
he plans
and timin
gs t
o creat
e two boards
wit
h conti
nuing over
sigh
t of the bio
phar
ma and C
H busin
ess
es.
In D
ecem
ber, at our annu
al Gove
rnanc
e Mee
ting, my B
oard
co
lleag
ues and I we
re ple
ase
d to share m
ore sp
eciﬁ
cs wi
th
inves
tors ab
out our p
rior
itie
s, focu
s and over
sight
, as wel
l as the
progress made in
202
1
. The
presentation sl
ides from bot
h these
meetings are
av
ailable on
our w
ebsite
for y
our i
nformation.
Ur
s Rohne
r
, Chair o
f the Remu
nerati
on Co
mmit
tee, ha
s also
consulted
extensively on
the n
ew compensat
ion proposals for
the biopharma business. This statement
seeks to
summarise the
gover
nanc
e work und
er
taken by t
he Boa
rd and ou
r commi
ttee
s,
in wh
at was an
other exc
eptio
nally b
usy year.
Th
e Boar
d has ma
intai
ned and c
ontin
ues to bui
ld on our ES
G
leadership which beneﬁts t
he company
, shareholders and all
our stakeholders.
Current Boar
d accountability: Priorities and focus
At the s
tar
t of the ye
ar
, follow
ing its a
nnua
l evaluati
on, the B
oard
reconﬁrmed its priorities. Namely to
:
–
rem
ain obj
ecti
ve and act i
n the be
st inter
ests of t
he com
pany
and all shareholders
–
put s
usta
ined va
lue cre
ation at th
e hear
t of ou
r agend
a
–
ali
gn the Bo
ard age
nda wi
th our str
ategy, per
for
manc
e and
pipeline priorities
–
ensure managemen
t performance and succession is
assessed against del
ivery
–
use t
he IU t
arget
s to provid
e the found
ation fo
r enhan
ced
per
f
ormance management
–
ens
ure that th
e sepa
ratio
n of CH is a va
lue-b
ase
d proc
ess
Be
ing expl
icit on t
he Boa
rd’s prior
itie
s has me
ant tha
t we have
be
en able to m
ax
imise o
ur time a
nd focus at e
ach me
eting on
fur
the
r stren
gthen
ing the fu
ndam
ental
s for GS
K whic
h will
sup
por
t value c
reati
on. We have conc
entr
ated our over
sigh
t on
commercial execut
ion, cost base, capital allocation,
pipeline and
cul
ture to ens
ure deli
ver
y of the tr
ansfo
rmati
on of GS
K.
Thi
s clar
ity h
as als
o help
ed unde
rpin a
n incre
ase
d agilit
y in the
way the B
oard h
as ope
rated. Y
ou will s
ee on pa
ge 94 that th
e
Bo
ard, in c
ombi
nation w
ith the C
hair
s' Comm
itte
e, met over 3
6
tim
es in 202
1
. W
e soug
ht to improve o
ur abil
ity to re
spon
d
qui
ckly a
nd ada
pt to events as t
hey occ
ur
, whils
t cont
inuing to
del
iver our p
lans
. The Ch
airs’ C
ommi
ttee (com
prise
d of our S
ID
and Committee
Chairs
)
has been
auth
orised, where
necessar
y
,
to
engage and
take decisions
on urgen
t matters
that
arise
between sched
uled Board
meet
ings. Being
agil
e has been
impor
tant in
improving and
sustaining our competitiveness so
that
, desp
ite the ch
allen
ging envi
ronme
nt, we c
an cont
inue to
compete an
d deliver
for
patients
and shareholders.
9
0
GS
K Ann
ual R
epor
t 2021
Havi
ng set ou
r strateg
y
, the Bo
ard ch
allen
ged the p
ropos
ed
new ambitions
and targets f
or the
biopharma business which
were t
hen agr
eed an
d publis
hed at ou
r IU. Th
ese ne
w grow
th
out
looks a
nd ambi
tions s
eek to be c
lear o
n the step c
hange i
n
per
fo
rmanc
e expe
cted fr
om new GS
K from 2022. T
he Bo
ard
wil
l overse
e and ho
ld mana
gemen
t t
o acc
ount fo
r delive
ry
against t
hese public
ambition
s.
Th
e Boar
d adopted t
he sam
e proc
ess of m
ax
imisi
ng value f
or
GSK shareholders when considering t
he creation
of CH
as an
ind
epend
ent, li
sted co
mpany (H
aleo
n
). W
e have focu
sed on
ensuring th
e business is
well-positioned
to
grow
sustainably
ahe
ad of its c
atego
ries i
n the year
s to come a
nd ha
s a highly
sk
illed m
anage
ment te
am to lead i
t.
Havi
ng com
pleted th
is work
, the B
oard wa
s well-
posit
ioned to
consider the
unsolicited,
conditional and
non-bindi
ng proposals
rec
eive
d t
o acq
uire th
e CH bus
ines
s. In e
xercis
ing its ﬁ
duci
ar
y
duti
es, a
ll prop
osa
ls were c
onsid
ered b
ut reje
cted by the B
oard
as th
ey were not i
n the be
st inter
ests of s
hare
holde
rs. T
his is
because the
y fu
ndamentally
undervalued
the
business and
its
future prospects. The
Board is conﬁdent t
hat Haleon can del
iver
sus
tain
ed org
anic an
nual s
ales g
rowt
h in the ra
nge of 4-
6%
(CER) over t
he medi
um term
.
W
e carefully
considered how
best to
present our
world-leadin
g
CH b
usine
ss an
d its man
ageme
nt team to sh
areho
lder
s,
ana
lysts a
nd pro
spec
tive inves
tors at th
e CH Ca
pita
l Mar
kets
Day on 28 F
ebru
ar
y
. Man
ageme
nt conti
nues to ma
ke good
pro
gres
s towards o
ur tar
get to sep
arate the C
H busi
nes
s in
the mi
ddle of t
he year, cre
ating a pub
licly l
isted wor
ld-l
eadin
g
co
nsume
r healt
h comp
any
. The B
oard
's attenti
on has b
een
dir
ected at ove
rsee
ing the s
mooth exe
cutio
n of the de
merge
r
.
Chair's Governance statement
continued
Current Boar
d accountability
Priorities and focus
–
Rem
ain obj
ecti
ve and act i
n the be
st
inter
ests o
f comp
any and al
l
shareholders
–
Co
mmitm
ent to dri
ve sust
ained v
alue
creation
–
Board agenda
aligned
with stra
tegy
and per
f
ormance and pipeline priorities
–
Management
performance and
succession as
sessed against
delivery
–
Inve
stor Up
date and ta
rgets p
rovid
es
foundation for
enhanced per
formance
management
–
Separation of
Consumer Healthcare, to
cre
ate Hal
eon, i
s a value-
bas
ed pro
ces
s
–
Conti
nuous engagement w
ith
shareholders
Board
T
ransformation & Separation
Ma
ndate:
How to s
epar
ate to unlock a
nd ma
ximi
se lon
g-term
shareholder value
(Devo
lved into c
ommit
tee ar
chitec
ture in D
ecem
ber 2021
)
Nominat
ions & Corporate G
o
vernance
Ma
ndate:
GSK Board design and
transitio
n, and Haleon
Board
and management
team
formation
Science
Man
date:
Pipeline progress, Board strategic
collaborations, k
ey
priorities in science an
d inno
vat
ion
Corp
orate Responsibilit
y
Ma
ndate:
GS
K T
r
ust pr
iorit
y for a re
spo
nsibl
e and sus
tain
able
business
Audi
t & Risk
Ma
ndate:
Fi
nanci
al rep
or
ting, r
isk and c
ontro
ls plus p
ublic
documents del
ivering separa
tion
Remuneration
Ma
ndate:
Al
ignme
nt of GS
K remune
ratio
n to Investo
r Update
targets, Haleon'
s remun
eration polic
y and separa
tion impact
GS
K Ann
ual R
epor
t 2021
91
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Chair's Governance statement
continued
Board committee mandates
Our B
oard c
ommi
ttee
s have never be
en mor
e pivota
l in
sup
por
ting th
e Boar
d. The
ir acti
vitie
s duri
ng 202
1 are se
t out
later i
n this re
por
t, but I wo
uld like to hi
ghligh
t below th
eir key
co
ntribu
tions i
n disch
argin
g the man
dates all
ocate
d to them
dur
ing the la
st yea
r
.
T
ransformation & Separation Commit
tee
:
has de
alt wi
th the
fun
damen
tals o
f separ
ation
, not jus
t the tech
nica
l requir
ement
s,
but how
to
best release and maximise long-
term sharehold
er
valu
e. It c
onsid
ered: how we s
hould b
est se
parate t
he CH
bus
ines
s and the p
rinc
ipal val
ue to be ach
ieved fro
m each
opti
on; the cap
ital s
truc
tures r
equir
ed for the t
wo com
pani
es to
be c
ompeti
tive; how we sho
uld dis
tribu
te share
s in Ha
leon to
our shareholders, and on
which e
xchanges Haleon shou
ld list
and w
hy
. This wa
s a ver
y com
prehe
nsive p
rogra
mme of wor
k
which was supported b
y independen
t advisers. This process is
now wel
l into the exec
ution p
has
e. Give
n the rem
aining wo
rk
pla
ns are c
lear, overs
ight ha
s been d
evolved to th
e releva
nt
co
mmit
tees a
s appro
priate
. Having f
ulﬁl
led its m
andate
, the
Committee has been decommissioned.
Audi
t & Risk C
ommi
tte
e:
has in
particular been considerin
g
the ﬁnancial i
mplications
of separation,
including
the
pro
gres
sive di
vide
nd poli
cy adopte
d for 2022, and t
he
preparation of
the
demerger documents
for
shareholders to
consider before
approving
the separat
ion of
the CH busi
ness.
It h
as als
o been ove
rse
eing the e
sta
blish
ment of C
H’s ﬁnan
cial
controls.
Nominations & Corporate
Gover
nance Committee:
has been
over
seei
ng key Boar
d appo
intmen
ts for the tr
ansi
tion of th
e
co
mpany to a pur
e bioph
arma b
usine
ss
. This i
nclud
ed
suc
ces
sion p
lanni
ng esp
ecia
lly for th
e CSO, th
e subse
quent
app
ointm
ent of Dr T
ony Wood as o
ur CSO D
esi
gnate, an
d the
app
ointm
ent of Dr A
nne Be
al and D
r Hal D
iet
z to the Boa
rd as
independent Non-E
xecutive Directors.
Th
e Boar
d asked t
he Com
mit
tee to take the o
ppor
tuni
ty to
re-evaluat
e and
det
ermine the
optimal
biopharma Board
composition, incl
uding
skills, diversity
, capabil
ities and
exp
erie
nce. O
n sepa
ratio
n from the m
iddle o
f this yea
r
, it is
exp
ected th
at two of th
e memb
ers fr
om the cu
rrent G
SK Bo
ard
wil
l join the H
ale
on Boa
rd. Th
is will e
nsure th
at the new H
aleo
n
Bo
ard wil
l have conti
nuit
y of the his
tor
y
, know
ledge a
nd
exp
erie
nces o
f this Bo
ard as t
he Hal
eon Bo
ard es
tabl
ishe
s
its
elf in i
ts ear
ly year
s.
Th
e Comm
itte
e reco
mmend
ed the ap
point
ment of Si
r Dave
Lew
is as H
aleon C
hair D
esig
nate in De
cemb
er
, afte
r an
ex
tensi
ve sear
ch pro
ces
s. Thi
s followe
d the app
ointm
ent of
Br
ian M
cNam
ara a
s Hale
on CEO De
sign
ate in July. Sir D
ave
is now r
espo
nsibl
e for buil
ding hi
s full Ha
leon B
oard
. Mr
Mc
Nam
ara wa
s plea
sed to int
roduc
e his ma
nagem
ent team to
inves
tors at th
e CH Ca
pita
l Mar
kets Day on 28 Fe
brua
ry 2022
.
Science C
ommittee:
continued its focus
on our pipeline
progress strateg
ic collaborations
and the
ke
y priorities i
n
science and innovat
ion.
Corporate Responsibil
ity Commit
tee:
focu
sed it
s oversi
ght
on key a
spec
ts of our T
rus
t prior
itie
s. Th
e main ar
eas o
f focus
were o
ur safe
ty cul
ture, in
clusi
on and di
vers
ity, our ch
arit
able
giv
ing and c
ommun
ity i
nvolveme
nt and ES
G per
form
ance fo
r
new GS
K and th
e develop
ment of t
he ESG fr
amewor
k for the
independent CH compan
y
,
Haleon.
Remuneration Committee:
has revisit
ed our
remuneration
pol
icy to focu
s on rein
forci
ng a funda
ment
al cha
nge in our
per
fo
rmanc
e cultu
re and to su
ppor
t the de
liver
y of ou
r IU
ambitions and ESG
priorities for the
biopharma company
.
The
Co
mmit
tee Cha
ir and I h
a
ve con
sulted ex
ten
sively w
ith our
sha
reho
lder
s on this p
olicy an
d it will b
e subj
ect to a bin
ding
vote at thi
s year’s AGM
.
Fur
the
r detai
ls of the B
oard a
nd its co
mmit
tees’ wor
k durin
g
202
1 are s
et out in t
he follow
ing pag
es.
I loo
k for
ward to co
nnec
ting wi
th you at our A
nnual G
ener
al
Me
eting th
is year i
n May and u
pdatin
g you at that tim
e on the
transformation
of GSK and
progress on the
CH demerger
.
Th
ank you for you
r conti
nued su
ppor
t.
Sir Jonathan Symonds
Chair
28 Feb
ruar
y 2022
92
GS
K Ann
ual R
epor
t 2021
Independent ov
ersight and r
igorous challenge
Non
-E
x
ecut
iv
e Direc
tors
–
provide a
strong in
dependent element
to
the Board
–
constructively support and challen
ge management
and
scrutinise their performance in meeting
agreed
deliverables
–
shape proposals
on st
rateg
y and
offer specialist
advice
to
management
–
ea
ch has a l
ette
r of app
ointm
ent set
ting o
ut the te
rms
and conditions of their
directorship
–
devo
te such ti
me as is n
ece
ssa
ry to t
he prop
er
per
formance o
f their
duties
–
ar
e expe
cted to at
tend al
l meeti
ngs as r
equi
red
Independence statement
Th
e Boar
d cons
ider
s all of i
ts No
n-E
xecu
tive D
irec
tors
wh
o are id
entiﬁ
ed on p
ages 8
4 to 86 to be in
depe
nden
t
af
ter be
ing as
ses
sed ag
ains
t Prov
isio
n 1
0 o
f the Fi
nanci
al
Repor
ting
Council's (FRC
) UK Corporate Governance
Co
de (Cod
e
). The re
view of th
e cont
inuin
g indep
ende
nce
and c
ommi
tmen
t of L
ynn E
lsen
hans
, who h
as ser
ve
d
on th
e Boar
d for mo
re than n
ine yea
rs, i
s des
crib
ed on
pag
e 1
07
. The in
depe
nden
ce and c
ommi
tment o
f Vind
i
Ba
nga
, Dame V
ivi
enne C
ox, D
r Jes
se Go
odma
n and Ur
s
Roh
ner, who wi
ll have ser
ve
d on the Bo
ard fo
r over six
yea
rs dur
ing th
e cour
se of 2022, h
as be
en subj
ecte
d to
a rigorous re
view
.
The NE
D's role description is available on gsk.com
Senior Independent Director
Vindi B
anga
–
ac
ts as a so
undin
g boar
d for the C
hair a
nd a tru
sted
intermediary for other
Directors
–
together
with the
Non-E
x
ecutive
Directors, leads the
ann
ual rev
iew of th
e Chai
r’s per
for
manc
e, ta
king i
nto
ac
count v
iews of t
he Ex
ecuti
ve Dir
ector
s
–
dis
cus
ses th
e res
ults of th
e Chai
r’s ef
fecti
vene
ss rev
iew
wi
th the Ch
air
–
le
ads the s
ear
ch and a
ppoi
ntmen
t proc
ess a
nd make
s
the r
ecom
mend
ation to t
he Boa
rd for a new C
hai
r
–
ac
ts as an a
dditi
onal p
oint of c
ont
act for s
hare
hold
ers
,
mai
ntai
ns an un
ders
tand
ing of th
e iss
ues an
d conc
erns
of major
shareholders through
brieﬁngs from
the
Company Secretary and Invest
or Rela
tions.
The Senior Independent Non-Executive Director’
s role description is
available on gsk.com
Leadership
Chair
Jonathan Symonds
–
le
ads an
d manag
es the b
usin
ess o
f the Boa
rd
–
provides direction
and focus
–
en
sure
s clea
r stru
cture f
or ef
fect
ive ope
ratio
n of the
Board and
its committees
–
maintains a dialogue
with shareholders about the
gove
rnan
ce of the c
omp
any
–
se
ts the Bo
ard ag
enda a
nd ens
ures s
uf
ﬁcie
nt time i
s
all
ocate
d to prom
ote ef
fecti
ve deb
ate to supp
ort s
ound
decision making
–
ensures the Board
receives accurat
e, timely
and clear
information
–
meets continuo
usly with
each Non-Executive Director
to
discuss individual cont
ributions and
performance,
together
with t
raining and
dev
elopment needs
–
sh
ares p
eer fe
edba
ck that i
s provi
ded a
s par
t of the
Board ev
aluation
process
–
me
ets reg
ular
ly wit
h all the N
on-
Exe
cuti
ve Dir
ector
s
independently of
the Executive Directors
The Chair’
s role description is available on gsk.com
Ch
ief E
xecu
tive O
f
ﬁce
r
Emm
a W
almsley
–
re
spon
sibl
e for the m
anage
ment o
f the Gr
oup and i
ts
three businesses
–
deve
lops t
he Gro
up’
s str
ategic d
irec
tion fo
r
consideration and
approval
by
the Board
–
implements the
agreed st
rategy
–
is s
uppo
rted b
y memb
ers of t
he GL
T
–
ma
inta
ins a co
ntinua
l and ac
tive di
alog
ue with
shareholders in respect of
the
company’
s performance
The Chief Executive Ofﬁcer’
s role description is available on gsk.com
Company Secretar
y
Vic
toria Whyte
–
se
cret
ar
y to the Bo
ard an
d all Bo
ard co
mmit
tee
s
–
su
ppor
ts th
e Boar
d and C
ommi
ttee C
hair
s in ann
ual ag
enda p
lanni
ng
–
ensures informat
ion is
made a
vailable t
o Board
members in a
timely
fashion
–
suppor
ts
the Chair
in designing and
delivering Board in
ductions
–
coordinates continuin
g business aw
areness and training requirements
for t
he Non-E
x
ecutive Directors
–
und
er
take
s inter
nal Bo
ard an
d comm
itte
e evalua
tions a
t the req
uest o
f the Ch
air
–
ad
vise
s the Di
recto
rs on B
oard p
rac
tice a
nd proc
edu
res
, and co
rpor
ate gover
nanc
e mat
ters
–
chairs the Group
’
s Disclosure Committee
–
operates
a Board-appro
ved
appointmen
ts polic
y tha
t reﬂects
the Board
and e
xternal appointm
ent
requirements
of the
current Code
–
is a p
oint of c
onta
ct for sh
areh
olde
rs on a
ll cor
pora
te govern
ance m
atte
rs
Boar
d r
oles and r
esp
onsibilities
GS
K Ann
ual R
epor
t 2021
93
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Ea
ch Boa
rd com
mit
tee has w
rit
ten terms o
f refer
ence w
hich have b
een ap
proved by th
e Boar
d and are r
eviewed at l
eas
t annua
lly to
ens
ure that th
ey comp
ly with t
he lates
t lega
l and reg
ulator
y req
uirem
ents an
d reﬂe
ct bes
t prac
tice d
evelopm
ents
. The cur
rent f
ull
terms of
reference
of each Board
committee are a
vailable
on gsk.com. The number
of committee
meetings
held and
committee
members' a
ttendance
are described on
page
94.
Det
ails of c
ommi
ttee m
ember
s’ ski
lls and ex
peri
ence a
re inc
luded i
n their bi
ogra
phie
s under ‘
The B
oard’ o
n page
s 83 to 86. I
n
acc
orda
nce w
ith the F
RC's C
ode, t
he Boa
rd has d
etermi
ned that C
harl
es Ba
ncrof
t ha
s rece
nt and re
levant ﬁn
anci
al expe
rien
ce. It
ha
s also ag
reed th
at he ha
s the app
ropri
ate quali
ﬁc
ations a
nd backgr
ound to be a
n audit c
ommi
ttee ﬁ
nanci
al expe
rt a
s deﬁ
ned by
the S
arba
nes-
Ox
ley Act of 20
02, and h
as dete
rmine
d that he is i
ndep
endent w
ithin t
he mea
ning of th
e Secur
itie
s Exc
hange A
ct of
1
934, as amended.
Board committee
Role
Membership comprises
Board committee
report on page
Science
Supports the Board in its underst
anding of the key strategic
themes, upon which the company’
s R&D strategy is based,
and of any external transactions, by performing in-depth
reviews of the underlying scientiﬁc assumptions to give the
Board technical assurance. It also undertakes more in-depth
risk oversight of R&D-related risks
Dr Jesse Goodman (Chair)
Dr Hal Dietz (from January 2022)
Dr Laurie Glimcher
Charles Bancroft (from May 2021 to
February 2022)
Judy Lewent (until May 2021)
1
05-1
06
Corporate Resp
onsibility
Considers GSK’
s T
rust priority and oversight of progress
against the associated T
rust commitments which reﬂect the
most important issues for responsible and sust
ainable
business growth. It has oversight of the views and interests of
our internal and external stakeholders and reviews issues that
have the potential for serious impact upon GS
K’
s business
and reputation
L
ynn Elsenhans (Chair)
Dr Anne Beal (from May 2021)
Dame V
ivienne Cox
Dr Jesse Goodman
1
04-1
05
T
ransformation
& Separation
(Devolved into the committee
architecture and disbanded
in December 2021)
Advises and assists the Board on the transformation and
separation of the company and oversees the associated risks
in separating the Group into Biopharma and Consumer
Healthcare companies
Sir Jonathan Symonds (Chair)
Charles Bancroft
V
indi Banga
Dame V
ivienne Cox
L
ynn Elsenhans
Urs Rohner
Judy Lewent (until May 2021)
1
10
Nominations &
Corporate Governance
Reviews the structure, size and composition of the Board,
the appointment of members to Board committees and
the appointment of Corporate Ofﬁcers and makes
recommendations to the Board as appropriate. It plans and
assesses orderly succession for Executive and Non-Executive
directors and reviews management's Succession Plan to
ensure its adequacy
Is responsible for reporting to the Board, overseeing and
monitoring corporate governance arrangements and for
making recommendations to the Board to ensure the
company’
s standards and arrangements are consistent with
existing corporate governance standards and emerging best
practice. It also reviews the company’
s conﬂicts of interest
Sir Jonathan Symonds (Chair)
Charles Bancroft (from May 2021)
V
indi Banga
L
ynn Elsenhans
Urs Rohner
Judy Lewent (until May 2021)
10
7
-
1
10
Audit & Risk
Reviews the ﬁnancial reporting process, the integrity of the
company’
s ﬁnancial statements, the external and internal audit
process, the system of internal control and the identiﬁcation
and management of risks, and the company’
s process for
monitoring compliance with laws, regulations and ethical
codes of practice
Initiates audit tenders, the selection and appointment of the
external auditor
, setting their remuneration and exercising
oversight of their work
Charles Bancroft (Chair from March 2021)
V
indi Banga
Dr Anne Beal (from July 2021)
L
ynn Elsenhans
Dr Laurie Glimcher
Judy Lewent (Chair until March 2021 and
member until May 2021)
111-115
Remuneration
Sets the company’
s remuneration policy having regard to
GS
K’
s workforce remuneration so that G
SK is able to recruit,
retain and motivate its executives
The Remuneration policy is regularly reviewed to ensure
that it is consistent with the company’
s scale and scope of
operations, supports the business strategy and growth plans,
is aligned to the wider workforce and helps drive the creation
of shareholder value
(The Chair and the CEO are responsible for evaluating and
making recommendations to the Board on the remuneration
of Non-Executive Directors)
Urs Rohner (Chair)
V
indi Banga
Dame V
ivienne Cox
119-152
Boar
d committee information
The Board has established the follo
wing committees:
94
GS
K Ann
ual R
epor
t 2021
Boar
d ar
c
hitectur
e
Th
e corp
orate gove
rnanc
e fra
mework is d
esig
ned to imp
rove the ef
fec
tivene
ss of th
e Boar
d and to sup
por
t the GS
K Lea
ders
hip
T
e
am (GL
T). I
t conti
nues to evol
ve to suppo
rt th
e delive
ry o
f our str
ategy and p
rior
itie
s. Th
e align
ment of ou
r Boar
d archi
tectur
e with
the Board’
s
agenda t
o support the d
emerger is il
lustrat
ed on pa
ge 90.
GS
K’s inter
nal co
ntrol an
d risk m
anage
ment ar
rang
ement
s, de
scrib
ed on pa
ges 1
1
2 an
d 46 to 54, ar
e an integ
ral pa
rt of o
ur
corporate gov
ernance framework.
See page 93 for more about the roles and membership of each Board committee.
Board
T
r
ansformatio
n
&
Separation Commit
tee
*
Read more on page 11
0
Chief
Executi
v
e
Of
ﬁcer
GSK
Leadership
Te
a
m
Attendance at scheduled Boar
d and committee meetings during 2021
Board
Nominations
&
Corporate
Governance
Audit & Risk
Remuneration
Science
Corporate
Responsibility
T
ransformation
& Separation*
T
otal number of scheduled
meetings
6
6
6
6
3
4
3
Members
Attended
Attended
Attended
Attended
Attended
Attended
Attended
Sir Jonathan Symonds
6
6
3
Emma W
almsley
6
Iain Mackay
6
Dr Hal Barron
6
Charles Bancroft
6
3 (3)
6
2 (2)
3
V
indi Banga
6
6
6
6
3
Dr Anne Beal
3 (3)
2 (2)
3 (3)
Dame V
ivienne Cox
6
6
4
3
L
ynn Elsenhans
6
6
6
4
3
Dr Laurie Glimcher
6
6
3
Dr Jesse Goodman
6
3
4
Urs Rohner
6
6
6
3
Judy Lewent
3 (3)
3 (3)
3 (3)
3 (3)
1 (1)
2 (2)
Number of ad-hoc meetings
15
7
4
7
6
1
Fo
r Cha
rle
s Banc
rof
t, D
r Ann
e Bea
l and Ju
dy Le
went
, the num
ber
s in br
acke
ts den
ote the n
umbe
r of me
eting
s whi
ch the
se in
divi
dua
ls wer
e elig
ible t
o
at
tend
. Dr Be
al jo
ined t
he Bo
ard an
d the C
orp
orat
e Resp
ons
ibil
ity C
omm
it
tee on 6 M
ay 2021 and th
e Audi
t & Ris
k Co
mmit
tee o
n 23 July 2
02
1
. Cha
rle
s
Ba
ncro
ft j
oine
d the S
cien
ce an
d Nom
inati
ons & C
orp
orat
e Gover
nan
ce co
mmit
tee
s on 6 M
ay 202
1
. Ju
dy Lewe
nt ret
ire
d from t
he Bo
ard fo
llow
ing th
e
AGM o
n 5 May 2021.
In a
ddit
ion to t
he ad-
hoc me
etin
gs in
clud
ed in th
e tab
le ab
ove, th
e Chai
rs' C
omm
itte
e, th
at was e
sta
blis
hed at t
he en
d of 2020, m
et on 15 occ
asi
ons to
consider various
items
of
business during
20
2
1
.
* Th
e T
r
ans
for
matio
n & Sep
ara
tion C
omm
itt
ee was d
evolv
ed into t
he co
mmit
tee a
rchi
tect
ure an
d dis
band
ed in D
ece
mber 2
02
1
Science C
ommittee
Read more on page 1
05
Corp
orate Responsibilit
y
Commit
tee
Read more on page 1
04
Remuneration Committee
Read more on page 119
Nominations & Corporate
Governance Commit
tee
Read more on page 1
07
Audi
t & Risk C
ommi
tte
e
Read more on page 111
Th
e Boa
rd is pl
ea
sed to r
epor
t th
at in 2021 it wa
s in fu
ll com
pli
ance w
ith t
he prov
isi
ons of t
he FR
C's C
ode
, with t
he exc
epti
on of C
ode p
rovi
sion 3
8. T
his
re
quir
es al
ignm
ent of p
ensi
on ra
tes for e
xecu
tive di
rec
tors w
ith th
ose av
aila
ble to t
he loc
al wo
rkf
orc
e. Fro
m 1 Jan
uar
y 2023 an
y curr
ent E
xec
utiv
e Dire
ctor
s
st
ill in r
ole wi
ll have th
eir p
ensi
on ra
tes ali
gne
d to the wi
der wo
rk
forc
e loc
al to th
em. T
his w
ill th
en rep
lic
ate the p
ensi
on ar
ran
geme
nts fo
r any new E
xe
cuti
ve
Di
rec
tors a
ppoi
nted to G
SK
. Th
is tra
nsi
tion w
as set o
ut in th
e 201
9 a
nd 2020 A
nnu
al Rep
or
ts. I
n add
itio
n, pr
ovis
ion 3
8 requ
ire
s that on
ly ba
se sa
lar
y sh
ould
be p
ensi
ona
ble; how
ever, US pe
nsio
n arr
ang
emen
ts for e
mplo
yees a
llow b
asi
c sal
ar
y and b
onus to b
e pen
sion
abl
e. Fol
lowi
ng Dr B
arr
on’s tra
nsit
ion to a
No
n-E
xe
cuti
ve Dir
ecto
r with e
ff
ect f
rom 1 Au
gust 2
022 this r
equi
rem
ent wi
ll be me
t.
Th
e Boa
rd is a
lso pl
eas
ed to re
por
t th
at it ha
s con
sist
entl
y appl
ied th
e pri
ncip
les o
f the FR
C's C
od
e as se
t out in t
he pag
es of th
is an
d the Re
mune
rati
on
re
por
ts
. A copy o
f the C
ode is av
aila
ble o
n the FR
C’s web
site
, ww
w.fr
c.o
rg.u
k.
GS
K Ann
ual R
epor
t 2021
95
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Areas of focus in 2021
Further
strengthening
GSK
’
s
fundamentals
The Boar
d’
s oversight of the fundamentals of the commercial execution, cost base, capital alloc
ation, pipeline and culture
included:
–
receiving regular progress updates and providing input into the company’
s V
accines mRNA strategy plan
–
receiving and discussing commercial strategy performance reports from Pharmaceuticals, V
accines and ViiV Healthcare businesses
–
reviewing and approving the objectives and ambitions for the company and patients that were announced at the Investor Update in
June
–
approving GSK's progressive new dividend policy
–
approving the Board’
s 2021-23 priorities
–
approving business development transactions and strategic partnerships with third parties, including V
ir Biotechnology
, CureV
ac, iT
eos
and Alector
–
receiving updates on R&D strategy
, progress and the company's pipeline
–
receiving quarterly reports from the CEO, C
FO and CSO
–
scrutinising the Group’
s ﬁnancial performance
–
setting the company’
s new purpose and simpliﬁed culture
–
oversight of projects and collaborations with third parties, to develop vaccines and treatments for COVID-19
–
reviewing the risks and impacts of COVID-19 on the Group’
s business and performance
–
approving the terms of the global settlement and licensing agreement with Gilead
Separation
of Consumer
Healthcare
The Boar
d’
s preparation for the demer
ger as a value-based pr
ocess included:
–
regularly discussing and scrutinising transformation plans for Consumer Healthcare business
–
receiving and discussing commercial strategy performance reports from Consumer Healthcare business
–
discussing plans for Consumer Healthcare up to and beyond separation as Haleon at the annual Board and G
L
T strategy day
–
approving the appointment of the Haleon Chair and CEO designates and planning for the Haleon B
oard composition
–
reviewing and rejecting unsolicited proposals for the Consumer Healthcare business
New G
SK
The Boar
d’
s oversight of the creation of GS
K as a pure biopharma business and delivering a step c
hange in performance
included:
–
regularly discussing and scrutinising transformation plans for new GSK
–
discussing plans for the company up to and beyond separation as new GSK a pure biopharma company at the annual B
oard and GL
T
strategy day
–
reviewing and approving the objectives and ambitions for the company and patients that were announced at the Investor Update
–
receiving updates on R&D strategy
, progress and the company's pipeline
–
succession planning for the new GSK B
oard, including approval of the appointments of a new Non-Executive Director and Corporate
Responsibility Committee Chair successor and a new Non-Executive Director and designated Scientiﬁc & Medical Expert
Maintaining
E
SG leadership
The Boar
d’
s oversight of T
rust and the E
SG agenda included:
–
approving the T
rust section of the Annual Report
–
approving the T
ask Force on Climate-related Financial Disclosures in the Annual Report
–
delegating speciﬁc responsibility to the Corporate Responsibility Committee for oversight of Human Rights in the company’
s operations
Regular
governance
oversight
The Boar
d’
s focus on a routine pr
ogramme of good governance activities included:
–
reviewing the quarterly ﬁnancial results, dividend proposal, earnings guidance, investor materials and results announcements and
receiving reports from the external auditor
–
approving the Annual Report and F
orm 20-F
–
setting the annual budget and plan, and the forward-looking three-year forecast
–
conducting an annual review of the Board’
s enterprise risk responsibility framework and enterprise-wide risks
–
considering observations and agreeing actions from the Board’
s external evaluation
–
reviewing and continuing to evolve the Board’
s governance arc
hitecture
–
evaluating the CEO’
s 2020 performance, and setting her 2021 objectives
–
reviewing the annual talent and succession plan
–
receiving reports from Board committees and the W
orkforce Engagement Director
–
discussing the employee
PUL
SE
survey results
–
receiving reports on corporate governance and regulatory developments and the Company Secretary’
s report
–
approving the company's modern slavery statement and gender pay gap positioning
–
reviewing stakeholder perception research
The Board discharges its responsibilities through an annual programme of meetings. Papers and presentations are given to the Board
(and its committees) to focus its oversight of strengthening the fundamental elements of the business and its growth-based performance
ambitions, the transformation and separation of GS
K to create two world-leading companies and our ES
G leadership priorities in pursuit
of the company’
s strategy.
This information helps the Board facilitate effective decision making and input, or aid the B
oard’
s oversight and awareness of business
performance or routine good governance practices operated by the company
. Further details of a selection of principal decisions t
aken
by the Board (and its committees) and how the interests of relevant st
akeholders were taken into account in arriving at their decisions are
set out on pages 96 to 9
8.
Items of business considered critical to GS
K’
s long-term success through the achievement of the key priorities are highlighted below
.
Boar
d activity
96
GS
K Ann
ual R
epor
t 2021
Th
e Boar
d and its c
ommi
ttee
s have been h
ighly fo
cuse
d on thei
r key prior
itie
s and ens
uring G
SK
's funda
ment
als co
ntinue to be
enhanced.
Board members’ decision
making on t
hese signiﬁcant matters incl
uded the
consideration of
the
interests
of GSK’s
ke
y stakeholders
and h
ow deci
sions c
ould po
tential
ly af
fect th
em. Th
e pape
rs co
nside
red by the B
oard a
nd its c
ommit
tees s
ought to hi
ghlig
ht the
rel
evant st
akehol
der imp
acts of a
nd per
spe
ctive on t
hese m
atter
s – wheth
er pos
itive or n
egative
.
Sel
ected ex
ampl
es of so
me of the pr
incip
al dec
isio
ns taken by t
he Boa
rd in 202
1
, and how th
e Boar
d cons
ider
ed releva
nt
stakehold
ers’
perspectives
are described
below
:
Progr
ess area
Principal decision
How Boar
d/Committee regar
ded stakeholder interests
Stakeholder groups, and other
section 1
72 duties considered
Commercial
execution
China:
The Audit & Risk Committee
recommended incremental changes
to the commercial model in China to
the Board for approval
Further details are available on
page 111
The Committee review
ed GSK China
’
s implementa
tion
of the
healthcare professionals (HCP)
speaker
en
gage
ment
s and s
ale
s forc
e inc
enti
ve (SF
I) pol
icy
changes to
date.
It not
ed tangible
improvemen
ts
obser
v
ed in
our people
and cust
omer engagement
In this
context, the Committee considered
further
incremental changes
to
our
HCP engagement
and SFI
pr
ogra
mme i
n Chin
a. T
his in
clu
ded a pl
an for a
n
increase in t
he number
of
city-level
Healthcare
Organisations (
HCOs)
to
increase our
reach. Fu
rther
improvement
of HCP co
verage across
the country
enables our innovat
ive Specialty Care products to
ultimat
ely reach
more pa
tients. T
o continue
to
safeguard k
ey
stakeholder
interests
including
patients,
the C
om
mit
tee rev
iewe
d a ris
k ass
ess
men
t, the
training approach
and the
proposed implementat
ion
of c
ontr
ols ove
r the new p
oten
tial H
CO
s befo
re
recommending this
change
Stakeholders:
HC
Ps and medical experts,
employees, investors,
governments and regulators,
patients and consumers
Other s1
72 duties:
Long-term results, our workforce,
business relationships and
reputation
Cost base
T
ransformation programme:
The Board concluded
its
oversight
of the
savings
made from
the
transformation programme
to
achiev
e a
cost base
competitiv
e
with its
peers
The Board agreed to the acceleration of this
programme to generate additional savings that could be
invested in the R&D pipeline for the potential beneﬁt of
patients and to deliver shareholder returns
Stakeholders:
Investors, patients and
employees
Other s1
72 duties:
Long-term business
performance, our workforce and
our business relationships
Capital alloc
ation
Dividend p
olicy c
hange:
The Board reviewed and approved
the implementation of a new
progressive dividend policy for
implementation from 2022
Further details are available on
page 111
The Board, with support from the Audit & Risk
Committee, carefully considered this matter before
concluding to move to a progressive dividend policy from
2022. In consideration of its duties, the Directors
examined the import
ance of predictable returns,
particularly in uncertain times
As part of its deliberations, the Board carefully balanced
the impact of and trade-offs between reducing the
dividend against the importance of setting up new G
SK
with the right capital structure and the resources to
invest, grow and improve shareholder returns over the
longer term
Ultimately
, the Board determined that setting a
progressive dividend policy in this way would support the
investment needed to deliver growth, unlock further
shareholder value and develop an even stronger pipeline
of innovative products capable of transforming the lives
of our patients
Stakeholders:
Investors, patients and our
people
Other s1
72 duties:
Our long-term results, workforce
and business relationships and
reputation and fairness between
our shareholders
Pipeline
Business development,
collaborations
and deals:
The Science Committee considered
the scientiﬁc merits of these
opportunities prior to the Board’
s
review and approval
Further details are available on
page 1
06
The Science
Committee and
Board re
viewed
man
y
business development
opportunities during
the y
ear
.
Th
ose l
eadi
ng to co
nclu
ded t
rans
act
ions i
nclu
ded:
–
A
collaboratio
n with
iT
eos Therapeutics to
enable
next generation immune-oncology
combinations
–
Expansion of
the
collaboration wit
h Vir
Biotechnolo
gy t
o adv
ance ne
w therapeu
tics for
in
ﬂuen
za an
d othe
r res
pir
ator
y vir
use
s and
–
Collaboration wit
h Alector
to
co-develop anti-
bodies for
neurodeg
enerative
diseases
These deals were
considered in t
he cont
ext of their
potent
ial t
o hel
p GSK del
iver
transformat
ional
medicines t
o pat
ients
Stakeholders:
Patients, employees and
investors
Other s1
72 duties:
Our long-term results, workforce
and business relationships
Boar
d pr
ogr
ess in 2021
GS
K Ann
ual R
epor
t 2021
97
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Board pr
ogr
ess in 2021
continued
Progr
ess area
Principal decision
How Boar
d/Committee regar
ded stakeholder interests
Stakeholder groups, and other section
1
72 duties considered
New growth
ambitions
Investor Update:
The Board approv
ed the
June In
vestor
Update
(IU)
objectives
and am
bitions
with a
focus on
GSK's growth outlook
and for
maximising shareholder value
creation in
cluding
:
–
competitiv
e growth and
margin
outlook
–
competit
ive su
stainable retu
rns and
value crea
tion and
–
ne
w ambitions
for shareholders
and
society
Further details are available on page 111
The Board drew on comprehensive investor feedback
and other key stakeholder research and outreach to
help inform and shape the agreed ambitions shared at
the I
U event for new GSK, our patients and
shareholders, and impacting the health of more than
2.5 billion people over the next ten years. The Audit &
Risk Committee also reviewed the proposals
The details of how stakeholder interests were then
taken into account by the Remuneration Committee
when incorporating key I
U ambitions into the updated
2022 Remuneration policy for GS
K
are described in the ‘Remuneration policy review’
principal decision below
Stakeholders:
Patients and consumers, our people
and investors, governments and
regulators, non-governmental
organisations and multilateral
organisations
Other s1
72 duties:
Long-term business performance,
our workforce, business
relationships, the community and
our environment, our reputation and
fairness between our shareholders
Separation of
Consumer
Healthcare
Reject
ion
of unsolicited proposals
for C
H bus
ines
s:
–
The B
oar
d had en
sure
d that t
he CH
business was w
ell-positioned
to
sustainably gro
w ahead
of its
ca
tegor
ies i
n the ye
ars t
o come a
nd
had a highly
skilled management
tea
m to lea
d it
–
It wa
s con
ﬁde
nt that t
he CH
business could
sustainably deliv
er
or
gani
c sal
es gr
owt
h in the r
ang
e of
4-
6% (CE
R) over th
e med
ium ter
m
Having complet
ed this
foundat
ional work, the
Board
was wel
l-positioned t
o consider
the
unsolicited,
conditional and
non-binding proposals
received to
ac
quir
e the C
H busi
nes
s
Th
e prop
os
als we
re rej
ecte
d as th
ey were n
ot in th
e
best interests
of shareholders since
they
fundamentally under
valued t
he business and its
future
prospects
Stakeholders:
Patients and consumers, our people,
investors, governments and
regulators, non-governmental
organisations and multilateral
organisations
Other s1
72 duties:
Long-term business performance,
our workforce, our business
relationships, the community and our
environment, our reputation and
fairness between our shareholders
Demerger of CH:
The Board approv
ed:
–
the re
tenti
on of a st
ake in t
he
Consumer Healthcare company
,
Haleon, post demerger
–
Haleon
's
opening
capital st
ructure
and
–
the se
par
atio
n of CH to c
reate
Haleon by
mid-
20
22
Further details are available on page 11
0
The Board, supported by
the
T
ransformat
ion &
Separation Committee,
considered the
best wa
y t
o
release maximum shareholder value, and
for
the two
co
mpa
nies b
e set o
n ﬁrm fo
und
ation
s to be ab
le to
most effectively serve their
patients
and cust
omers
respectively
This included t
he most
appropriate
capital
st
ruct
ure
s requ
ired f
or the t
wo co
mpa
nie
s to be
co
mpet
itiv
e, how to d
istr
ibu
te shar
es in H
ale
on to
GSK’s shareholders, whether t
o re
tain a stak
e
in Haleon,
and on
which
exchan
ges Haleon
should
lis
t and w
hy
Stakeholders:
Patients and consumers, our people
and investors, governments and
regulators, non-governmental
organisations and multilateral
organisations
Other s1
72 duties:
Long-term business performance,
our workforce, our business
relationships, the community and our
environment, our reputation, and
fairness between our shareholders
Remuneration
Remuneration p
olicy r
eview:
The Remuneration Committee approved
a new 2022 Remuneration policy and
measures for the biopharma company
,
which is subject to a binding
shareholder vote at our
2022 Annual General Meeting.
It incorporates new long- and
short-term incentives including:
–
Sales and
adjusted
operating
proﬁt
gr
owt
h mea
sure
s ali
gned t
o the I
U
ambitions and
–
ESG
measures reﬂecting
the
company’
s
work
in th
is regard
Pr
ior to d
evelo
ping t
he new 20
22 Remu
ner
ation
po
licy (the n
ew pol
icy), on be
hal
f of the
Remuneration Commit
t
ee, the Remuneration
Committee Chair and t
he Chair:
–
cons
ide
red i
nvesto
r fee
dbac
k on the k
ey
am
biti
ons se
t out at t
he IU ev
ent an
d eng
aged
wi
th its m
ajor i
nves
tors
, and p
rox
y adv
ise
rs on th
e
proposed changes
–
consult
ed with
the Corporate
Responsibility
Committee on GSK’s
ESG commitments
and
T
rust
priorities
–
liste
ned to t
he vie
ws of an E
SG exp
er
t, ou
tlin
ed in
the ‘ESG
leadership’
principal d
ecisions below
,
concerning views
of stakeholders
on the
linkage
of ESG t
o remuneration incentives and
–
met wi
th the C
hie
f Peop
le Of
ﬁ
cer a
nd the H
R
le
ads fo
r eac
h are
a of the bu
sin
ess to h
ear t
heir
views on
remunerat
ion arrangements
at
GSK and
wider workforce pay
alignment
opportunities for
new G
SK
They also consulted with investors and pro
xy advisers
on the new policy proposals. Following engagement,
the Committee then carefully considered the feedback
before ﬁnalising the design of the new policy
Further details are available on pages 143 to 152
Stakeholders:
Our people, investors, patients and
consumers, governments and
regulators and proxy advisers
Other s1
72 duties:
Long-term results, our workforce the
community and our environment and
our reputation
98
GS
K Ann
ual R
epor
t 2021
Board pr
ogr
ess in 2021
continued
Progr
ess area
Principal decision
How Boar
d/Committee regar
ded stakeholder interests
Stakeholder groups, and other section
1
72 duties considered
E
SG leadership
Leading E
SG expert view and
insights on G
SK:
Following a wide-ranging and
comprehensive brieﬁng and
debate
with a
recognised ESG
expert,
the Corporate
Responsibility
Committee agreed a
programme
of ac
tio
ns to fur
th
er imp
rove ou
r
ESG communications and IR
engagement b
y:
–
pro
viding
further evidence,
met
ric
s and d
ata to in
vesto
rs of
how t
he company’
s
culture is
being transformed
–
more
proactively
targeting our
lo
ng-ter
m inve
stor b
ase a
nd
–
increasing the a
vailability of our
Bo
ard c
ommi
tte
e Cha
irs to h
elp
strengthen understanding of their
committees’ approach
and work
Further details are available on
page 1
05
The ESG expert:
–
prov
ided a
n over
vi
ew of ES
G inves
tor
expectat
ions
–
des
crib
ed ma
jor tr
end
s in ESG a
nd the c
aus
al
drivers
–
cover
ed GS
K and s
ecto
r spe
ciﬁ
c iss
ues
,
including culture, net
zero and
intangibles and
–
shared
developments
around
ESG links
to
remuneration
The Committee considered the positive and negative
historical stakeholder perceptions together with
GS
K’
s focus on purpose, mission and culture
The company’
s new environment
al sustainability goals
had been announced the previous year
. The
company’
s approac
h could be further enhanced by
strengthening the alignment to remuneration
incentives with delivery of ES
G ambitions. T
he
expert’
s insights were considered as part of the
development by the Remuneration Committee of the
ES
G remuneration measures explained in the
Remuneration Report
Stakeholders:
Investors, patients, employees,
governments and regulators,
non-governmental organis
ations
and multilateral organisations
Other s1
72 duties:
Long-term results, our business
relationships, the community and our
environment, our reputation and
fairness between our shareholders
New G
SK
Board success
ion
planning:
The Nominations
& Corporate
Governance Commit
t
ee agreed:
–
a set of ke
y guid
ing pr
inci
ple
s for
the ne
w GSK
Board and
–
an
optimal
Board
skills ma
trix
This supported the
development
of
a roadmap
for fut
ure appointment
s
over t
he me
dium te
rm to he
lp del
iver
on o
ur sta
ted am
biti
ons fo
r pati
ents
and shareholders
Further details are
a
vailable on
pa
ge 1
07 and 108
The Committee considered the
optimal
future
co
mpo
siti
on of th
e new GS
K Boa
rd fo
r the fu
ture
T
o appropriately reﬂect stakeholder
interests, t
he
Bo
ard w
ishe
d to be c
onst
itute
d so as to:
–
be
dive
rse in
the
broadest
sense
–
ha
ve
appropriate
operational depth
across the
li
fe sci
enc
e valu
e chai
n and f
rom a ge
ner
al
commercial perspectiv
e
–
ha
ve
experience of major
customer
markets,
and
–
need
ed th
e ski
lls an
d insi
ghts o
f mem
ber
s who
co
uld co
ntin
ue to en
sure t
he com
pany
’s
leadership position
in ESG
Stakeholders:
Patients and consumers, our people
and investors
Other s1
72 duties:
Our long-term business
performance, workforce and
business relationships and
reputation
Settle signiﬁcant
litigation
Gilead – Dolutegravir global
settlem
ent
Th
e Boa
rd ap
prove
d the ter
ms of
the global
settlement and
licensing
agr
eem
ent in w
hic
h Gil
ead wou
ld:
–
make a
n upfr
ont pay
men
t of
$1
.25 b
illi
on to Vi
iV He
alt
hca
re
and
–
pay a 3% r
oyalt
y on al
l futu
re US
sales of
Biktar
vy and
in respect
of the
bictegravir
component of
any ot
her bictegravir
-containing
products sold
in the
US
The decision
to
settle this
global l
itigation
was
ta
ken af
ter c
aref
ul co
nsid
era
tion i
n the co
ntex
t of
br
ingi
ng ce
rt
aint
y for i
nvesto
rs a
nd to sup
por
t
ad
diti
onal i
nves
tmen
t in the b
usin
ess f
or the f
utur
e
and thereb
y beneﬁting
patient
s and
inv
estors
Further details are
a
vailable on
page
58
Stakeholders:
Investors, patients, governments and
regulators
Other s1
72 duties:
Long-term results, our business
relationships and our reputation
GS
K Ann
ual R
epor
t 2021
99
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Boar
d’
s appr
oac
h to continuous engagement
How we e
ngage w
ith our m
ain st
akehol
der gro
ups – inc
luding
patients, shareholders, consumers, customers and employees
– acr
oss th
e comp
any is sum
maris
ed on pa
ges 44 a
nd 45 of
our stra
tegic
report.
How the
Board considered th
e int
erests of
our stakeh
olders in
its d
iscus
sion
s and de
cisio
n mak
ing in 2021 is set ou
t in the:
–
Se
ction 1
72 st
atement o
n page 1
1
6, and th
e secti
ons it
references in t
his Annual
Report
–
principal decisions
the Board and
its committees
made,
on pa
ges 96 to 9
8
Our s
takeh
older
s rig
htly have hig
h expe
ctati
ons of us
. Our
dynamic operating
enviro
nment presents
many
challenges and
opportunities. The Board aim
s t
o mak
e sure
that
remainin
g
commercially successful is balanced and al
igned with
meeting
our stakeho
lders’ e
xpectations, upholding
our rep
utation,
mai
ntain
ing our li
cenc
e to oper
ate and bui
lding tr
ust. T
he Bo
ard
eng
ages w
ith many s
takeh
older
s, to ens
ure it i
denti
ﬁes a
nd
responds to
their
expectations e
ffectively
.
The inﬂuence and importanc
e
of different stakeholder g
roups
can vary,
depending
on the
matter bein
g considered. Cert
ain
st
akehol
ders’ in
teres
ts can b
e in con
ﬂict
, mean
ing the B
oard
needs to
make
balanced judgements.
Stakeholde
r engagemen
t and
feedback
helps us
identify
emerging issues. It also enables
the Board t
o mak
e decisions
in
the c
ontex
t of what i
s releva
nt and imp
or
tant to e
ach of the
m.
Our p
rinc
ipal Bo
ard c
ommit
tees
, and th
e GL
T
, un
der
take
engagement
on th
e Board’
s
behalf in
accordance with
their
rem
it. Th
is mea
ns that th
ey can bui
ld a det
ailed u
nder
stan
ding
of how o
ur actio
ns or pla
ns are
/
or may impa
ct sta
kehol
ders
.
These insights
are shar
ed with
the Board,
as appropriat
e.
In p
ar
ticula
r
, the Boa
rd rec
eive
s a subs
tanti
al amou
nt of
information
about stak
eholders’ perspectives
from the
work
of the
Corporate
Responsibility Committee,
which is
discussed
on pa
ges 1
04 and 105.
Board members regularly receive
:
–
the C
EO’
s Boa
rd rep
or
t
–
a speciﬁc external stakeholders report. This pro
vides
str
ategic in
sight
s base
d on an an
alysi
s of key develo
pment
s,
ach
ievemen
ts and ri
sks imp
actin
g our rep
utati
on and th
e
perceptions of
external stakeholders
–
a month
ly in
vestor
relations
report which summarises inv
estor
perceptions
–
regular corporat
e gov
ernance and
litigation
and regula
tory
up
dates
Th
e Boar
d also le
arns o
f stake
holde
r views th
rough:
En
gage
ment an
d feedb
ack even
ts su
ch as:
the q
uar
t
erly
inves
tor res
ults c
alls
, the annu
al gen
eral m
eeting
, empl
oyee
sur
vey re
por
ts, a
nd throu
gh the Work
forc
e Engag
ement
Dir
ector
’
s rep
ort
s and exp
er
ts pre
senti
ng at Boa
rd or
co
mmit
tee meet
ings
. In par
tic
ular, durin
g 202
1
, th
e Inves
tor
Upd
ate and the C
hair a
nd SI
D’s meetin
g with I
nvestor F
orum
mem
ber
s provid
ed addi
tiona
l sourc
es of inve
stor fee
dbac
k.
Other oppor
tunities
:
t
o gain
wider stake
holder vie
ws are
prov
ided d
uring th
e annua
l strate
gy meet
ing wit
h the GL
T
, as
par
t of th
e annua
l budg
et and pl
anning p
roce
ss
, and in
reviewin
g speciﬁc aspects o
f the
company’
s
policies
or
strat
egy
.
In addition,
Board members are
encouraged
to
meet i
ndividually
with employ
ees, shareholders and other k
ey stak
eholders
dur
ing thei
r induc
tion, a
nd then o
n an ong
oing ba
sis
. They ar
e
encouraged t
o report to t
he Board on
such experiences where
relevant
and ma
terial.
Our people
W
e ha
ve
well-established and
strong enga
gement mechanisms
wit
h our col
leagu
es, w
hich a
re des
crib
ed on pag
es 1
1 a
nd 45.
T
wo key g
overna
nce ch
annel
s help co
mmuni
cate wha
t our
peo
ple ar
e think
ing to the b
oardr
oom:
–
fee
dback f
rom our g
lobal
, as well a
s sma
ller, more ta
rgete
d
PU
LSE e
mploye
e sur
veys
–
the wor
k of our Work
forc
e Enga
geme
nt Dire
ctor
, Dam
e
Vi
vienn
e Cox
, who reg
ular
ly gathe
rs and e
xplai
ns coll
eagu
es’
view
s to the Boa
rd, a
s she out
lines b
elow
Th
e Chair a
nd othe
r Non-
Exe
cutive D
irec
tors a
lso reg
ular
ly
mee
t our peo
ple ar
ound the G
roup a
nd repo
rt b
ack to the
Bo
ard. A
s COVI
D-
1
9 re
stri
ctio
ns perm
itte
d durin
g the year,
they we
re ple
ased to m
eet wit
h our emp
loyees i
n pers
on,
indi
vidu
ally a
nd in sma
ll group
s, a
s well as c
ontinu
ing to meet
virtually.
The Chair
, W
or
kforce Engagement Direct
or and Corporate
Responsibility Committee
Chair designa
te
met wit
h leaders of
our e
mployee r
esou
rce gr
oups (ER
Gs
), for exa
mple
, as par
t of a
continuing dialogue about progress on our
inclusion and
dive
rsit
y age
nda
, as well a
s on othe
r issu
es that m
atter
ed to
ERG members and employ
ees.
202
1 ha
s been a s
igniﬁ
can
t year of ch
ange fo
r our peo
ple. T
he
Futu
re Read
y tran
sform
ation pr
ogra
mme ha
s intensi
ﬁed a
nd
increased anticipation
around t
he demerger
of Consumer
He
althc
are a
nd the sha
pe of GS
K
. Ahea
d of this
, PU
LSE
sur
veys w
ith sma
ller gr
oups of e
mployee
s have mea
nt that the
Bo
ard and G
L
T c
ould c
heck s
entime
nt more q
uick
ly and
fre
quent
ly
, and c
ould prov
ide val
uabl
e insigh
ts on the i
mpact o
f
maj
or init
iative
s, events o
r comm
unic
ations
.
10
0
GS
K Ann
ual R
epor
t 2021
Thi
s year, the Boa
rd and G
L
T s
pent m
ore time i
n listen
ing
se
ssio
ns with l
eade
rs and s
mall gr
oups of e
mploye
es who h
a
ve
front
-line roles across t
he company
.
This has helped t
o better
und
erst
and the f
uture o
f and buil
d peop
le’
s con
ﬁden
ce in GS
K
– as we
ll as tes
ting an
d listeni
ng to feed
back on t
he new
pur
pose
, strate
gy and cu
lture. I
n 202
1 Emma h
eld mo
re than 25
sma
ll grou
p ses
sions w
ith the wo
rkf
orce. T
he G
L
T cum
ulative
ly
hel
d more th
an 40 se
ssio
ns spe
ciﬁ
call
y focus
ed on new GS
K
.
Thi
s provi
ded ri
ch feed
back
, whic
h has h
elped s
hape i
nterna
l
co
mmunic
ation
s and ach
ieve rec
ord eng
agem
ent levels
, wit
h
37
,00
0 empl
oyees jo
ining t
wo live event
s.
Pos
t
-event s
ur
veys show go
od prog
res
s is bein
g made in
exp
laini
ng new GS
K and bui
lding c
onﬁd
ence
, with le
ss po
sitive
sen
timent a
round h
ow employe
es have be
en fee
ling. T
he Boa
rd
is ac
utely awar
e that the p
andem
ic has i
ncre
ase
d fatigue a
nd
red
uced r
esil
ienc
e for many of o
ur peop
le. Th
is has r
einfor
ced
the i
mpor
tan
ce of pr
iorit
ising a
nd car
ing for o
ur peop
le and
prov
iding th
e supp
ort t
hey need to b
e succ
ess
ful. T
he Boa
rd
mon
itors th
is not onl
y throu
gh empl
oyee enga
gemen
t, but a
lso
wit
h quar
terl
y monito
ring of h
ow many emp
loyees a
re tak
ing up
sup
por
t, how ma
ny are ab
sent
, and how ma
ny are le
aving the
co
mpany. The B
oard wa
s plea
sed th
at the G
L
T ch
ose to
rec
ogni
se ever
y empl
oyee wit
h a week’s tha
nk you pay awar
d
in re
cogn
ition of r
esil
ienc
e and str
ong deli
ver
y in ex
traor
dina
ry
circumstances.
Board’
s approac
h to continuous engagement
continued
Thi
s is my thir
d year a
s W
ork
forc
e Engag
ement D
irec
tor
. In
this t
ime, I have a
ppre
ciated th
e chanc
e to meet w
ith dif
fer
ent
peo
ple ac
ross th
e comp
any and to li
sten ca
reful
ly to their
view
s and pe
rspe
ctive
s. Du
ring th
e year, the enga
geme
nts I
have at
tended h
ave conti
nued to be v
irtu
al; however, I am ver
y
ple
ase
d that thi
s has not p
revented p
eopl
e from be
ing ver
y
ope
n and tr
anspa
rent in t
heir di
scus
sions w
ith me.
Purpose, strategy and culture
As I e
stab
lishe
d the pro
gram
me of vis
its at the s
tar
t of 2021
,
I was c
onsc
ious th
at it would b
e a year of s
igniﬁ
can
t chang
e.
The transformation programme t
o restructure t
he Group in
adva
nce of s
epar
ation wa
s launc
hed in 2020. I
t has c
ontin
ued
thro
ughou
t 202
1 and, w
ith it, t
here ha
s natur
ally be
en som
e
unc
er
taint
y for ou
r peop
le. The
refor
e, I was ke
en to use my
rol
e to under
sta
nd the imp
act of th
ese ch
ange
s on the
organisation. Addit
ionally
,
as the separa
tion has been
getting
clo
ser, it has r
aise
d ques
tions i
n the mind
s of our pe
ople ab
out
the f
uture sh
ape of new G
SK an
d the Co
nsume
r Hea
lthca
re
bus
ines
s as a new li
sted co
mpany. In pa
rt
icula
r
, I w
anted to
und
erst
and how th
e work do
ne by the Bo
ard an
d the GL
T to
deﬁ
ne a new pur
pos
e, stra
tegy and e
mbed a n
ew simpl
iﬁed
culture,
which is d
iscussed elsewhere in
the Annual
Report,
was bein
g experi
enced.
Pr
obabl
y the mos
t cons
istent m
ess
age I have he
ard thi
s year
is th
e value pe
ople at
tac
h to w
ork
ing fo
r a comp
any with a
str
ong sen
se of pur
pose a
nd a cle
ar str
ategy. Additi
onall
y
,
the p
eople I h
ave met are s
uppor
ti
ve of the new cu
lture. T
hey
appreciat
e the
simplicity and
the
clarity that
it brings.
I have co
ntinue
d, wit
h Jon, ou
r Chair, to enga
ge with o
ur
dive
rsit
y Emp
loyee Re
sourc
e Grou
ps (ERG
s
), spec
iﬁc
ally
on th
e impac
t of the ann
ounc
ement of t
he com
pany’s publ
ic
aspirations f
or impro
ving et
hnicity and gender
representation
in th
e work
force a
nd lea
ders
hip pos
itio
ns. O
verall
, their
re
spons
es were p
osit
ive whil
e conti
nuing to en
cour
age the
Bo
ard and G
L
T to i
ntensi
fy th
eir ef
for
ts to supp
or
t and
pro
mote diver
se ta
lent
.
Other engagement programme highlights
I joi
ned a Site D
irec
tors’ an
d Site Qu
alit
y Lea
ders’ m
eeting
co
mpris
ing a gro
up of emp
loyees w
ho had re
centl
y been
app
ointed to th
ese ro
les
. My mee
ting wi
th them wa
s par
t of a
longer induct
ion programme t
hey u
nderta
k
e. I
took
part in the
se
ssio
n wher
e they dis
cuss
ed the im
pact of t
he new cult
ure
on their roles. They
stressed the importanc
e
of ensuring
continuous impro
vement
at their
sites.
In th
e mid-
point of 2021
, I met wit
h HR lea
ders a
nd I was
imp
res
sed by the
ir ener
gy and c
ommit
ment, t
hrough to a
nd
beyon
d sepa
ration
. It wa
s clea
r that the
ir focus o
n Peopl
e,
Cul
ture, L
eade
rship a
nd Cap
abili
ty woul
d be key to supp
or
ting
an env
ironm
ent whe
re peo
ple ca
n thri
ve, and ad
ditio
nally h
ow
imp
or
tant th
e new simp
liﬁe
d HR sys
tems and o
perat
ing mod
el
woul
d be to ensur
ing qua
lit
y suppo
rt fo
r all our p
eopl
e.
Th
e ‘
A
head T
ogeth
er’ se
ssi
on was an a
mbiti
ous and we
ll-
rec
eive
d two-
day digi
tal event w
hich b
rought to
gethe
r 1
,
500
emp
loyees f
rom aro
und the wo
rld. T
he obje
ctive wa
s to shar
e
thin
king a
nd prog
res
s on the la
unch of t
wo new co
mpani
es
and ex
chang
e idea
s abou
t the opp
or
tuniti
es that li
e ahea
d.
Fi
nally, I spe
nt time wi
th a group o
f high po
tential C
omm
ercia
l
employees
from the
Greater
China and
Intercontin
ental region
who were completi
ng a virtual dev
elopment programme. W
e
dis
cuss
ed thei
r key lear
nings
, whi
ch were th
e impor
ta
nce of
devel
oping r
esili
ence a
nd buil
ding tru
st.
Af
ter eac
h meeti
ng with a
n employe
e group, I s
hare my
thou
ghts an
d obse
rvat
ions wi
th the le
ader
s and the B
oard o
n
a non
-attr
ibut
able ba
sis
. Perh
aps the m
ost val
uable a
spe
ct is
that o
n an ongo
ing ba
sis, t
hose v
iews and p
ersp
ecti
ves ca
n
be fact
ored int
o the
Board and GL
T discussions and
decision
making
.
Da
me Vivi
enne C
ox
W
orkforce Engagement Director
28 Feb
ruar
y 2022
Wor
k
force Engagement Direc
tor
GS
K Ann
ual R
epor
t 2021
101
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Our sharehol
ders
Th
e Boar
d seek
s t
o dir
ectly e
ngage w
ith pr
ivate reta
il and
institutional
shareholders in
several
way
s. These include regu
lar
co
mmunic
ation
s, the A
nnual G
ener
al Me
eting a
nd our an
nual
Gove
rnanc
e Me
eting, a
nd thro
ugh the wor
k of our I
nvestor
Rel
ations te
am, th
e Chair, Sir Jo
natha
n Symond
s and our
Company Secretary
, Vict
oria Whyte.
Dur
ing the ye
ar
, our C
EO
, Emm
a W
alms
ley
, and C
FO, Ia
in
Mackay
, ga
ve
quarterly results presentation
s t
o instit
utional
inv
estors, anal
ysts a
nd th
e media
by
webcast t
eleconf
erence.
Th
ey are als
o regul
arly j
oined by t
he CS
O, the Chie
f
Commercial Of
ﬁcer
, CE
O,
ViiV Healthcare, President Global
V
acc
ines a
nd the C
E
O, GS
K Cons
umer H
ealth
car
e. They a
re
avail
able to pr
ovide mo
re det
ailed i
nsigh
ts into thei
r area
s of
responsibility
.
Thr
ough re
gular m
eetin
gs, Em
ma and I
ain have an o
ngoin
g
and a
ctive di
alogu
e with in
stitu
tiona
l share
holde
rs ab
out our
per
fo
rmanc
e, pla
ns and o
bject
ives
. In 202
1 the C
EO held 56
indi
vidu
al mee
tings wi
th majo
r shar
ehold
ers an
d hoste
d 32
gro
up meeti
ngs wi
th actua
l and pote
ntial m
ajor sh
areho
lder
s.
Th
e CFO he
ld 84 in
divid
ual me
etings a
nd 46 gro
up meeti
ngs.
Th
e Chair h
as al
ways maint
aine
d an acti
ve dialo
gue wi
th
shareholders too
– includ
ing fund
and portfolio managers –
as we
ll as se
eing gove
rnan
ce prof
essi
onal
s. Dur
ing 2021 the
Cha
ir hel
d 43 meet
ings wi
th a ran
ge of inves
tors
, who make u
p
nea
rly 40
% of the c
ompa
ny’
s sha
re regi
ster. This en
able
s him to
have a cur
rent un
ders
tand
ing of inve
stor view
s, ins
ights a
nd
per
spe
ctive
s about t
he com
pany. He als
o covers w
ith inve
stors
,
Board succession planning
arrangements
in h
is capacity as
Cha
ir of the N
ominat
ions & C
orpo
rate Gove
rnanc
e Co
mmit
tee.
Th
e Chair, CEO an
d the res
t of the Bo
ard ha
d a par
ticul
ar focu
s
in 2021 on com
munic
ating ou
r plans a
bout th
e demer
ger to
shareholders and the fut
ure ambitions f
or GSK as a biopharma
bus
ines
s. As p
ar
t of this ex
tens
ive outr
each
, in June t
he CEO
and o
ther me
mber
s of the G
L
T ho
sted a vir
tua
l Inves
tor Upda
te
to prov
ide a cle
ar vie
w of the str
ategy for G
SK an
d its out
look
for gro
wth and ambitions.
In O
ctobe
r at an Inves
tor For
um-ho
sted event
, and in D
ece
mber
at the a
nnual G
overna
nce M
eetin
g, the Ch
air prov
ided a
n
upd
ate on how the B
oard a
nd its c
ommit
tees h
ave aligne
d
the
ir work to dr
ive the de
merge
r and es
tabl
ish key gover
nanc
e
work
stre
ams to sup
por
t deli
vering i
t and to foc
us GS
K’s future
as a biopharma business.
Inve
stor mater
ials fo
r thes
e events ar
e availab
le on gs
k.c
om.
Board’
s approac
h to continuous engagement
continued
Annual Governance Meeting
Thi
s year
’
s event wa
s vir
tual wi
th inst
itutio
nal sha
reho
lder
s, key
inves
tment i
ndust
ry b
odie
s and prox
y ad
visor
y ﬁr
ms. T
he Cha
ir
was joined by
our Senior Independent Director
,
W
orkforc
e
Engagement
Director
, Committee Chairs and
GSK’s e
xternal
audit partner
.
We share
d with i
nvestor
s the pri
oriti
es and f
ocus of th
e Boar
d
and i
ts com
mitte
es and p
rogre
ss ma
de in 202
1
. This i
nclud
ed a
continued focus
on strengthening
the fundamentals
of the
bus
ines
s, ma
intai
ning ESG l
eade
rshi
p, stron
g oversi
ght of
progress to
wards separation
to
creat
e a w
orld-leading
Consumer Healthcare company and the ne
w gro
wth outlooks
and a
mbiti
ons set fo
r GSK to d
eliver a s
tep-c
hange i
n
per
f
ormance from 2
02
2.
Th
e Remune
ratio
n Com
mitte
e Chair s
hare
d deta
ils of the
Co
mmit
tee’s review of exe
cuti
ve remune
ratio
n arra
ngem
ents for
GS
K ahea
d of sepa
ratio
n. Thi
s inclu
ded an u
pdated G
SK
pol
icy
, focu
sed on r
einfor
cing th
e delive
ry o
f the publ
ic
per
fo
rmanc
e ambi
tions s
et out in th
e IU in J
une 202
1 and
del
iver
y of our pu
blic ES
G comm
itment
s. Th
is will b
e submi
tted
to a bind
ing sha
reho
lder vote at th
e 202
2 AGM
.
The W
orkforce Engagement Director discussed her programme
of en
gagem
ents to gath
er and h
elp the B
oard fu
rth
er
understand o
ur people
’
s
perspectiv
es on o
ur ne
w p
urpose,
str
ategy an
d the new si
mpliﬁ
ed cul
ture and t
he CH de
merg
er
.
Th
e meetin
g was well r
ecei
ved and s
hare
holde
r feedb
ack was
sha
red su
bseq
uently w
ith the r
est of th
e Boar
d.
Annual General Meeting
Due to r
estr
ictio
ns on pub
lic gath
ering
s in ligh
t of the COV
ID
-
1
9
situation
at
the time,
shareholders were
unable t
o ph
ysically
at
tend the 2021 A
GM h
eld at our r
egis
tered of
ﬁc
e in Br
entf
ord.
Th
erefor
e, our pr
iori
ty wa
s to seek to pr
ovide li
ve elec
troni
c
acc
es
s t
o the AG
M for as ma
ny shar
ehold
ers a
s pos
sible
. Our
aim wa
s to prom
ote a simil
ar ty
pe of me
aning
ful eng
ageme
nt
wit
h the Boa
rd as wou
ld occ
ur at a conve
ntiona
l A
GM
.
Pleasingly,
1
42
shareholders joined the
meeting electronically t
o
watch or l
isten to up
dates fr
om our Ch
air and t
he CEO, to as
k
questions, and v
ot
e. All our
proposed resolutions
were
approved
by
shareholders, with majorities rangi
ng from
93%
to 99
%.
It i
s intende
d that our AG
M in May 2022 wi
ll be hel
d at the
Soﬁ
tel Lon
don He
athrow H
otel and w
ill use a hy
brid fo
rmat to
all
ow our sha
rehol
der
s the ﬂexi
bilit
y to atte
nd, as
k ques
tions a
nd
vot
e either
in person or
electronically
.
See further details on
p
a
g
e
2
91.
10
2
GS
K Ann
ual R
epor
t 2021
Boar
d-led purp
ose and cultur
e
The Board’s
role is
to
promote
GSK’s sustainable success
,
drive long-
term gro
wth for shareholders and v
alue for
st
akehol
ders
. Our s
trategi
c repo
rt on p
ages 1 to 81
dem
onstr
ates how we wor
k to achieve t
hese g
oals
. Our
Co
rpor
ate Gover
nanc
e repor
t on p
ages 8
3 to 1
1
8 expla
ins
how ou
r governa
nce ar
rang
ement
s suppo
rt o
ur overs
ight of th
e
str
ategic tr
ansf
ormati
on into t
wo sepa
rate bus
ines
ses
, as well
as o
ur new amb
ition
s for patie
nts and s
hare
holde
rs. T
his wor
k
wil
l be supp
or
ted by our re
newed co
mpany cu
lture.
Th
e Boar
d is res
ponsi
ble for s
etti
ng the Gr
oup’
s overa
ll
pur
pose a
nd cultu
re. Th
is is fun
damen
tal to co
nduct
ing our
business to the
highest standards, promoting long-
term
suc
ces
s and un
lock
ing, p
rotecti
ng and ma
xi
misin
g value for
shareholders
.
In th
e four yea
rs Em
ma W
alms
ley ha
s been C
EO
, the B
oard h
as
worke
d to chang
e our cul
ture. W
hile al
ways bein
g guide
d by
our p
urpos
e and val
ues
, our cultu
re is mov
ing to one th
at works
more effectively t
ow
ards our l
ong-t
erm strat
egic priorit
ies:
In
novation
, Per
forma
nce
, T
ru
st. Th
e Boar
d saw the m
omentu
m
and a
mbiti
on arou
nd the t
wo new bus
ines
ses in 2021 as a
uni
que opp
or
tunit
y to unif
y our pe
ople b
ehind on
e purp
ose,
one s
trateg
y and one c
ulture
.
Our n
ew purp
ose is to un
ite scie
nce, t
alent a
nd tech
nolog
y to
get a
head of d
isea
se. We have a cle
ar amb
ition to m
ake an
even mo
re mea
ningf
ul impa
ct on hum
an hea
lth and c
reate
bet
ter
, mor
e sust
ainab
le retur
ns. We want to do t
his in an
environment
that allo
ws outstanding
people to
thrive.
For t
he Boa
rd, ‘get
ting ah
ead’ m
eans pr
eventin
g disea
se a
s well
as tr
eatin
g it. It m
eans i
nnovatin
g by combi
ning id
eas
,
capabilities and
know-ho
w inside
and ou
tside GSK. Our focus
for R&
D is to deli
ver new vac
cine
s and me
dicine
s usin
g the
sci
ence o
f the immu
ne system
, huma
n geneti
cs an
d advanc
ed
tech
nolog
ies
. And we do th
is mak
ing a de
ep com
mitme
nt to our
stakeholders t
o operat
e responsibly
.
Es
sent
ial to the
se pla
ns is emb
eddin
g a new
, simp
liﬁ
ed cultu
re,
one i
n which we:
–
are a
mbiti
ous for p
atient
s, by del
iverin
g what mat
ters b
ette
r
and faster
–
are a
ccou
ntabl
e for imp
act, by h
aving cl
ear own
ersh
ip and
the s
uppor
t to suc
cee
d
–
do th
e right th
ing, by wor
kin
g with inte
grit
y and c
are an
d
und
erst
andin
g that pe
ople co
unt on us
Th
e Boar
d’
s disc
uss
ions dur
ing the ye
ar focu
sed on t
he new
pur
pose a
nd cultu
re cent
red on:
–
the rat
ionale for
this
change
–
a revi
ew of emp
loyee eng
ageme
nt and fe
edbac
k when
trialling t
his change
–
the ne
xt s
t
eps t
he Boa
rd and G
L
T ne
eded to t
ake to make
this c
hang
e real fo
r our peo
ple
T
o m
ore cle
arl
y identi
fy w
here we a
re mak
ing pr
ogre
ss – and
whe
re we nee
d to make cha
nges – t
he Boar
d and G
L
T have
cha
nged ho
w we track a
nd mea
sure th
is cultu
re chan
ge. We are
now using
more insights, measuring more
frequently
, being
more
re
spons
ive and m
akin
g this inf
ormati
on ea
sier to ac
ces
s. T
his
wil
l help dr
ive prog
res
s in the sh
or
t
-term an
d make sig
niﬁc
ant
cha
nge over th
e long-ter
m. Fo
r fur
ther de
tails s
ee pag
e 1
1
.
Th
e Boar
d was als
o brie
fed on the p
ropo
sed new mi
ssi
on,
str
ategy an
d cultur
e for Hal
eon. I
ts cul
ture wil
l be focu
sed on
three beha
viours:
–
Go b
eyond
–
Do w
hat mat
ters mo
st
–
Keep i
t human
Th
ese ar
e desc
ribe
d in more d
etail o
n page 4
3 and wer
e
lau
nched fo
rmal
ly by the H
aleon C
hair a
nd CEO De
sign
ates at
the
ir Capi
tal M
arket
s Day on 28 Feb
ruar
y 2022.
Th
e Boar
d will al
so supp
or
t GSK
's new cul
ture by ap
pointi
ng
and promoting
the right
people, upholding
and incentivising the
right behaviours
with strong go
vernance controls
and thorough
pro
ces
ses
, and tr
aining a
nd devel
oping e
mployee
s.
Th
e Boar
d reco
gnise
s that the ‘
tone f
rom the top’ dr
ives a
company’
s cultu
re. The Board and GL
T must be role
models
and l
ead by exa
mple
, using th
eir wor
ds, ac
tions a
nd behav
iour
s
to set
the t
emplat
e for
our people. Lik
e all o
ur people, members
of the B
oard t
ake the fo
llowin
g key train
ing and awa
rene
ss
modules:
–
Li
ving our va
lues a
nd expe
ctati
ons, w
hich ex
plor
es our va
lues
,
exp
ectat
ions an
d cultur
e and how th
ey apply to o
ur
ope
ratio
ns and ways of wo
rki
ng
–
Anti-b
riber
y and corrupti
on
–
Inclusion and
diversity
For m
ore det
ail ab
out our n
ew
, singl
e deﬁni
tion of c
ulture
, and
how we inve
st in an
d reward o
ur peop
le, se
e page
s 1
1 and 37
.
Th
e Boar
d also re
main
s commi
tted to ge
ttin
g ahea
d of issu
es
that m
atter fo
r the sus
taina
bilit
y of our c
ompa
ny
, be it pr
icing
and a
cce
ss, th
e enviro
nment
, or str
onger di
vers
ity a
nd incl
usion
.
Mo
re prog
res
s in thes
e are
as is se
t out on pa
ges 34 to 40 o
f
our s
trategi
c repo
rt a
nd in our ES
G Per
form
ance Re
por
t,
avai
lable on gsk.com.
Our C
ode o
f Cond
uct em
bodie
s our val
ues, s
o the Bo
ard
reviews
and refreshes it
regularly
.
It is a
vailable
on gsk.com.
Our c
orp
orate st
andar
ds and e
mploye
e polic
ies ar
e align
ed
wit
h our valu
es. T
hey inc
lude our l
ong-s
tand
ing Spe
ak Up
syste
m, whi
ch ena
bles ou
r peop
le to rais
e matte
rs co
nﬁde
ntiall
y
or an
onymou
sly wi
thout fe
ar of re
pris
al. Th
e Boar
d, thro
ugh the
Audit &
Risk Committee, re
view
s Speak Up
reports provided
by
our L
egal a
nd Com
plia
nce tea
m. Our S
peak U
p chan
nels an
d
rep
or
ts are ma
nage
d by an inde
pende
nt thir
d par
ty, with c
ase
s
the
n investi
gated by Le
gal an
d Comp
lian
ce.
GS
K Ann
ual R
epor
t 2021
10
3
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Boar
d performance
Th
e Boar
d evaluate
s its per
for
manc
e, and t
hat of its
co
mmit
tees
, ever
y year an
d is facil
itated ex
ter
nally a
t leas
t once
ever
y thre
e year
s. E
x
ternal ev
aluati
ons were f
acili
tated in 201
9
and 2020 by J
an Ha
ll of No 4, a b
usine
ss ad
visor
y c
ompany.
In 2021
, the Boa
rd and C
ommi
ttee eva
luatio
n proc
ess wa
s a
co
mposi
te of thre
e key ass
ess
ments
. Fir
st, Kor
n Ferr
y
co
nducte
d inter
views w
ith ea
ch Boa
rd Dir
ector to eli
cit the
ir
view
s on the id
eal fu
ture co
mpos
ition of t
he Boa
rd. Di
recto
rs
were pro
vided in
advance with
informat
ion on
peer company
Bo
ard co
mposi
tion a
nd comm
itte
es as a
n input to the
se
discussions. The conv
ersations with
Board Directors cov
ered a
range of topics including
:
–
Th
e key chall
enges a
nd opp
ort
unitie
s for GS
K over the ne
xt
ﬁve ye
ars (eg sci
ence
, M&
A
, Chin
a, ar
eas o
f manag
ement
strength and
support)
–
Th
e cultur
e of GSK
–
Whi
ch sk
ills an
d exper
ienc
e to prior
itis
e in recr
uitin
g new
No
n-E
xecu
tive Dir
ector
s to the Bo
ard. T
he impe
rative
s and
desirable attributes w
ere considered
against the
strat
egic
opportunities tha
t lie
ahead and
–
Th
e worki
ngs of B
oard c
ommit
tees a
nd how they o
btain
ed
external input
Th
e ﬁnding
s form
ed the ba
sis for t
he tran
sitio
n plan a
nd
opti
mal co
mpos
ition of t
he new GS
K Boa
rd. Th
e Nomin
ations &
Co
rpor
ate Gover
nanc
e Comm
itte
e repor
t on p
age 1
0
7 expl
ains
how th
e resul
ts of this wo
rk are b
eing t
aken for
war
d. The n
ext
step fo
llowed th
e annua
l Boar
d and G
L
T st
rategy m
eeting
, when
Non-E
xecutive
Directors formed three
groups t
o discuss their
thou
ghts on th
e day’s disc
ussi
ons. T
hey agr
eed the
ir key insi
ghts
and p
rior
itie
s. The
se wer
e then de
bated by the B
oard t
he nex
t
day. The c
onclu
sions r
each
ed were in
corp
orated i
nto the Bo
ard’s
pri
orit
ies for a
ction i
n 202
2. F
inall
y
, Non-
Exe
cuti
ve Dire
ctors
completed a
short questionnaire on the performance of the
Bo
ard and i
ts com
mitte
es dur
ing the ye
ar
. The re
spo
nses we
re
collated
and summarised be
fore being
considered b
y the
Board.
Th
e Boar
d then agr
eed up
dated pr
iori
ties for t
he year a
head
whi
ch enc
apsu
lated the a
ction
s identi
ﬁed at e
ach st
age of th
e
evalu
ation pr
oce
ss. I
n addi
tion, i
t was agr
eed to us
e the annu
al
Str
ategy mee
ting of th
e Boar
d and G
L
T in th
e Autumn o
f 202
2
to res
et and r
ecal
ibrate th
e Boar
d for the fu
ture as n
ew GSK
.
Board committees
Th
e review of t
he Boar
d comm
itte
es involve
d ques
tionn
aire
s
being completed
by committee members. Each committee was
considered to
operate
effectively
. T
o
enhance their
performance
fur
the
r
, the foll
owing im
proveme
nt point
s were agr
eed:
–
Corporat
e
Responsibili
ty:
to con
tinue to br
ing dir
ect
ex
terna
l stake
holde
r per
spec
tives i
nto the Co
mmit
tee’
s
dis
cuss
ions to pr
ovoke quali
ty de
bate in re
spec
t of the
company’
s T
rust
priority
–
Audit & R
isk:
to c
ontinue to b
alan
ce the C
ommi
ttee’s work
bet
ween c
urre
nt issu
es and l
onger te
rm per
spe
ctive
s. Th
e
Commit
t
ee w
ould also contin
ue t
o seek more f
ocused
mater
ials to e
nhanc
e its over
sight f
ur
ther
–
Remuneration:
to bri
ng more ex
ter
nal per
spe
ctive
s on
changing remu
neration pract
ice and trends
to
the
Committee’
s
attenti
on t
o ensure
it rem
ained cont
emporary in its
thinking
–
Nominatio
ns
& Corpor
ate Gov
ernance:
to foc
us on de
liver
y
of the t
rans
ition p
lan to cre
ate the opti
mal co
mpos
ition fo
r the
new
GSK Board
–
Science:
to conti
nue to sup
por
t the C
SO and hi
s lead
ersh
ip
team w
hils
t provid
ing its p
ersp
ecti
ves and o
pinio
ns on R&D
’
s
wor
k
Chair
Th
e SID s
ought fe
edba
ck from e
ach of th
e Dire
ctors o
n the
per
fo
rmanc
e of the B
oard a
nd Chai
r
. The una
nimou
s view wa
s
that th
e Boar
d is fun
ctioni
ng ver
y ef
fecti
vely an
d has be
en
continually
strengthened
; and
the
Chair has pro
vided ex
cellent
le
ader
ship thr
ougho
ut an imp
or
tant an
d event
ful year. Boa
rd
cul
ture was ve
ry i
nclus
ive and pu
rpos
eful in f
ocusi
ng on the
re
ally im
por
tant i
ssue
s of str
ategy, per
form
ance a
nd tal
ent.
Progress on 2020 Board e
v
aluation
Pr
ogre
ss aga
inst the c
oncl
usion
s of the 2020 Bo
ard eval
uation r
eview is s
et out be
low
.
Areas of focus for 2021
Progr
ess/achievements
Consideration had and would continue to be given to stop any unnecessary
tasks to free more time to focus on the priorities with the pre-condition that
creating shareholder value was of prime importance
Board priorities were agreed and adhered to in structuring B
oard discussions.
Key priorities were the key driver in examining performance and transactions.
This would remain a key focus.
Consideration would also be given to making the best use of the Board’
s
time during virtual meetings and incorporating opportunities for ‘unstructured
discussions’
where possible
There was increased use of break-out sessions to focus on and bring different
perspectives to particular issues. In October
, to facilitate greater in person
interaction despite ongoing COVI
D-19 restrictions, the Board, committee and
annual strategy meetings were held at dual sites in the U
K and US. The Chair
led the meeting in the U
K for UK/
European-based Directors and the CE
O led
the meeting for US-based Directors. In addition, speciﬁc time was set aside
for G
L
T members to meet with Board members without a set objective or
agenda. These discussions were greatly appreciated by all and a welcome
opportunity to connect.
The Science Committee would look to further deepen its understanding of
how R&D’
s resources were allocated
The Board and Science Committee meeting agendas were designed to
facilitate these deeper dives in line with B
oard’
s agreed key priorities.
See page 1
06
There was a desire to further enhance root cause analysis that was
undertaken when incidents or issues occurred. This was to ensure they
could be avoided in the future and as part of the Group’
s approac
h to
further improving performance
This enhanced approac
h was the foundation of the global safety review.
10
4
GS
K Ann
ual R
epor
t 2021
Boar
d committee r
ep
orts
Corporate Responsi
bility C
omm
it
tee
repor
t
L
ynn Elsenhans
Corporate Respon
sibility Committee
I am pl
eas
ed to pre
sent thi
s repo
rt
, whic
h will be my s
ix
th and
ﬁna
l one as C
hair o
f the Co
rpor
ate Resp
onsib
ilit
y Com
mitte
e
(
the C
ommi
ttee).
Role of the Committee
Th
e Comm
itte
e overse
es GS
K’s T
r
ust pr
iori
ty and t
he
company’
s
progress against
our
T
rust commitments, which
reﬂ
ect th
e most i
mpor
tan
t area
s for re
spons
ible a
nd sust
aina
ble
bus
ines
s grow
th. O
ur T
r
ust pri
orit
y cover
s man
ageme
nt’s work
acr
oss ES
G factor
s, an
d it is inte
gral to GS
K’s over
all str
ategy.
Th
e Comm
itte
e has over
sight o
f the view
s and inte
rests o
f our
inter
nal an
d exte
rnal s
takeho
lder
s and rev
iews is
sues t
hat coul
d
seriously impact GSK’
s business and
reputation.
In d
oing so, t
he Com
mit
tee has c
ontinu
ed to overs
ee:
–
progress on our
T
rust commitments thro
ugh regular
reports
from GL
T members and senior mana
gers
–
GSK’s approach
to
managing
the risks
and opportunities
as
soci
ated wit
h ESG fac
tors tha
t help cr
eate valu
e for
shareholders and society
–
management un
derstanding of k
ey
issues and stakeho
lder
per
spe
ctive
s by listen
ing dire
ctly to key in
depe
ndent ex
per
t
voices and
–
the p
rinci
pal ri
sks mos
t releva
nt to its ar
ea of exp
er
tise an
d
responsibility
, namely
: product q
uality
, non-promo
tional
engagement,
supply con
tinuity
,
enviro
nmental sustain
ability
and h
ealt
h and saf
ety
Key activities in 2021
Safet
y cu
lture:
The C
ommi
ttee rev
iewed pr
ogre
ss on th
e
del
iver
y of a glob
al saf
ety im
proveme
nt plan a
cros
s GSK
’s
bus
ines
ses d
evelope
d afte
r a comp
rehen
sive and f
ar-rea
ching
ex
terna
l evaluat
ion of our s
afet
y cultur
e. In rev
iewin
g the acti
ons
for em
bedd
ing and s
usta
ining th
e plan’s safet
y imp
rovement
s
into th
e future
, the Co
mmit
tee ha
s encou
rage
d a stron
g focus
o
n:
–
edu
catio
n and tra
ining to f
urt
her buil
d cap
abili
ties; whi
le
–
ens
uring th
ere is c
lear a
ccou
ntabi
lity f
rom le
ader
s for safe
ty
thro
ugh hei
ghtene
d awarene
ss an
d appli
catio
n of GS
K’s
sim
pliﬁ
ed cult
ure to “do the ri
ght thing w
ith inte
grit
y and c
are
because people count on us
”
Inc
lusion & d
iversi
ty (I&
D):
The C
ommi
ttee c
ontinu
ed to
as
ses
s the pro
gres
s of GS
K’s I&D s
trateg
y and co
mmitm
ents.
Thi
s has in
clude
d in par
ti
cular, impl
ement
ation of c
hange
s to
HR p
roce
sse
s and mo
nitorin
g arra
ngem
ents ne
eded to su
ppor
t
the d
eliver
y of th
e aspi
ratio
nal dive
rsit
y tar
gets an
nounc
ed in
la
st year
’
s Ann
ual Rep
or
t. The C
omm
ittee c
onsi
dere
d key
requirements
of strengt
hening succession planning
ar
range
ments fo
r diver
se ta
lent an
d the app
licati
on of the
bro
ad con
cept of ‘eq
uity
’ in the wor
kpl
ace to fur
the
r evolve
the I
&D str
ategy. I&D i
s an incr
edibl
y impo
rt
ant par
t of th
e
cul
ture at GS
K and the C
omm
itte
e reviews a
nd supp
or
ts the
comprehensive ann
ual I&D training
and a
wareness session
und
er
taken by th
e Boar
d and all o
ur peop
le.
Charit
able gi
ving:
GSK h
as had a t
remen
dous an
d
longstanding
commitment
to
charitable g
iving and
community
invol
vement
. The C
ommit
tee rev
iewed thi
s exis
ting app
roach
and h
ow GSK c
ompa
res to its p
eer
s. It c
onsi
dered h
ow to
lever
age thi
s appro
ach to ali
gn to GSK
’s core pu
rpos
e, str
ategy
and c
ulture a
nd enc
ourag
ed its im
pact to b
e meas
ured in te
rms
of it
s contr
ibuti
on to the co
mmitme
nt anno
unce
d at the Inve
stor
Upd
ate in Jun
e, to posi
tively i
mpac
t the hea
lth of over 2
.5 bil
lion
peo
ple over th
e nex
t ten year
s.
E
SG per
for
manc
e for new GS
K:
Th
e Com
mitte
e reviewe
d
man
ageme
nt plan
s for the si
x are
as of ESG f
ocus for n
ew GSK
,
out
lined to inve
stors by t
he com
pany in Ju
ne 202
1
. Wor
king
wit
h the Audi
t & Risk a
nd Remu
nerat
ion Co
mmit
tees
, the
Committee revie
wed
management’
s
proposals for
speciﬁc
metr
ics to m
easu
re prog
res
s on thes
e six a
reas a
nd the
recommendation of
the
creation of
a sing
le ESG
per
f
ormance
rati
ng as
ses
sment a
s a KP
I for GS
K afte
r the dem
erger. It al
so
revi
ewed an ap
proa
ch for the r
isk ma
nagem
ent and g
overnan
ce
oversight
arrangements t
o measure and
report ESG
per
fo
rmanc
e. Th
e Comm
itte
e was ple
ase
d to suppo
rt th
ese
cha
nges to h
elp ret
ain and d
evelop fu
rth
er GS
K’s ESG
leadership position.
Consumer He
althcare (CH):
In preparat
ion for
the demerger
,
the C
ommi
ttee h
as revi
ewed and di
scus
sed w
ith CH
man
ageme
nt their p
rogr
ess in d
evelopi
ng a dist
incti
ve and
holistic responsible business and ESG
framework tha
t w
ould
sup
por
t its pu
rpos
e, str
ategy and c
ulture o
n beco
ming a li
sted
co
mpany wi
th a focus o
n the key re
spons
ible bu
sine
ss is
sues
for th
e new com
pany. In doin
g so, the C
ommi
ttee s
cruti
nised
this f
rame
work and t
he prop
osed t
arget
s, inc
ludin
g
environm
ental sustainabi
lity targets, which
hav
e in
corporated
key ins
ights an
d expe
ctati
ons gath
ered fr
om inves
tors
, analy
sts
and other
external stakeholders.
Stakeholder insights and benchmarking
Th
e Comm
itte
e pays clo
se atten
tion to the evo
lving v
iews and
expectations o
f the
company’
s br
oad range o
f ke
y stak
eholders.
It receives a regu
lar report on stakeholder
insights
at each
mee
ting to ens
ure it c
onsid
ers th
e issu
es that m
a
y have a
bearing on GSK’s
reputation
and the
delivery of ou
r responsible
bus
ines
s agend
a. E
mployee i
nsigh
ts and fe
edbac
k were
discussed in relat
ion t
o the
progression of t
he company’
s
mod
ern em
ployer ag
enda
.
GS
K Ann
ual R
epor
t 2021
10
5
Strategic report
Governance and remuneration
Financial st
atements
Investor information
In ke
eping w
ith a de
sire to co
ntinua
lly bri
ng ex
terna
l
per
spe
ctive
s into the C
ommit
tee ro
om, in 2021 the C
ommit
tee
beneﬁted fr
om direct
engagement
and
insights
about
exp
ectat
ions of o
ur secto
r and the c
ompa
ny spec
iﬁc
ally in t
wo
are
as
. Fir
stly, was re
ceiv
ing an ex
per
t's ins
ights o
n investor
view
s on ESG tr
ends an
d expe
ctati
ons, th
e outcom
es of wh
ich
are r
epor
ted on p
age 98
. Sec
ondly, was g
atheri
ng expe
rt v
iews
on th
e risin
g expec
tatio
ns of gover
nment
s and inves
tors fo
r
bus
ines
ses to un
ders
tand H
uman R
ights i
mpact
s and ri
sks.
Th
e Comm
itte
e monitor
s inves
tor expe
ctati
ons on ES
G
reporting and disclosure on
an ongoi
ng basis. GSK continues
to ali
gn to best p
ract
ice in r
epor
ting
, in acc
orda
nce wi
th the
Sustainability Account
ing S
tandards Board (
see 202
1 ESG
Performance Repor
t
) and
the
T
ask Force on Climat
e-related
Financial Discl
osures (
see page 4
9
).
In a
dditio
n, the C
ommi
ttee m
onitor
s the com
pany’s ESG
per
fo
rmanc
e in var
ious in
dice
s and in re
lation to o
ur peer
s. I
n
this r
esp
ect, we we
re par
tic
ular
ly ple
ased t
hat GS
K was ra
nked
ﬁr
st in the D
ow Jone
s Sust
aina
bilit
y Ind
ex in the ph
arma
ceuti
cal
ind
ustr
y grou
p, had imp
roved our C
arbo
n CDP r
ating f
rom B to
A-, and wa
s rated in t
he top 3% of S
usta
inaly
tic
s’
pharmaceuticals sub group. These and o
ther external
benchmarks help t
o e
vidence GSK’s
acknowledged leadership
in ES
G, an
d this co
ntinue
s to be a key dri
ver in the g
oal to
deliver h
ealth impact and
shareholder re
turns.
Committee aims for 2022
Th
e Comm
itte
e will co
ntinue to s
cruti
nise an
d monito
r progr
ess
on GS
K’s mater
ial T
rust to
pics a
nd rel
evant enter
pris
e risk
s. As
the c
ompa
ny demer
ges
, it will fo
cus on ove
rsig
ht for how GS
K
is embedding
its ne
w approach
to
ESG performance
measurement.
Corporate Resp
onsibility Committee Chair succession
I was d
eligh
t
ed to wel
come D
r Anne B
eal
, who ha
s broug
ht
ex
tensi
ve heal
thca
re expe
rien
ce to the Bo
ard an
d our
Co
mmit
tee as a p
hysici
an and pu
blic he
alth ex
per
t, in M
ay
202
1
. Sinc
e then, A
nne an
d I have been wo
rki
ng on a smo
oth
tra
nsiti
on and ha
ndover b
efore s
he succ
eed
s me as C
ommit
tee
Cha
ir at the c
onclu
sion of t
he AGM in M
ay
. I will c
ontinu
e t
o
ser
ve a
s a Com
mitte
e memb
er to provi
de cont
inuit
y and
sup
por
t, unti
l I retir
e and step d
own fro
m the Boa
rd at the
co
nclus
ion of the d
emer
ger later t
his year. It ha
s bee
n my
pri
vile
ge to ser
ve as a m
ember o
f the Boa
rd, to ch
air thi
s
Co
mmit
tee and h
elp sha
pe and ove
rse
e, in par
ti
cular, the
devel
opmen
t and emb
eddi
ng of a fra
mework o
f a focus
ed set of
co
mmitme
nts to sup
por
t the co
mpany’s T
rust p
rior
ity a
nd our
approach as a
responsible business. Listening
carefully t
o all
the v
iews of our s
takeh
older
s has h
elpe
d to inform t
he posi
tive
step
s we have take
n in rein
forcin
g our pos
ition a
s a lea
der in
ESG.
L
ynn Elsenhans
Corporate Respon
sibility Committee Chair
28 Feb
ruar
y 2022
Science C
ommittee repor
t
Dr J
esse G
oodm
an
Science Committee
I am pl
eas
ed to pre
sent my ﬁ
fth r
epor
t of the S
cien
ce
Committee’
s
(
t
he Committee
) activities.
Key activities in 2021
Sin
ce the C
ommi
ttee’s ince
ption i
n 20
1
7
, we have cont
inued
to reﬁ
ne our fo
cus to prov
ide gre
ater valu
e to the Boa
rd’s
deliberations. In particular
,
the Committee has
focused on
ens
uring th
e validi
ty of t
he key scie
ntiﬁ
c ass
umptio
ns whic
h
dri
ve the co
mpany’s R&
D strateg
y
, as well a
s prov
iding
technical assurance, particularly in relation
to
pot
ential
transac
tions.
Pipeline progr
ess
At the s
tar
t of the ye
ar the C
ommi
ttee cl
osel
y reviewe
d the
202
1 objectives for the
biopharma business, including those
relating
to
pipeline pr
ogression. Delivering a
pipeline
to
help
pati
ents is at t
he hea
rt of w
hat GS
K does a
nd the C
ommi
ttee
monitors it
s progression closely
,
both
in t
erms of st
rategy
and
per
formance. The Committee has held
a number o
f discussions
wit
h Dr Ha
l Barr
on, our C
SO, an
d with R&
D lead
ers thr
ougho
ut
the ye
ar and h
as bee
n enco
urage
d with th
e progr
ess m
ade as
we approach
separation.
Sin
ce the s
epar
ation wa
s annou
nced i
n 20
1
8
, R&D’s str
ategy
ha
s delive
red a st
rong pip
eline o
f ass
ets wit
h the potent
ial to
bring transformational vaccines and medicines to
patients.
Som
e of the mo
st nota
ble ap
provals i
n the la
st year i
nclud
e
:
–
Jemperli
(dost
arlim
ab
) – for the t
reatme
nt of end
ometr
ial
cancer
, the
most common f
emale reproductiv
e cancer
.
This is
ano
ther ma
jor mile
stone fo
r GSK
’
s onc
olog
y pipel
ine and h
as
the p
otentia
l to trans
form th
e lives of wo
men wh
o previo
usly
had li
mited tr
eatme
nt optio
ns.
–
Cabenuva
(
cabotegravir
, rilpivirine)
– the ﬁrst long-acting
inj
ecta
ble tre
atment f
or HI
V
.
Cab
en
uva
has the potential to
tra
nsfor
m HI
V care f
or patie
nts by red
ucing t
reatme
nt dos
ing
days fr
om 365 to 1
2 per yea
r
. In add
ition
,
Apretude
received
FDA ap
proval in D
ece
mber 2021 as the ﬁ
rst l
ong-ac
ting
injectable option
for HIV prev
ention.
In N
ovembe
r 202
1
, th
e comp
any anno
unced p
osit
ive pha
se II
I
data f
or daprodusta
t, a po
ten
tial ne
w oral
treatmen
t for
patien
ts
wit
h anaem
ia of chr
onic k
idney di
sea
se.
COVI
D
-1
9
Reg
ardin
g our pip
eline of C
OVI
D-
1
9 so
lutio
ns,
Xev
udy
(
sotr
ovima
b
), a m
onocl
onal a
ntibod
y develo
ped in c
ollab
orati
on
wit
h Vir Bi
otechn
ology, was a
pproved i
n Europ
e and re
ceive
d
Eme
rgen
cy Use Aut
horis
ation i
n the US a
s a treatm
ent for
pati
ents wi
th COVI
D
-
1
9
. Studie
s show that
Xe
vud
y
also retain
s
act
ivit
y agai
nst the O
micr
on vari
ant. I
n terms of va
ccin
es, G
SK
ha
s annou
nced p
ositi
ve phas
e II
I res
ults for t
he plan
t
-ba
sed
COV
ID
-
1
9 vacci
ne can
didate be
ing devel
oped w
ith Me
dica
go.
Thi
s vacci
ne, C
ovifen
z, was a
pproved i
n Cana
da in Feb
ruar
y
2022. In F
ebr
uar
y 2022, we als
o announ
ced th
e intenti
on to
se
ek regu
lator
y autho
risa
tion for th
e COVI
D-
1
9 va
ccine b
eing
devel
oped w
ith San
oﬁ, ba
sed o
n data fr
om both b
ooster
and p
hase I
I
I ef
ﬁcac
y trial
s.
Our Board committee r
eports
continued
10
6
GS
K Ann
ual R
epor
t 2021
In F
ebru
ar
y 202
1
, we a
lso rep
or
ted a col
labor
ation w
ith
Cur
e
V
ac to joint
ly develo
p nex
t gener
ation m
RNA v
accin
es for
COVID
-
1
9 wit
h the
pot
ential
to
address emergin
g varian
ts.
Scientiﬁc deep-dives
Innova
tion remains
a k
ey
priority for GSK
.
Therefore, t
he
Co
mmit
tee ha
s conti
nued to me
et with th
e CSO a
nd our
ta
lented R&
D lead
ers
hip to unde
rt
ake dee
p-di
ves into so
me of
the exc
iting a
nd com
plex are
as of s
cienc
e that ar
e of stra
tegic
impor
tance to
GSK
, including
:
–
Immunology
–
Onc
olog
y with a fo
cus on Sy
ntheti
c Letha
lity
–
V
acc
ines m
RNA S
trateg
y
Th
e scien
ce of the i
mmune sy
stem is a key pi
llar of o
ur R&D
str
ategy. It wil
l be lever
aged to deve
lop novel t
herap
euti
cs
as we
ll as pote
ntial
ly revolu
tionis
e drug di
scove
ry a
nd
devel
opmen
t. GS
K’s par
tner
ship w
ith 23a
ndM
e provid
es the
co
mpany wi
th exclus
ive ins
ights in t
his ﬁel
d whic
h repr
esent
s
an en
ormo
us oppo
rtu
nity f
or R&D to bui
ld on a str
ong exi
sting
por
tfolio.
The Committee was pleased to see ho
w immunology
ha
s alre
ady bee
n embe
dded a
cros
s GSK R&
D, incl
uding w
ithin
oncology,
vaccines, ViiV and infectious disease
s.
Business development
In a
dditio
n to oversi
ght of the c
ompa
ny’s organ
ic R&D
inn
ovation, t
he Com
mit
tee has c
ontinu
ed to revi
ew potenti
al
bus
ines
s develo
pment tr
ans
actio
ns. Th
e Com
mitte
e rec
eives
regular pre
views
of
poten
tial bus
iness dev
elopment
oppor
t
unities being e
xplored and undertakes in-depth t
echnical
revi
ews of tra
nsac
tions p
rior to th
eir pre
sent
ation to the B
oar
d.
Th
ese tr
ansac
tions h
ave added n
ew progr
amme
s whic
h aim to
differentiate
GSK’s pipelin
e from compet
itors and
support
org
anic deve
lopm
ent wit
hin the c
ompany.
Key tra
nsac
tions r
eviewed by th
e Com
mitte
e durin
g the
yea
r inclu
de:
i
Te
o
s
:
The c
olla
borati
on wit
h iT
e
os to co-
develo
p an anti
-
T
IGI
T
monoclonal anti
body
. With
this collaborat
ion GSK is w
ell-
positioned t
o produce n
ext-generation
immuno-oncology
the
rapi
es, e
spec
ially t
hose t
arget
ing the C
D2
26 a
xis
.
Ale
cto
r:
The c
olla
borat
ion to devel
op two p
otentia
l ﬁrst-i
n-cla
ss
mon
oclon
al anti
bodie
s for a ra
nge of ne
urode
gener
ative
disease
s
including Parkinson’
s disease and Alzheimer’s
disease.
Arrowhead Pharmaceut
icals:
The
exclusiv
e l
icence
agreement with Arrowhead Pharmaceuticals, under which GSK
will de
velop an
d commercialise Arrowhead’
s
inv
estigational
RN
Ai the
rape
utic be
ing devel
oped a
s a trea
tment fo
r patien
ts
with chronic
liver
disease.
Halozyme T
herapeutics:
The g
lobal collaboration and l
icense
agreement
between
ViiV Healthcare
and Halozyme,
grantin
g
exclu
sive ac
ces
s to Halo
zym
e
’s ENH
ANZE d
rug del
iver
y
technology t
o enable de
velopment
of ultra
long-acting
med
icine
s for H
IV
.
Shionogi:
The ex
clusive
license a
greement be
tween ViiV
Healthcare and Shionogi
to
devel
op a t
hird-generation
HIV
integ
ras
e inhibi
tor with p
otentia
l for use i
n ultra l
ong-a
cting
HI
V
regimens
.
Enhanced R&D governance
The Committee has been
particularly impressed with
devel
opmen
ts in R&D g
overna
nce si
nce Dr B
arro
n was
app
ointed i
n 20
1
8
. Duri
ng 202
1
, Vacc
ines a
nd Pha
rma R&
D
were ful
ly unit
ed int
o a
single
organisation. This
has enabled
R&D to b
e more ef
fe
ctive, n
ot just i
n t
er
ms of ef
ﬁci
encie
s but
also in
the
sharing
of t
echnical
and scie
ntiﬁc e
xpertise.
Th
e beneﬁ
ts of the
se gover
nanc
e enha
nceme
nts have alr
eady
be
come ap
pare
nt with i
mprovem
ents ma
de in both c
ycle tim
es
acr
oss cl
inic
al develo
pment a
nd the pr
obabi
lit
y of succ
ess f
rom
pivotal
stud
ies.
Thr
ee and a h
alf yea
rs ago
, manag
ement s
et out a new
approach t
o R&D.
Under Dr
Barron’
s
leadership our p
ipeline in
202
1 sta
nds ou
t as havin
g advan
ced not
ably. Dur
ing 2022, the
Co
mmit
tee wil
l empha
sis
e the nee
d to contin
ue this mo
mentum
up to an
d beyond se
parat
ion.
Board and Committee c
hanges
We welco
med Dr H
al Di
etz to the C
omm
ittee o
n 1 Janu
ar
y
2022. Hi
s exper
ienc
e in the ﬁe
ld of hum
an gene
tics w
ill add
sig
niﬁc
ant val
ue to the C
ommit
tee’s discu
ssio
ns. H
is
app
ointm
ent als
o mean
s that the C
ommi
ttee is ve
ry we
ll-
rou
nded in th
e area
s of exp
er
tise re
quire
d to evaluate GS
K’s
str
ategy, pipel
ine and p
otentia
l busin
ess d
evelopm
ent ta
rgets
.
Jud
y Lewent l
eft t
he Com
mit
tee upon h
er retir
ement f
rom
the B
oard af
ter th
e 202
1 A
GM
. Cha
rle
s Bancr
oft j
oined t
he
Co
mmit
tee in M
ay 202
1 until Fe
brua
ry 2022 fol
lowing t
he
appointmen
t of
Dr Dietz.
Th
e Comm
itte
e par
ticip
ated in th
e CSO s
ucce
ssi
on plan
ning
and wa
s full
y suppo
rti
ve of T
o
ny W
ood's ap
point
ment. We are
ple
ase
d that Dr B
arro
n will jo
in the C
ommit
tee in Au
gust w
hen
he tr
ansit
ions to a No
n-E
xec
utive Di
recto
r
.
Dr J
esse G
oodm
an
Science Committee Chair
28 Feb
ruar
y 2022
Our Board committee r
eports
continued
GS
K Ann
ual R
epor
t 2021
107
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Nominations & Corporate Gover
nance
Co
mmitte
e repor
t
Jonathan Symonds
No
minatio
ns & Co
rpor
ate Govern
ance C
ommi
ttee
I am pl
eas
ed to pre
sent my thi
rd rep
or
t as Cha
ir of the
No
minatio
ns & Co
rpor
ate Govern
ance C
ommi
ttee (the
C
o
m
m
i
t
te
e)
.
Key activities in 2021
Th
e Comm
itte
e played an i
mpor
ta
nt role in d
eliver
ing our key
pri
orit
ies to tra
nsfor
m GSK a
nd sep
arate the C
H busi
nes
s. Th
e
Co
mmit
tee met 1
3 time
s duri
ng the yea
r and thi
s repor
t se
ts out
our wo
rk duri
ng 202
1
.
Key priorities
Status
Succession planning for the CS
O and his
R&D Leadership T
eam
CS
O succession candidate
identiﬁed and subsequently
appointed CS
O Designate
Ap
poi
nt a Cha
ir of th
e Cor
por
ate
Responsibility Committee to
succeed
Lynn
Elsenhans
Dr A
nne B
eal j
oine
d the B
oard
in M
ay 2021
Appoint a
third
Scientiﬁc
& Medical Expert
(S
ME
)
Dr H
al Di
et
z join
ed the B
oar
d
in J
anua
ry 2
022
Design target GSK
Board composition
and recruit
high calibre
Non-Executives to
complete t
he new
GSK biopharma Board
T
arget GSK Board composition
agr
eed a
nd se
arc
h for new
Non-E
xecutiv
e Directors
for
GS
K in pr
ogre
ss
Ap
poi
nt the H
ale
on CEO a
nd as
sem
ble
an appropriately
seasoned management
tea
m
Appoint a Chair
for
Haleon and support
the composition o
f the
Haleon Board
Brian McNamara appoint
ed as
Ha
leo
n CEO De
sig
nate in J
uly
202
1
. Haleon Management
T
eam announced in
December
20
21
Sir Da
ve
Lewis
appoint
ed
Ha
leo
n Cha
ir De
sign
ate in
December 202
1.
Selection o
f
the remai
ning
Haleon Board
in
progress
Shaping the G
S
K Boar
d for the futur
e
Management succession planning
Th
e Comm
itte
e, with a
ll Non-
E
xecuti
ve Dir
ector
s pres
ent,
continuously
asses
s
the succession plans f
or managemen
t and
the ot
her E
xecut
ive Dir
ector
s to ensur
e we have appr
opriate
suc
ces
sion p
lans a
nd a diver
se pip
eline o
f potenti
al suc
ces
sors
in place.
Dur
ing 2021
, gi
ven the im
por
tan
ce of the C
SO an
d leade
rshi
p
of R&
D, the Co
mmit
tee, in c
ollab
orati
on with t
he CEO, and a
s
app
ropr
iate the C
SO, intens
iﬁe
d our pla
nning to id
entif
y a
poten
tial CSO succession candidat
e.
The Committee w
as
sup
por
ted by the C
hief Peo
ple O
fﬁ
cer (CP
O
) and th
e Scie
nce
Commit
t
ee. The Committee follo
wed a
comprehensive process
before making a
recommendation
as described below
.
This is
repl
ica
t
ed
in
assess
ing
su
ccessi
on
cand
id
at
es.
Th
e Comm
itte
e and the S
cienc
e Com
mit
tee review
ed a diver
se
lon
g list of i
nterna
l and ex
terna
l potenti
al suc
ces
sor c
andid
ates
fro
m whic
h a shor
t lis
t of cand
idates wa
s com
piled
. The
se were
inter
vi
ewed by Sc
ience C
omm
ittee m
embe
rs, t
he Chai
r
, CEO,
CP
O and C
SO. Th
e Comm
itte
e was joi
ned by all t
he Non-
E
xecut
ive Dir
ector
s to review th
e ﬁnal c
andi
dates
. Follow
ing this
ex
tensi
ve proc
ess
, the No
n-E
xecu
tive Di
rector
s agre
ed to
ide
ntif
y Dr T
ony W
ood a
s the C
SO’s succ
ess
or
.
Th
e CPO, C
EO
, C
SO and D
r W
ood the
n est
ablis
hed a
tra
nsiti
on pla
n which wa
s app
roved by the C
ommi
ttee to e
nsure
a smo
oth tra
nsiti
on shou
ld it bec
ome ne
ces
sar
y.
In J
anuar
y 2022, th
e Boar
d activa
ted the suc
ces
sio
n plan
foll
owing D
r Barr
on’
s deci
sion to ac
cept t
he pos
ition of C
EO
and C
o-
Cha
ir of Alto
s Lab
s from Au
gust 2022. S
ince D
r W
ood
ha
s been a key p
ar
tner to Dr B
arro
n in deli
vering G
SK
’
s R&D
approach, and has
wide experience and
expertise across
sci
ence d
ata and n
ew techno
logie
s, he i
s per
fec
tly pla
ced to
buil
d on Dr B
arron’s outs
tand
ing pro
gres
s and to del
iver val
ue
from the
pipeline. The
Board theref
ore agreed t
o appoi
nt Dr
T
o
ny W
ood a
s CSO D
esig
nate and he w
ill suc
cee
d Dr Bar
ron
as C
SO an
d beco
me a memb
er of the G
L
T o
n 1 Augus
t 2022.
Fur
the
r detai
ls of his b
ackgrou
nd can b
e found o
n page 5 an
d
in th
e compa
ny's ann
ounce
ment is
sued o
n 1
9 J
anuar
y 2022
which is a
vailable
on gsk.com.
Th
e Comm
itte
e also re
comm
ende
d as par
t of th
e CSO
transition plan
that
Dr Barron be appoin
ted a
Non-Independent
No
n-E
xecu
tive Dir
ector a
nd memb
er of the S
cien
ce Co
mmit
tee
wit
h eff
ect fr
om 1 Augus
t 2022, initi
ally fo
r a three
-year te
rm.
Thi
s would su
ppor
t the C
SO tr
ansit
ion pro
ces
s.
Corporate Resp
onsibility Committee Chair
In my 2020 r
epor
t, I de
scr
ibed th
e sear
ch for Lynn’s succ
ess
or
as C
hair of t
he Cor
por
ate Respo
nsibi
lit
y Comm
itte
e (
CRC).
Thi
s resu
lted in D
r Anne B
eal’s app
ointme
nt to the Bo
ard on
6 May. Ann
e has br
ought ex
tens
ive hea
lthc
are exp
erie
nce a
s a
physician
and en
trepreneur
, combined with
a passion f
or pa
tient
advo
cacy. Fur
ther d
etai
ls of her ex
peri
ence a
nd the rat
ional
e for
her appoin
tment
are includ
ed in t
he compan
y’
s an
nouncement
on 6 A
pril 2021 whic
h is availa
ble on gs
k.c
om. A tr
ansi
tion
pro
ces
s is unde
rw
a
y to ena
ble An
ne to succ
eed Lynn a
s CRC
Cha
ir at the c
lose of th
e 2022 A
GM
. De
spite s
erv
ing for ove
r
nine ye
ars
, Lynn’
s expe
rien
ce as a C
EO and fro
m sit
ting on
othe
r boar
ds mea
ns that sh
e conti
nues to de
monst
rate all th
e
cha
racte
risti
cs of in
depe
ndenc
e expe
cted by the B
oard i
n
ca
rr
ying ou
t her rol
e on the B
oard
.
Thir
d Scientiﬁc Medical Expert (S
M
E)
I am pl
eas
ed to con
ﬁrm th
at the sea
rch for a t
hird S
ME wa
s
success
fu
lly concluded. W
e continued t
o ﬁne-t
une th
e
sel
ecti
on cri
t
eri
a as the p
roce
ss evol
ved and c
onsid
ered th
e
following
:
–
An o
utloo
k on the fut
ure dire
ctio
n of R&D, in
novation a
nd the
tre
atment a
nd mana
geme
nt of huma
n heal
th
–
Experience of people
leadership
and man
agement
at
‘scale
’
,
eit
her in an a
cade
mic or in
dustr
y set
ting
–
Inte
reste
d in, an
d having a de
ep unde
rst
andin
g of, a brea
dth
of scient
iﬁc and t
herapeutic areas, particularly in
immunology
as we
ll as ge
nomic
s and ge
netic
s. H
aving pe
rspe
ctive
s on
the a
bilit
y to harn
ess d
igita
l techno
logie
s (incl
uding A
rt
iﬁci
al
Inte
llige
nce
) to enha
nce th
e rese
arch a
nd develo
pment o
f
new medicines and
–
Able to
deliver
complex science t
o a
broad a
udience. Highly
co
llabo
rative a
nd a willi
ngne
ss to enga
ge proa
ctive
ly on
topi
cs beyon
d their ow
n imme
diate rea
lm of exp
er
tise
Our Board committee r
eports
continued
10
8
GS
K Ann
ual R
epor
t 2021
Our Board committee r
eports
continued
The Committee was pleased to recommend the
appointment
of Dr H
al Di
etz to th
e Boar
d with ef
fec
t from 1 J
anuar
y 2022.
Dr D
iet
z bring
s his ex
tensi
ve exper
ienc
e in the ﬁ
eld of hum
an
gen
etic
s, whi
ch is ce
ntral to G
SK
’
s appr
oach to R&
D and wil
l
add f
ur
ther str
ength to th
e Scie
nce C
ommit
tee an
d Boar
d
dis
cuss
ions
. Fur
ther de
tail
s of Hal’s exp
erie
nce an
d the rati
onale
for h
is appoin
tment ar
e included
in t
he compan
y’
s ann
ouncement
on 27 Octo
ber 202
1
, whic
h is availa
ble on gs
k.c
om.
T
ransition to a new G
S
K Boar
d
In p
lanni
ng the str
uctur
e of the new G
SK Bo
ard as a
n
independent biopharma company
, the Commit
t
ee
co
mmis
sione
d Korn Fe
rr
y to meet wi
th each B
oar
d membe
r to
gath
er thei
r views on t
he optim
al Boa
rd des
ign for th
e futur
e.
Fur
the
r detai
ls on thi
s proc
ess ar
e given o
n page 1
03
. A skil
ls
matr
ix was d
evelope
d whic
h mapp
ed curr
ent Bo
ard me
mber
s’
sk
ills an
d cap
abilit
ies an
d the suc
ces
sion p
lanni
ng need
s for
the B
oard
. This wa
s disc
usse
d with a
ll Non-
E
xecuti
ve Dire
ctor
s
and t
he key cap
abili
ties wer
e fur
ther r
eﬁne
d and a ﬁn
al tar
get
sk
ills mat
rix wa
s agree
d. The C
omm
itte
e then agr
eed the b
rief
s
to init
iate the se
arch f
or thre
e new Non-
E
xecuti
ve Dire
ctors to
be ap
pointe
d to the Boa
rd in the n
ext 1
2 to 1
8 m
onths
. The
Co
mmit
tee is fol
lowing i
ts sea
rch pr
oces
s to rec
ruit for t
hese
rol
es. L
ong lis
ts of ca
ndidate
s for both r
oles h
ave been
considered.
Haleon Board appointments
The Committee appoint
ed a su
b-C
ommittee
comprising,
the C
hair, Vindi B
anga
, Da
me Viv
ienne C
ox, D
r Bea
l and
Mr R
ohner, to progr
ess H
aleo
n Boar
d appo
intme
nts. I
t then
reported progress at each
scheduled Committee meeti
ng.
Final decisions w
ere reached b
y th
e Committee with al
l
Non-E
x
ecutive
Directors i
nvit
ed t
o participat
e.
Ha
leon C
EO and CF
O:
The C
ommi
ttee c
onduc
ted an
ex
tensi
ve globa
l sear
ch and s
elec
tion pr
oces
s to appo
int the
Ha
leon C
EO and CF
O des
ignates
. Thi
s work foll
owed the
Commit
t
ee’
s sea
rch
process
.
In particular,
the CE
O role proﬁle
contained th
e ke
y select
ion crit
eria and
responsibilit
ies the
successful candidat
e
woul
d need
to
fulﬁl m
ost especially
after
the demerger
. The
se
emphasised the importanc
e
of
es
tabli
shing t
he new Ha
leon B
oard to de
liver th
e grow
th
str
ategy an
d to drive si
gniﬁ
cant s
hare
holde
r value
. This wou
ld
require a
relentless focus
on inno
va
tion, promot
ing a
high
per
fo
rmanc
e and in
clusi
ve cultur
e whil
st also o
pera
ting to the
exac
ting st
anda
rds of c
orpo
rate gover
nanc
e.
Fol
lowing i
nter
views by B
oard m
ember
s with i
nterna
l and
ex
terna
l cand
idates
, the Bo
ard wa
s plea
sed to en
dors
e the
Committee’
s recommenda
tion t
o appoint
Brian McNamara as
Ha
leon C
EO Desi
gnate. T
he Boa
rd noted in p
ar
ticul
ar Bri
an’
s
str
ong tra
ck rec
ord of su
cce
ss in bui
lding th
e CH bus
ines
s and
his considerable e
xperience of FMCG and consumer health.
Thi
s mean
t that he wa
s uniqu
ely sui
ted and th
e right c
hoice to
unl
ock the gr
owt
h potenti
al of Ha
leon a
s an inde
pend
ent lis
t
ed
co
mpany. Fur
ther de
tail
s of Bri
an’
s expe
rienc
e and th
e
rati
onal
e for his ap
point
ment ar
e inclu
ded in th
e comp
any’s
ann
ounce
ment on 22 J
uly 202
1
, whic
h is availa
ble on gs
k.c
om.
Th
e Comm
itte
e reviewe
d Bria
n
’s propo
sed le
ader
ship te
am for
Ha
leon (i
n par
ticul
ar the pr
opos
ed CF
O and Chi
ef Peop
le
Of
ﬁ
cer) whic
h was ann
ounce
d in Dec
embe
r 202
1
. F
ollowi
ng
ex
tensi
ve intern
al and ex
tern
al sea
rche
s for eac
h role
,
sho
rtl
isted c
andi
dates wer
e inter
viewe
d by the rel
evant pan
el of
No
n-E
xecu
tive Dir
ector
s agai
nst the ag
reed r
ole cr
iteria
. Th
e
Co
mmit
tee the
n approve
d the ﬁna
l appo
intees
. The H
aleo
n
man
ageme
nt team wa
s then in
trodu
ced to inve
stors at th
e CH
Ca
pita
l Mar
kets Day on 28 Fe
brua
ry 2022
.
Ha
leon Ch
air:
Th
e Com
mit
t
ee fo
llowed it
s sear
ch pro
ces
s to
sel
ect th
e Hale
on Cha
ir
. This s
earc
h focus
ed on ca
ndid
ates
with the f
ollowing
knowledge, experience and commitment
:
–
Signiﬁcant li
sted
Board e
xperience wit
h an
understanding
of
inves
tors
, anal
ysts
, banks
, regu
lators a
nd gover
nments
–
A hig
h degre
e of ﬁna
ncial a
cumen a
nd suc
ces
sful bu
sine
ss
tra
ck rec
ord in c
reatin
g shar
ehold
er value a
nd growi
ng
businesse
s
–
A str
ong emp
hasi
s on coa
ching s
kill
s and the a
bilit
y to crea
t
e
a high-performance environment
–
De
ep expe
rien
ce of co
nsume
r facing b
usine
sse
s, wi
th a high
degree of
customer
-centricity
. Int
ernational
experience,
pre
ferab
ly in the U
S and Ch
ina
–
Stro
ng str
ategic sk
ills a
nd a trac
k reco
rd of inn
ovative
thin
king
, coac
hing an
d develop
ment
–
Be we
ll res
pected a
nd have hig
h credi
bilit
y with a
ll
stakeholders, inclu
ding i
nv
estors, capital mark
et participants,
reg
ulator
s and gover
nment
s
–
Have hi
gh integr
ity, str
ong valu
es and b
e drive
n by a strong
sense of
purpose
–
Und
ers
tand th
e role of a C
hair of a F
T
SE 1
00
–
Pos
ses
sion of h
umilit
y and a s
ubdue
d ego an
d a stron
g
emo
tiona
l commi
tment a
nd pas
sion f
or the CH b
usine
ss
–
Be c
ommi
tted to di
vers
ity in a
ll its fo
rms, r
esil
ient an
d open-
min
ded wit
h stron
g judge
ment a
s well as a na
tural te
am buil
der
Th
e Comm
itte
e agree
d that Sir D
ave Lewis
, a highl
y
experienced
and respect
ed gl
obal busi
ness leader
in cons
umer
goo
ds and r
etail
, was the m
ost sui
tabl
e can
didate to le
ad the
Ha
leon B
oard
. It was n
oted that at th
e time of hi
s sele
ction h
e
was d
eeme
d to meet the i
ndep
enden
ce req
uirem
ents of th
e
Code. The Committee’
s
recommendation w
as subsequently
end
orse
d by the ful
l Boar
d. Fur
ther d
etai
ls of Sir D
a
ve’
s
exp
erie
nce and t
he rati
onale fo
r his app
ointm
ent are i
nclud
ed in
the c
ompa
ny’
s anno
unce
ment on 20 D
ecem
ber 2021
, w
hich is
avai
lable on gsk.com.
Sir D
ave is now pro
gres
sing th
e sear
ch for hi
gh cal
ibre no
n-
exec
utive dir
ector
s to build t
he Hal
eon Bo
ard. T
o ensur
e
co
ntinuit
y
, it is ex
pec
ted that t
wo Non-
E
xecuti
ve memb
ers of
the G
SK Bo
ard wil
l trans
fer to the H
aleo
n Boar
d on com
pleti
on
of the d
emer
ger
. The c
ompa
ny’s CH join
t venture p
ar
tner
(P
ﬁze
r
) has the r
ight to ap
point u
p to two No
n-E
xecu
tive
Dir
ector
s. T
he new Ha
leon B
oard w
ill be an
nounc
ed publ
icly
later i
n the yea
r as par
t of de
merg
er arr
ange
ments
.
GS
K Ann
ual R
epor
t 2021
10
9
Strategic report
Governance and remuneration
Financial st
atements
Investor information
W
ays of working
Th
e Comm
itte
e seeks to fo
llow be
st pra
ctic
e in all the
appointments it
recommends, agreeing the crit
eria for each
role,
the most
appropriate
int
ervi
e
w panel,
before t
hen considering a
co
mpreh
ensive a
nd dive
rse lo
ng list o
f cand
idates
. Shor
tli
sted
candidat
es are
int
erviewed and
assessed against
the
chosen
cri
teria
. Due d
ilige
nce is th
en unde
rt
aken be
fore the C
omm
ittee
makes its
ﬁnal recommendation.
Executive search ﬁrms are
appoint
ed in
accordance with
the compan
y’
s pr
ocurement
pol
icy ba
sed on th
eir exp
er
tise re
lative to e
ach rol
e. The
Committee has agreed tha
t only
search ﬁrms who w
ere
sig
natorie
s to the Volunta
ry C
ode o
f Cond
uct of E
xecu
tive
Se
arch F
irms o
n gende
r diver
sit
y and be
st pra
ctic
e would
be engaged.
Th
e Comm
itte
e worked wi
th a numb
er of exec
utive se
arch ﬁ
rms
in 2021 who pr
ovided a
dditi
onal c
onsult
ancy s
er
vice
s to the
co
mpany a
s outlin
ed bel
ow:
–
Kor
n Ferr
y: ge
nera
l recr
uitme
nt, exec
utive se
arch a
nd
asses
sment
servic
es, coaching
and o
ther HR-rela
ted
serv
ices
–
Egon Zehnder
: ex
ecutive
search, assess
men
t and
coaching
ser
vi
ces to s
peci
ﬁc sen
ior exec
utive
s
–
He
idric
k & Strug
gles: exec
utive s
earc
h ser
vic
es
–
Spencer St
uart: e
xecut
ive
search and
assessment services
Th
e Comm
itte
e reviewe
d the potent
ial for c
onﬂi
cts of in
teres
t
and judged
that t
here w
ere appropriat
e safeguards
against
such conﬂicts.
Our Board committee r
eports
continued
Board Committee Chair and GL
T membership changes
Dur
ing the ye
ar and u
p to the date of thi
s repo
rt
, the Co
mmit
tee app
roved the fo
llowi
ng chan
ges to the m
ember
ship o
f our Boa
rd
co
mmit
tees an
d GL
T
.
Director
Membership
Appointment date
Retirement date
Charles Bancroft
Chair of Audit & Risk Committee Chair
Member of Nominations & Corporate Governance, and Science committees
9 March 2021
6 May 2021
8 February 2022
(stepped down
from Science
Committee after
Dr Hal Dietz joined
the Committee)
Dr A
nne B
eal
Member of
Corporate
Responsibil
ity and
Audit &
Risk committees
6 Ma
y 202
1
23 Ju
ly 2021
Dr H
al Di
et
z
Member of
Science Committee
1 Ja
nuar
y 2022
Judy Lew
ent
C
hair o
f Audi
t & Ris
k Co
mmit
tee C
hair
Member of A
udit &
Risk, Nominations
& Corporate
Gov
ernance, Remunerat
ion,
Science and
T
ransfo
rmation &
Separation
committees
9 Ma
rch 20
2
1
5 Ma
y 202
1
Lynn
Elsenhans
Chair of
Corporate Responsibility Committee
Me
mbe
r of Aud
it & Ri
sk
, Cor
por
ate Res
pon
sibi
lit
y and N
omin
atio
ns & Co
rpo
rate
Governance committees
4 Ma
y 2022
Af
ter C
H
Demerger
Dr A
nne B
eal
Cha
ir
of
Corporate Responsibility Committee
4 Ma
y 2022
Shobie Ramakrishnan
Ch
ief D
igit
al an
d T
e
chn
olog
y Of
ﬁc
er an
d memb
er of G
L
T
1
6 De
cemb
er 2021
Board composition, tenure and diversity
Th
e Boar
d seek
s t
o bal
ance i
ts com
posi
tion an
d t
enu
re and
that o
f its Co
mmit
tees
, and to ref
resh t
hem over ti
me. Thi
s
ena
bles t
he Boa
rd to bene
ﬁt fro
m the exp
erien
ce of lo
nger-
ser
vi
ng Dir
ector
s and the f
resh p
ers
pecti
ves and i
nsigh
ts from
newer a
ppoi
ntees
. Our No
n-E
xecu
tive Di
rector
s are dr
awn fro
m
a wide range of industries and back
grounds, including the
pharmaceuticals industr
y
and R&D,
vaccines, consumer
products an
d healthcare, m
edical research and
academia,
ins
uranc
e and ﬁ
nanci
al ser
vi
ces
. Col
lecti
vely they h
ave a
wea
lth of exp
erie
nce of c
omple
x organ
isati
ons wit
h globa
l
re
ach. M
any of our B
oard m
embe
rs als
o have expe
rienc
e of
lon
ger-cycl
e indus
trie
s, whi
ch is of gr
eat as
sis
tanc
e in
understanding our sector
.
We are co
mmit
ted to the di
versi
ty of ou
r Boar
droom
, just a
s
GS
K is com
mit
ted to equa
l oppor
tun
ities f
or all em
ployee
s
at all l
evels of ou
r organ
isati
on. Th
e Boar
d and ma
nagem
ent
se
ek to enco
urage a d
ivers
e and inc
lusi
ve cultur
e throug
hout
the c
ompa
ny
. An ef
fect
ive Boa
rd nee
ds a rang
e and ba
lanc
e
of skills, e
xperience, knowledge,
ethnicity
,
gender
, social-
economic backgrounds and independence, with individuals
who are prepared
to
challenge each
other
and work
co
llabo
rative
ly
. Thi
s mix nee
ds to be co
mple
mented by a
dive
rsit
y of pe
rson
al att
ribute
s, inc
ludin
g char
acter, intelle
ct,
judgement, honesty and courage.
11
0
GS
K Ann
ual R
epor
t 2021
Board and GL
T diversity targets
The Committee is responsible
for de
velopin
g measurable
obj
ective
s and mo
nitori
ng prog
res
s towards th
eir ach
ievemen
t
to as
sist t
he impl
ement
ation of t
he Boa
rd’s diver
sit
y policy,
inc
luding g
ende
r and ethn
ic diver
sit
y
. Our p
rogre
ss aga
inst
the
se tar
gets is s
et out be
low. For con
siste
ncy
, the di
versi
ty
metr
ics a
s at 1 Janu
ar
y 2022 are show
n in line w
ith our g
ender
dive
rsit
y sub
miss
ion to the F
TS
E W
ome
n Lead
ers Rev
iew
(
the Rev
iew
).
Progr
ess achieved
Diversity objectives
Status
P
erformance
At least 33% of Board positions
held by women
Exceed
objective
38.4%
At le
as
t 33% of G
L
T pos
iti
ons
held by
women
Met objective
3
5
.7%
At le
as
t 33% of c
omb
ined G
L
T
and direct
report positions held
by w
omen
Exceed
objective
42
.5
%
At le
as
t one Bo
ard D
ire
ctor i
s
ethnicall
y
diverse
Exceed
objective
Tw
o
D
i
r
e
c
t
o
r
s
The Committee is particularly int
ent on
increasing gender
and,
especially
, ethn
ically diverse representat
ion on
the Board and
GLT
, an
d fur
ther deve
lopin
g the pip
eline of d
irec
t repor
ts to th
e
GLT from eth
nica
lly dive
rse ba
ckgrou
nds.
Th
e Comm
itte
e is supp
or
tive of the n
ew gende
r diver
sit
y targ
ets
in th
e Review pu
blish
ed in late Fe
brua
ry 2022
, inclu
ding 40
%
wome
n on boa
rds by 2025. I
t has be
en ple
ase
d that for m
any
years the Board’
s
gender representa
tion target
has been
comforta
bly
exceeded an
d normally o
ver
40% of Board
positions
have be
en held by wo
men. We are i
n a tran
sitio
nal per
iod a
s the
co
mpany se
parate
s and the C
H bus
ines
s is deme
rged
. The
Co
mmit
tee is wor
kin
g t
o tra
nsiti
on to the ta
rget B
oard pr
oﬁle fo
r
the ne
w bioph
arma c
ompa
ny
. As a res
ult, th
e comp
ositi
on and
dive
rsit
y of the B
oard d
uring t
his tra
nsiti
on will i
nevit
ably be
sub
ject to ﬂu
ctuati
on. I lo
ok for
ward to c
onﬁr
ming c
omplet
ion of
this wo
rk in nex
t yea
r’s repo
rt a
nd repo
rti
ng our pr
ogre
ss aga
inst
the Rev
iew's in
crea
sed g
ender d
ivers
ity t
arge
ts.
The representation
of w
omen and e
thnically div
erse leaders is
cove
red on pa
ge 3
7
, a
s par
t of the di
versi
ty of G
SK
’
s glob
al
work
for
ce. P
rogre
ss aga
inst ou
r inclu
sion a
nd diver
sit
y
co
mmitme
nts, i
nclud
ing gen
der and e
thnici
ty, is illu
strated i
n
our ESG
Performance Repor
t
on gsk.com.
Sir Jonathan Symonds
No
minatio
ns & Co
rpor
ate Govern
ance C
ommi
ttee C
hair
28 Feb
ruar
y 2022
Our Board committee r
eports
continued
T
rans
f
ormation & Separat
i
on
Co
mmitte
e repor
t
Jonathan Symonds
T
ransformation & Separation
Committee
I am pl
eas
ed to pre
sent my se
cond a
nd ﬁna
l repo
rt a
s Chai
r of
the T
ransformation &
Separation
Committee (
the
Committee
)
give
n that it ha
s now ful
ﬁlle
d its pur
pose a
nd mand
ate.
Th
e Comm
itte
e was es
tabli
shed i
n May 2020 cha
rged w
ith two
principal functions
:
–
Exer
cisin
g o
vers
ight of t
he Futur
e Ready t
rans
form
ation
programme
, par
ticu
larl
y delive
ry o
f the tar
geted co
st savi
ngs
and s
epar
ation of t
he com
pany’s infr
astr
uctur
e prio
r to the
delivery team mo
ving from
project design
into
implementat
ion
and
–
Cons
ideri
ng the o
ptim
al form of se
para
tion
. This a
lso
inc
luded t
he impli
cati
ons of se
parati
on and th
e most
appropriate
listing
location f
or Haleon
Th
e Comm
itte
e was ple
ase
d that the Fu
ture Re
ady
transformation programme w
as completed t
o schedule b
y the
end o
f 202
1 and exce
eded th
e cos
t saving
s ident
iﬁed to b
e
derived from
this prog
ramme.
Dur
ing 2021
, th
e Com
mitte
e under
took a p
rogr
amme of wo
rk to
understand and consider t
he k
ey fu
ndamentals of
separation.
Thi
s was not j
ust the te
chnic
al req
uirem
ents
. It con
side
red how
to
best unlock, release and maximise long-t
erm shareholder
valu
e. Thi
s work was s
uppo
rted by g
uida
nce and a
dvic
e from
ex
terna
l exper
ts a
s appr
opri
ate. The C
ommi
ttee b
egan by
co
nside
ring how we s
hould s
epar
ate and the p
rinci
pal val
ue to
be achie
ve from
each opt
ion a
vailable.
Discussions then
pro
gres
sed to th
e capi
tal st
ructu
res re
quire
d for the re
sulti
ng
t
wo compa
nies to b
e comp
etitive a
s inde
pend
ent enti
ties
.
Fol
lowing a d
ecis
ion to dem
erge th
e CH bus
ines
s it was
imp
or
tant to dete
rmine h
ow to distr
ibute sh
ares i
n Hale
on to our
shareholders, and on which
exchanges
Haleon should l
ist and
why. The C
ommi
ttee a
lso co
nside
red wh
ether to re
tain a s
take
in H
aleon a
nd how bi
g a stake to re
tain
.
Thi
s was a ver
y inte
nsive an
d deta
iled pr
ogra
mme of wor
k as
the C
ommi
ttee ad
dres
sed th
ese m
ajor qu
estio
ns and th
e
imp
act for a
ll our st
akehol
ders
. It th
en rep
orte
d to the Boa
rd
accordingly on
its conclusions
and recommendat
ions.
Thi
s proc
ess i
s now well in
t
o the exe
cutio
n phas
e. Ove
rsig
ht
of the
remaining
work more
appropriat
ely rests with
the
other
spe
cial
ist Bo
ard co
mmit
tees a
nd has b
een devol
ved to them
as a
pprop
riate, o
r will be r
eviewed a
nd overs
een di
rectl
y by
the Board.
Havi
ng ful
ﬁlled i
ts mand
ate, it wa
s agree
d that the C
ommi
ttee
be decommissioned.
I woul
d like to thank B
oard c
olle
ague
s for thei
r commi
tment a
nd
dili
genc
e in supp
or
ting the C
ommi
ttee’s work i
n this re
spec
t.
Sir Jonathan Symonds
T
ransformation & Separation
Committee Chair
28 Feb
ruar
y 2022
GS
K Ann
ual R
epor
t 2021
111
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Audit & Ri
sk Commit
tee report
Charles Banc
roft
Audi
t & Ris
k Comm
itte
e
I am pl
eas
ed to pre
sent thi
s repo
rt
, whic
h is my ﬁrs
t as Ch
air of
the Au
dit & Ri
sk Co
mmit
tee (
the C
ommit
tee).
I joi
ned the C
ommi
ttee b
ack in M
ay 2020. I succ
eed
ed Judy
Lewe
nt as Ch
air in M
arch 2021 af
t
er a c
ompre
hensi
ve
tra
nsiti
on. I have be
en draw
ing on my bu
sine
ss bac
kground
,
inc
luding t
he ten yea
rs I ser
ved a
s CF
O of the ma
jor
pha
rmac
eutic
al co
mpany, Bri
stol Mye
rs Squ
ibb. In d
oing so
,
I have al
ways viewed p
eopl
e, pro
ces
ses
, systems a
nd
imp
or
tantl
y
, cultur
e as the c
ritic
al foun
datio
n for suc
ces
sfull
y
man
aging ﬁ
nanci
al rep
or
ting, au
dit and c
ompl
ianc
e risk
s. In my
tim
e ser
ving o
n this C
ommit
tee and t
hroug
h my obse
rvati
ons
mor
e gener
ally a
s a Boa
rd memb
er
, I am co
nﬁde
nt that GS
K
co
ntrols s
core h
ighly i
n all the
se are
as. I wo
uld the
refore l
ike to
sha
re my init
ial imp
res
sions o
f thes
e key aspe
cts
.
Our culture and people
GS
K has a s
trong c
ompli
ance c
ulture w
ith a con
siste
nt tone
and engagement
from t
he t
op. This
is regularly considered
and
emp
hasi
sed in C
ommi
ttee d
iscus
sio
ns, and w
e have a zero-
tolerance approach
to
any
unethical beha
viour
. Our risk
management and
int
ernal control
framework
is mat
ure and
well
embedded in the
organisation
as demonstrat
ed on
pages 46
and 1
1
2 o
f the Ann
ual Rep
or
t. Thi
s enab
les the C
ommi
ttee to
evalu
ate and over
see how G
SK ma
nages p
rinc
ipal an
d
emerging risks.
The Committee also rout
inely ex
ercises ov
ersights of
imp
rovemen
ts to our co
mplia
nce cul
ture. Ever
y
thin
g we do at
GS
K is unde
rpin
ned by havi
ng great p
eopl
e with th
e right s
kill
set
s. In
deed
, our cor
pora
te governa
nce fr
amewor
k requi
res
goo
d peop
le to make qu
alit
y deci
sions a
nd do the r
ight thi
ng.
As C
ommi
ttee C
hair, I have unfet
tered a
cce
ss to the se
nior
le
ader
ship an
d key membe
rs of th
eir team
s. Reg
ular
ly
thro
ughou
t the year, I met in
divid
ually w
ith key C
ommit
tee
attendees from
management, incl
uding t
he CFO, General
Co
unsel
, Chie
f Com
plian
ce Of
ﬁc
er
, He
ad of Audi
t &
Assurance
,
the Group
Financial Controller
, t
he Company
Secretar
y
, and external audit
or
.
Additionally
, the Committee
mem
ber
s have an opp
ort
unit
y to spea
k at the end of e
ach
mee
ting wi
th the ex
terna
l audito
r witho
ut mana
gemen
t being
pre
sent
. Cruc
iall
y
, we also have t
he abili
ty to sp
eak wi
th key
mem
ber
s of manag
ement i
n private s
ess
ions or a
lone a
s
required.
Our Board committee r
eports
continued
Our processes and systems
These are fundamental f
or appropriat
e ﬁnancial
reporting,
co
ntrols a
nd mana
ging ri
sks. We ar
e well pos
ition
ed in thi
s
re
spec
t, as th
e comp
any’s main ac
coun
ting and r
epor
tin
g
syste
ms are c
entra
lise
d into two gl
obal i
nsta
nces o
f SAP
. We
als
o have a well-
est
ablis
hed On
e Fina
nce mo
del wit
h
centralised
transaction
al and
contro
ller a
ctivities
embedded i
n
GS
K’s four re
giona
l hubs
. This f
rees u
p our in-
market ﬁ
nanc
e
people to
focus on
the core business operations
and decision
making. The Committee continues
to
exercise
regular o
versight
and monit
oring
activities
ov
er these
critical ﬁnancial
syst
ems.
Th
e integri
ty of o
ur ﬁnan
cial s
tateme
nts, in
cludi
ng the An
nual
Repor
t and
quar
t
erly results announcem
ents, is an
enduring key
foc
us of the C
ommi
ttee. S
ince j
oining t
he Boa
rd and
Co
mmit
tee, I have b
een imp
res
sed wi
th the cl
arit
y and r
igour
aro
und the
se pro
ces
ses
. The C
ommit
tee’s posi
tion ha
s always
be
en to aim for c
lear a
nd tra
nspar
ent ﬁna
ncia
l discl
osur
e in all of
GSK
's
ﬁnancial repor
ting.
As th
e previ
ous Co
mmit
tee Cha
ir high
lighted i
n her rep
or
t las
t
yea
r
, w
e have conti
nued to ens
ure that t
he com
pany’s ﬁna
ncial
repor
tin
g and controls
framework remains
robust and d
id not
require
any
fundamen
tal chan
ges. This has
been impo
rtant
de
spite the o
ngoin
g impac
t of COV
ID
-
1
9 o
n the co
mpany’s ways
of wor
king
. In add
ition
, the ex
terna
l audito
r regul
arly te
sts our
ﬁnancial s
yst
ems and
contro
ls and
challen
ges mana
gement,
and
rep
or
ts their r
esul
ts to the C
ommit
tee. T
his inc
lude
s any are
as of
deﬁciencies that t
he external aud
itor
has identiﬁed and
progress
in re
media
tion of is
sue
s, all o
f which a
re dis
cuss
ed and eva
luated
.
Key activities in 2021
Key
decisions:
As us
ual, i
t has be
en a busy ye
ar for th
e
Co
mmit
tee. N
ot only wor
kin
g throug
h its reg
ular pr
ogra
mme of
act
iviti
es, b
ut mak
ing imp
or
tant d
ecisi
ons in su
ppor
t of the
Board’
s progression of
its k
ey priorit
ies. These have
included
revi
ewing
, in supp
or
t of the Bo
ard:
–
further incremental changes t
o th
e company’
s
commercial
model in China
–
the c
ompa
ny’
s new grow
th a
mbiti
ons befo
re they wer
e
sha
red at th
e Investo
r Update i
n June 2021 and
–
the m
ove t
o a pro
gres
sive di
vide
nd poli
cy from 2022
The matters considered
and their
outcomes are
reported on
pag
es 96 an
d 9
7
.
Preparation for the demer
ger
Th
e Comm
itte
e is also a key C
H gover
nance d
elive
ry
work
stre
am. We are now i
ncre
asin
gly revi
ewing th
e techni
cal
aspects of deliv
ery of the demerger
. The Committee is
spe
ciﬁ
call
y acco
untab
le for rev
iewin
g and rec
omme
nding
to the B
oard ap
proval o
f key trans
acti
on docu
ments a
nd
related
matters.
112
GS
K Ann
ual R
epor
t 2021
The Board is u
ltimat
ely responsible f
or the
decision t
o
dem
erge
, both in re
spe
ct of the ti
ming an
d ﬁnal ter
ms of the
demerger
.
It will mak
e th
e recommendation
of t
he transaction t
o
shareholders through the
publication of
the GSK Shareholder
Circular
. The
Commit
t
ee’
s role is to
scrutinise these documents
pri
or to the Bo
ard’s revi
ew
. This p
roce
ss for b
oth the
Co
mmit
tee and t
he Boa
rd will c
ontinu
e to intensi
fy i
n the ﬁr
st
hal
f of this ye
ar as th
e forma
l point o
f sepa
ration a
ppro
aches
.
Th
e Comm
itte
e has be
en as
sisti
ng the C
H manag
ement i
n
es
tabli
shing a r
obus
t interna
l contr
ol and r
isk ma
nagem
ent
framework ready
for separa
tion. The o
verarching
principle has
be
en to repli
cate GS
K’s cur
rent inte
rnal g
overnan
ce co
ntrols
and ﬁ
nanc
e system
s and, w
here ne
ces
sar
y, adapt th
e exist
ing
framework and
process
es. The Committee is pleased that
the
CH b
usine
ss is c
urren
tly well ad
vanc
ed in set
ting u
p the
gover
nanc
e, pro
ces
ses an
d orga
nisati
ons to be ma
nagin
g all
pro
ces
ses in a ‘
busi
ness a
s usua
l’ envir
onmen
t in Q2 2022.
Internal control framework
Our Board recognises its
obligation
to
present a
fair
,
balanced
and understandable
assessment of GSK’s
current
position an
d
pro
spec
ts. Re
ﬂec
ting thi
s resp
onsib
ilit
y
, it is ac
count
able fo
r
evalu
ating an
d approv
ing the e
ffe
ctive
ness o
f GSK
’
s inter
nal
controls, including ﬁnancial, operational and compliance
controls, and risk management
processe
s.
We ensur
e the reli
abili
ty of o
ur ﬁnan
cial r
epor
ting
, and
compliance with laws and regulat
ions, through our int
ernal
control framew
ork. This is a
comprehensive
enterprise-wide risk
management model
which supports the
Board’
s contin
uous
identiﬁcation, ev
aluation
and managemen
t of
the Group
’
s
pri
ncipa
l risk
s, as r
equir
ed by the F
RC’s Co
de. Th
e fram
ework
is de
sign
ed to mana
ge the ri
sk of us not a
chievi
ng our bu
sine
ss
objectives.
A ﬁt
-for
-purpose framew
ork – complement
ed by
our corporat
e
valu
es, c
ulture
, expec
tatio
ns and S
peak U
p proc
ess
es –
ensures th
at t
he risks
associated wit
h our
business act
ivities are
act
ively a
nd ef
fecti
vely co
ntroll
ed in lin
e with our a
gree
d risk
app
etite. We bel
ieve GSK
’s fram
ework pr
ovide
s reas
onab
le, but
not ab
solu
te, as
suran
ce aga
inst ma
t
eri
al mis
state
ment or lo
ss
.
Th
e Boar
d mandate
s the Gr
oup’
s Ris
k Over
sigh
t & Comp
lianc
e
Co
uncil (R
OCC) of s
enior l
eader
s to as
sist th
e Com
mitte
e
in over
see
ing ris
k manag
ement a
nd inter
nal co
ntrol ac
tivi
ties
.
It a
lso prov
ides t
he busi
nes
s with a fr
amewor
k for ris
k
management and
upw
ard escalation of
signiﬁcant risks. Risk
Ma
nagem
ent and C
omp
lianc
e Boa
rds (R
MCB
s
) acro
ss the
Gr
oup pro
mote the ‘
tone fro
m the top’ and e
stab
lish ou
r risk
cul
ture, a
s well as e
nsuri
ng ef
fecti
ve overs
ight of inte
rnal
controls and risk
management processes
.
Ea
ch pri
ncipa
l risk h
as an a
ssig
ned ri
sk owne
r
, d
rawn fr
om
senior managemen
t, who is
accountable for
managing
his/her
pri
ncipa
l risk w
ith over
sight by a G
L
T Memb
er
, incl
uding se
ttin
g
and implement
ing risk m
itigation
plans. Risk owners report
quarterly on their
respective risk man
agement approach
and
progress at t
he ROCC and t
he appropriat
e Board Committee.
Our C
omp
lianc
e func
tion a
ssis
ts the RO
CC and R
MC
Bs
.
Compliance is responsible f
or advancin
g ent
erprise-wide risk
man
ageme
nt and for d
evelop
ing ris
k
-bas
ed and e
thica
lly sou
nd
work
ing pr
acti
ces
. It al
so acti
vely pro
motes et
hica
l behavi
ours
by ena
bling a
ll empl
oyees to op
erate in li
ne with o
ur value
s and
comply with appl
icable laws
and regula
tions.
Our Audit
& Assurance (A&
A
) function
provides in
dependent
as
sura
nce to se
nior ma
nagem
ent and t
he Boa
rd on the
ef
fect
ivene
ss of ri
sk man
ageme
nt Grou
p-wi
de, in li
ne with a
n
agr
eed as
sur
ance pl
an. T
his hel
ps seni
or man
ageme
nt and the
Bo
ard to mee
t their over
sigh
t and adv
isor
y re
spon
sibili
ties i
n
ful
ﬁllin
g GSK
’
s str
ategic ob
jecti
ves and b
uildi
ng trus
t with
pati
ents an
d other st
akeho
lder
s. A&
A h
as a dua
l repor
ti
ng line
to our C
FO and t
he Com
mit
tee.
Th
e Comm
itte
e rece
ives re
gular r
epor
ts fr
om busi
nes
s units
,
pri
ncipa
l risk ow
ner
s, Co
mplia
nce a
nd A&
A on ar
eas of
sig
niﬁc
ant ri
sk to the G
roup an
d on relate
d intern
al con
trols
.
Th
ese re
por
ts as
ses
s the inter
nal c
ontrol e
nviron
ment wi
thin
each principal
risk area, includ
ing enhan
cements t
o st
rengthen
controls. Following consideration
of these reports, the
Co
mmit
tee rep
or
ts annu
ally to the B
oard o
n the ef
fect
ivene
ss
of GS
K’s inter
nal co
ntrol
s.
In 2021
, throug
h the auth
orit
y dele
gated to the C
omm
ittee
, the
Bo
ard co
nducte
d a robus
t ass
ess
ment of th
e Grou
p
’s princ
ipal
ris
ks. T
his as
ses
sme
nt, whi
ch was in l
ine wit
h the FR
C’s 20
1
8
Co
de, in
clude
d cons
ider
ation of th
e nature a
nd ex
tent of ris
k the
Bo
ard is wi
lling to t
ake in achi
eving G
SK’s str
ategic o
bjec
tives
.
Th
e Boar
d, via th
e Com
mitte
e, als
o overs
aw the ef
fecti
venes
s
of our i
nterna
l contr
ol envir
onmen
t and ri
sk mana
gemen
t
pro
ces
ses ac
ros
s the Gro
up for the w
hole ye
ar
, up to the
app
roval date o
f this An
nual Re
por
t.
A revie
w of
the Group
’
s
risk management
approach is
further
dis
cuss
ed in the ‘
Ris
k manag
ement
’ sec
tion of t
he strate
gic
rep
or
t on page
s 46 to 54.
Our management of each principal risk is
explained in ‘Principal
ris
ks and u
ncer
ta
intie
s
’ on pa
ges 27
5 to 287
. The G
roup’s
via
bilit
y is di
scus
sed in th
e Grou
p risk ma
nage
ment se
ction o
f
the s
trategi
c repo
rt on p
age 53
.
Our Board committee r
eports
continued
GS
K Ann
ual R
epor
t 2021
113
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Signiﬁcant issues relating to the ﬁnancial statements
In c
onsi
derin
g GSK
’
s qua
rter
ly ﬁna
ncia
l resul
ts anno
unce
ments a
nd the ﬁn
ancia
l resu
lts in the 2021 Ann
ual Rep
or
t, the C
ommi
ttee
revi
ewed the s
igniﬁ
can
t issu
es and m
anage
ment ju
dgeme
nts in dete
rmini
ng thos
e resul
ts. I
t reviewe
d manag
ement p
aper
s set
ting
out th
e key area
s of ris
k, ac
tions t
aken to qu
antif
y the ef
fe
cts of the r
elevan
t issu
es, a
nd judg
ements m
ade by ma
nagem
ent on the
app
ropr
iate acc
ountin
g requir
ed to add
ress t
hose i
ssue
s in the ﬁn
anci
al state
ments
.
Th
e signi
ﬁca
nt iss
ues co
nside
red in r
elatio
n to the ﬁna
ncia
l statem
ents for th
e year en
ded 31 Dece
mber 2021 are s
et out in th
e
foll
owing t
able, w
ith a sum
mar
y of the ﬁ
nanci
al outc
omes w
here a
pprop
riate. T
he Co
mmit
tee and th
e exte
rnal au
ditor have di
scus
sed
the s
igniﬁ
can
t issu
es addr
ess
ed by the C
ommi
ttee du
ring th
e year an
d the are
as of pa
rt
icula
r audit fo
cus
, as des
crib
ed in the
In
depen
dent Au
ditor’s Rep
or
t on page
s 1
56 to 1
67
.
Signiﬁcant issues considered by the Committee
in relation to the ﬁnancial statements
How the issue was addressed by the Committee
Going concern basis for the preparation
of the ﬁnancial statements
The Committee considered the outcome of management’
s half-yearly and year end reviews of current and
forecast net debt positions and the various ﬁnancing facilities and options available to the Group.
The Committee also considered management’
s review of the current and longer-term impacts of the C
O
VID-19
pandemic, at the outbreak of the pandemic and at the year end. Following consideration of these assessments,
which included stress testing and viability scenarios, sources of liquidity and funding, forecasts and estimates, the
Committee conﬁrmed that the application of the going concern basis for the preparation of the ﬁnancial
statements continued to be appropriate.
Revenue recognition, including r
eturns
and rebates (RAR) accruals
The Committee reviewed management’
s approach to the timing of recognition of revenue and accruals for
customer returns and rebates. The US Pharmaceuticals and V
accines accrual for returns and rebates was £5.0
billion at 31 December 2021 and the Committee reviewed the basis on which the accrual had been made and
concurred with management’
s judgements on the amounts involved. A fuller description of the process operated
in the US Pharmaceuticals and V
accines business in determining the level of accrual necessary is set out in
‘Critical accounting policies’
on page 80.
Provisions for legal matters, including
investigations into the Group’
s
commercial practices
The Committee received detailed reports on actual and potential litigation from both internal and external legal
counsel, together with a number of detailed updates on investigations into the Group’
s commercial practices.
Management outlined the levels of provision and corresponding disclosure considered necessary in respect of
potential adverse litigation outcomes and also those areas where it was not yet possible to determine if a
provision was necessary, or its amount. At 31 December 2021, the provision for legal matters was £0.2 billion,
as set out in Note 31 to the ﬁnancial statements, ‘Other provisions’.
Provisions for uncertain tax p
ositions
The Committee considered current tax disputes and areas of potential risk and concurred with management’
s
judgement on the levels of tax contingencies required. At 31 December 2021, a t
ax payable liability of £0.
7
billion, including provisions for uncertain t
ax positions, was recognised on the Group’
s balance sheet.
Impairments of intangible assets
The Committee reviewed management’
s process for reviewing and testing goodwill and other intangible assets
for potential impairment. The Committee accepted management’
s judgements on the int
angible assets that
required writing down and the resulting impairment of £455 million in 2021. See Note 20 to the ﬁnancial
statements, ‘Other int
angible assets’
for more det
ails.
V
aluation of contingent consideration
in relation to V
iiV Healthcare
The Committee considered management’
s judgement that it was necess
ary to increase the liability to pay
contingent consideration as a result of increases in sales forecasts as well as the unwind of the discount and
updated exchange rate assumptions. After cash payments of appro
ximately £0.8 billion in the year
, at 31
December 2021, the Group’
s Balance sheet included a contingent consideration liability of £5.6 billion in relation
to V
iiV Healthcare. The settlement with Gilead resulted in a re-measurement of the existing liabilities for the
contingent consideration at the year end and is included in the closing balance.
ViiV Healthcare put option
The Committee reviewed and agreed the accounting for the Pﬁzer put option and concurred with management’
s
judgement on the valuation of the put option of £1.0 billion at 31 December 2021. The settlement with Gilead
resulted in a re-measurement of the Pﬁzer put option at the year end and is included in the closing balance.
Our Board committee r
eports
continued
114
GS
K Ann
ual R
epor
t 2021
Our Board committee r
eports
continued
Auditor
’
s r
eappointment
External auditor
Ex
ternal auditor appointment
Last tender
May – December 20
16
T
ransition year
2
017
First shareholder approval of current auditor
May 2018
First audited Annual Report and 20-F
Y
ear ending 31 December 2018
Next audit tender required by regulations
2026
There were
no contractual
or sim
ilar obligat
ions restricting
the
Gr
oup’
s choi
ce of ex
tern
al audi
tor
. The C
ommit
tee co
nsid
ers
that d
uring 2020 th
e comp
any com
plied w
ith the m
andator
y
audit processes and audit
committee responsibility pro
visions
of the C
omp
etitio
n and M
arkets A
uthor
ity St
atutor
y Audi
t
Ser
vices
Order 20
1
4.
Effectiveness and quality of external audit process
Th
e Comm
itte
e is comm
itte
d to ensur
ing that G
SK rec
eive
s a
hig
h-qua
lit
y and ef
fect
ive ex
terna
l audit
. In evalu
ating D
eloit
te’
s
per
fo
rmanc
e duri
ng 2020, pri
or to mak
ing a rec
omme
ndatio
n
on it
s reap
pointm
ent in e
arly 2021
, t
he Co
mmit
tee revi
ewed the
ef
fect
ivene
ss of it
s per
form
ance a
gains
t the cri
teria w
hich it
agr
eed wi
th manag
ement a
t the beg
inning of 2020
. The
det
aile
d criter
ia use
d for jud
ging the e
ffe
ctiven
ess of D
eloi
tte as
external audit
or (
which
are based on
audit approach
and
strat
egy
, h
igh-quality indepen
dent aud
it, effective
partnership
and va
lue for m
oney
) and i
ts overri
ding re
spon
sibil
ity to de
liver a
smo
oth, th
orough a
nd ef
ﬁci
ently-
execu
ted audi
t for 202
1 are
avail
able on g
sk
.com. I
n unde
rt
aki
ng its rev
iew
, the C
ommi
ttee
considered:
–
the ove
rall qu
alit
y of the au
dit
–
the independence of Deloitte
–
whe
ther De
loit
te exhib
ited an a
pprop
riate leve
l of chal
lenge
and s
cepti
cism i
n its work
De
loit
te
’s lengt
h of tenure wa
s not ta
ken into ac
count w
hen
as
ses
sing i
ts inde
pende
nce an
d objec
tivi
ty, as it wa
s only
rec
entl
y appoi
nted as G
SK’s aud
itor
. However, the C
ommit
tee
did c
onsi
der how ef
fec
tivel
y it had a
ssum
ed its ro
le as au
ditor
.
Th
e Comm
itte
e also c
onsid
ered fe
edba
ck on the 2021 ex
t
ern
al
aud
it, thr
ough a sur
vey of C
ommi
ttee m
embe
rs and th
e ﬁnan
cial
man
ageme
nt team at c
orpo
rate and b
usine
ss uni
t level. T
he
sur
vey cove
red the:
–
ef
fect
ivene
ss of the a
uditor
’
s cha
llenge
–
integrity of Deloitte
–
transparency
of its
reporting t
o managem
ent and
the
C
ommi
ttee
–
cla
rit
y of the au
ditor’s co
mmunic
ation a
nd ways of wor
king
–
ali
gnment o
f the 202
1 audi
t to the Gro
up’
s inves
tment in
Syste
ms, A
pplic
ation
s and Pr
oduct
s (
SAP)
–
qua
lit
y of the aud
it team’s lead
ers
hip
–
sk
ills an
d exper
ienc
e of the au
dit team
The Committee Chair regularly
meets indepen
dently with
the
aud
it par
tne
rs. T
he Co
mmit
tee als
o meets th
e audito
r at the
end of
each meeting
to
discuss progress, as appropriat
e.
Havi
ng revi
ewed the ab
ove feedb
ack
, and note
d any are
as of
imp
rovemen
t to be impl
emente
d by the audi
t team for 2022
,
the C
ommi
ttee wa
s sati
sﬁe
d with the:
–
ef
fect
ivene
ss of the a
uditor a
nd the ex
tern
al audi
t proc
ess
and
–
auditor’
s
independence, qualiﬁcations, obj
ectivity,
expertise
and
resou
rces
The Committee therefore agreed t
o recommend the
re
appoi
ntment o
f Deloi
tte to the B
oard at t
he for
thco
ming AGM
.
In making its recommendat
ion, the
Committee was free fr
om the
inﬂuence of
any
third
part
y
.
Non-audit services
Our management
operates
on the
presumption
that
other
acc
ount
ancy ﬁr
ms wil
l provid
e non-au
dit se
rv
ices to G
SK
.
Howeve
r
, where t
he ex
t
er
nal audi
tor’s ski
lls and e
xper
ienc
e
make it
the on
ly suitable su
pplier of
non-audit
support – such
as fo
r audit-r
elated ma
tter
s, ta
x, a
nd other s
er
vic
es – it may be
use
d, in th
e best i
nteres
ts of the c
ompa
n
y. In line w
ith GS
K’s
non
-audit s
er
vic
es poli
cy
, the C
ommit
tee mu
st ensu
re that
audito
r objectivity and
independen
ce is saf
eguarded b
y
reviewing
and pre-appro
ving t
he external audit
or’
s pro
vision o
f
suc
h ser
vic
es. T
he co
mpany po
licy co
mplie
s with t
he FRC
’
s
201
9 Revi
sed Eth
ical S
tand
ard and t
he Sar
bane
s-O
xley Ac
t
of 20
02. It ob
ser
ves th
e followi
ng cor
e polic
y feature
s on
eng
aging th
e exte
rnal au
ditor for n
on-au
dit ser
vi
ces:
G
S
K non-audit services policy
, key featur
es:
Process:
All non-audit services over £5
0,000 are put to competitive
tender with other ﬁnancial services providers, in line with the
Group’
s procurement process, unless the skills and experience
of the external auditor make it the only suitable supplier.
Safeguards:
Adequate safeguards are est
ablished so that the objectivity
and independence of the Group audit are not threatened or
compromised.
Fee cap:
The total fee payable for non-audit services should not
exceed 50% of the annual audit fee, except in special
circumstances where there would be a clear advant
age in
the auditor undertaking the additional work.
Prohibitions:
GSK’
s policy includes a ‘whitelist’
of permitted non-audit
services in line with the relevant regulations. Any service not
on this list is prohibited.
Pre-approval:
All non-audit services require pre-approval as set out in the
table below to ensure services approved are consistent with
GS
K’
s non-audit policy for permissible services. This process
ensures all services fall within the scope of services permitted
and pre-approved by the Committee and does not represent
a delegation of authority for pre-approval.
V
alue
More than £50,000
Between £25,000 and
£50,000
Under £25,000
Pre-appr
over
Committee Chair and CFO
Group Financial Controller
Designate of the Group
Financial Controller
Th
e fees pa
id to the co
mpany
's auditor a
nd its a
sso
ciates a
re
set o
ut overle
af. Fur
ther d
etail
s are gi
ven in Note 8 to th
e
ﬁna
ncia
l statem
ents
, ‘Oper
ating p
roﬁt
’ on pag
e 1
84
.
GS
K Ann
ual R
epor
t 2021
11
5
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Our Board committee r
eports
continued
Dur
ing the ye
ar
, fee
s for audi
t relate
d and othe
r ass
uran
ce
ser
vi
ces o
f £4.
0 millio
n have incr
ease
d by £2.4 m
illion
co
mpare
d to 2020. This i
ncre
ase is d
ue to work a
sso
ciated
wit
h Delo
itte’s repo
rti
ng acc
ounta
nt role i
n prepa
ring fo
r the
demerger of
the Consumer Healthcare business. Including
aud
it fees i
n resp
ect of t
he GSK p
ensi
on sche
mes of £
0.2
million, f
ees for
audit rela
ted and
other
assurance ser
vices
rep
rese
nt 1
5
.2% of t
he annu
al audi
t ser
vic
e fee (2020: 6.3
%
).
Excluding the demerger
work, fees f
or audit
relat
ed and o
ther
as
sura
nce se
rv
ice
s would have re
pres
ented 2
.2% of th
e
annual audit
fee.
Th
e Comm
itte
e consi
dere
d that hir
ing Del
oit
te t
o und
er
take the
rep
or
ting ac
count
ant rol
e for the de
merg
er was in t
he bes
t
interests
of shareholders because
:
–
Deloitte p
ossessed the type o
f expertise, e
xperience, siz
e
and
interna
tional scope requ
ired t
o handle
a major
demerger of
this scale and complexity
–
the compan
y beneﬁted
speciﬁcally from Deloitte’
s
in-depth
knowledge and understa
ndin
g of our
CH business and their
process
es
and compliance environment
and
–
man
ageme
nt time
, that would o
ther
wis
e have been d
evoted
to edu
cating a
nothe
r ﬁrm on th
e comp
any’s busi
ness a
nd
ope
ratio
ns, co
uld ins
tead be s
pent on d
eliver
ing the
demerger and crea
tion of
Haleon.
Th
e Comm
itte
e consi
dere
d the level o
f non-au
dit ser
vi
ces
inc
urre
d as par
t of it
s annua
l review o
f Deloi
tte’s indep
ende
nce
set o
ut on pag
e 1
1
4 a
nd was s
atisﬁ
ed that th
e audito
r conti
nued
to be
independent and exercise objectivity throughout 20
2
1
.
0
10
20
30
Audit and assurance services
Other services, including tax, regulatory, compliance and treasury-related
services
Services relating to the Consumer Healthcare demerger preparation
Note 8 to the Financial statements provides further details of fees payable to
the company's auditor.
Audit and other services comparison (£m)
26.2
26.6
2019
29.1
1.5
2021
30.3
1.4
27.7
2020
28.3
1.8
4.2
Fair
, balanced and underst
andable assessment
Th
e need for a
n annu
al repo
rt to b
e fair, bala
nced a
nd
und
erst
anda
ble is o
ne of the key co
mplia
nce re
quire
ments fo
r a
co
mpany’s ﬁn
ancia
l statem
ents
. T
o ens
ure that G
SK
’
s Annu
al
Rep
or
t meets th
is requ
ireme
nt, we have a wel
l-es
tabl
ishe
d and
doc
umente
d proc
ess gove
rning t
he coo
rdinati
on and r
eview of
Group-wide contributions
to
the
publication. This
runs in
parallel
wit
h the pro
ces
s followe
d by the ex
terna
l auditor. The
Committee received a su
mmar
y
of mana
gement’
s approach
to
GS
K’s 202
1 Annu
al Rep
ort to e
nsure i
t met the r
equire
ments o
f
the F
RC’s Co
de. Th
is enab
led the C
omm
ittee
, and the B
oard
,
to con
ﬁrm th
at GSK
’s 20
2
1 An
nual Rep
or
t as a wh
ole is fa
ir
,
balanced and
understandable
and
provides
the
necessar
y
information
for
shareholders to
assess the company’
s posit
ion
and p
er
forma
nce, b
usine
ss mo
del an
d strateg
y
.
Code of Conduct and reporting lines
We have a numbe
r of well-
est
ablis
hed po
licie
s (incl
uding a
Code of Conduct)
, which
are a
vailable
on gsk.com, toget
her
wit
h detai
ls of our c
onﬁd
entia
l Spea
k Up line
s for re
por
ting an
d
inv
estigating
unlawful conduct.
Charles Banc
roft
Audi
t & Ris
k Comm
itte
e Chair
28 Feb
ruar
y 2022
11
6
GS
K Ann
ual R
epor
t 2021
Section 1
72 st
atement
Co
mpany di
recto
rs are r
equir
ed by law to pro
mote the su
cce
ss
of the
ir org
anis
ation for t
he bene
ﬁt of bo
th shar
ehold
ers an
d
their wider stakeholders, including
employees, suppliers and
the
communit
y
.
Thi
s statem
ent ali
gns to suc
h requi
remen
ts, as s
et out in
Se
ction 1
72 an
d Sect
ion 4
1
4CZ
A of the C
ompa
nies Ac
t 2006
(
the Ac
t). It indi
cates h
ow
, durin
g the year, our Di
recto
rs
add
res
sed the m
atter
s set out i
n Sect
ion 1
72(
1
) (a) to (
f) of t
he
Act w
hen pe
rfo
rming t
heir du
ties
. T
o avoid d
uplic
ation
, it
incorporates inf
ormation
from ot
her areas of t
he Annual R
eport
.
Th
e Boar
d consi
der
s that the s
tatemen
t focus
es on tho
se ris
ks
and o
ppor
tuni
ties th
at are st
rategic
ally i
mpor
ta
nt to GSK
, an
d
co
nsiste
nt with th
e Grou
p
’
s size a
nd com
plexi
ty.
Thi
s allows i
t to build tr
ust an
d fully u
nder
stan
d the potent
ial
imp
acts of th
e deci
sions i
t makes o
n all our s
takeh
older
s. O
ur
engagement
with GSK’
s main
stakeholder
groups, i
ncluding
our
patients, shareholders, consumers, customers and employees
at all l
evels and a
cros
s the org
anis
ation
, are sum
mari
sed on
pag
es 44 an
d 45 of our s
trategi
c repo
rt
.
Th
e compa
ny’s governa
nce ar
chite
cture an
d proc
ess
es are
sum
mari
sed on p
ages 94 to 1
03 of o
ur Cor
por
ate Govern
ance
report
.
This summary explores ho
w the
Board considers all
relevant
matters in
making its prin
cipal decisions t
o con
tribute
to
the deliv
ery of GSK’s long-
t
erm priorities of
Innova
tion,
Performance and
T
rust.
More information
on t
he issues, factors and
stakeholders t
hat
the Board considers rele
vant
to
complying with
Section 1
72(
1
)
(a) to (
f
) of the A
ct ca
n be found i
n the loc
ation
s outlin
ed bel
ow
.
The Boar
d has had regar
d to the following matters:
(a
) Long-term result
s
The likely consequences of any decision in the
long-term
Strategic report:
Our business model (page 1)
Chair’
s statement (page 3)
CE
O’
s st
atement (page 5)
Key performance indicators (page 12)
Risk management (page 46)
V
iability statement (page 53)
Corporate Governance report:
Chair's governance statement (page 8
9)
Board activity (page 95)
Board progress in 2021 (page 9
6)
The Board’
s approac
h to continuous
engagement (page 99)
Board-led purpose and culture (page 1
02)
Audit & Risk Committee report (page 111)
(b) Our w
ork
forc
e
The interests of the Group’
s employees
Strategic report:
Our business model (page 1)
Our culture (page 11)
Being a modern employer (page 3
7)
Stakeholder engagement (page 4
4)
Corporate Governance report:
Board activity (page 95)
Board progress in 2021 (page 9
6)
The Board’
s approac
h to continuous
engagement (page 99)
Board-led purpose and culture (page 1
02)
Audit & Risk Committee report (page 111)
Nominations & Corporate Governance
Committee report (page 1
0
7)
Remuneration report:
Remuneration Committee Chair’
s
statement (page 120)
Directors’
pay in a wider setting (page 132)
gsk.com:
Gender pay gap report
(c
)
Our business relatio
nships
The importance of developing the Group’
s business
relationships with suppliers, customers and others
Strategic report:
Our business model (page 1)
Our external environment (page 13)
Stakeholder engagement (page 4
4)
Innovation (page 1
7)
Performance (page 29)
Reliable supply (page 38)
W
orking with third parties (page 38)
Risk management (page 46)
Corporate Governance report:
Board activity (page 95)
Board progress in 2021 (page 9
6)
The Board’
s approac
h to continuous
engagement (page 99)
Audit & Risk Committee report (page 111)
Corporate Responsibility Committee report
(page 1
04)
(
d) The
community and ou
r env
ironment
The impact of the Group’
s operations on the
community and our environment
Strategic report:
T
rust section including:
Environment (page 39)
Environment, Health and Safety, and
Environmental Sust
ainability risks (page 48)
Climate-related ﬁnancial disclosure (page 49)
Corporate Governance report:
Corporate Responsibility Committee report
(page 1
04)
gsk.com:
ES
G P
erformance Report
(
e
) Our
reputation
Our desire to maintain our reput
ation for high
standards of business conduct
Strategic report:
Our culture (page 11)
T
rust (page 3
4)
Ethics and values (page 38)
Human rights (page 38)
Reporting and investigating concerns (page 38)
Anti-bribery and corruption risk (pages 4
7 and 27
9)
Non-ﬁnancial information statement (page 5
4)
Our approach to tax (page 60)
Corporate Governance report:
Corporate Responsibility Committee
report (page 1
04)
gsk.com:
Modern slavery statement
(f)
Fairness
between
our s
hareholders
Our aim to act fairly as between members of the
Group
Corporate Governance report:
Chair's governance statement (page 8
9)
The Board’
s approac
h to continuous
engagement (page 99)
T
ransformation & Separation Committee
report (page 11
0)
Investor information (page 25
7)
GS
K Ann
ual R
epor
t 2021
117
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Our Directors
’ pow
ers are det
ermined b
y UK legisla
tion and
our A
rt
icle
s of Ass
ociat
ion, w
hich co
ntai
n rules a
bout th
e
app
ointm
ent and r
eplac
ement o
f Dire
ctors
. They p
rovid
e that
Dir
ector
s may be ap
pointe
d by an ordi
nar
y res
oluti
on of the
mem
ber
s or by a res
olutio
n of the Bo
ard, p
rovid
ed that, i
f
app
ointed by t
he Boar
d, the D
irec
tor retir
es at the n
ext A
nnual
General Me
et
ing following
their appointment.
Our A
r
ticle
s also p
rovide t
hat all D
irec
t
or
s are re
quire
d t
o see
k
re-election annually
at the
Annual General Meeting
in
accordance with t
he FRC's Code.
A Dir
ector w
ill ce
ase to be a D
irec
tor if he o
r she:
–
becomes bankrupt
–
ce
ase
s to be a Dir
ector by vi
rtu
e of the C
ompa
nies Ac
t or
the Ar
ticles
–
suf
fer
s ment
al or phys
ica
l ill hea
lth and t
he Boa
rd res
olves
that h
e or she sh
all ce
ase to b
e a Dire
ctor
–
ha
s miss
ed Dir
ector
s’ meetin
gs for a co
ntinuo
us per
iod of
si
x months w
ithou
t permi
ssi
on and th
e Boar
d reso
lves tha
t
he or s
he sha
ll cea
se to be a D
irecto
r
–
is pr
ohibi
ted from b
eing a D
irec
t
or by law
–
re
signs
, or of
fer
s t
o re
sign an
d the Boa
rd acc
epts th
at of
fer
–
is re
quire
d to resi
gn by the Bo
ard
Directors’
conﬂicts of interest
All D
irec
tors have a d
uty un
der the C
omp
anies A
ct 200
6 to
avoid a s
ituatio
n in whi
ch they have, o
r could h
ave, a dire
ct or
indi
rect c
onﬂi
ct of inte
rest o
r poss
ible c
onﬂi
ct with t
he
co
mpany. Our A
rti
cles p
rovide a g
ener
al power fo
r the Bo
ard
to
authorise such
conﬂicts.
Th
e Boar
d reviews a
ny new potent
ial or ac
tual c
onﬂi
ct, wh
ich is
rec
orde
d by the C
ompany S
ecre
tar
y
. Dir
ector
s are not c
ounted
in th
e quoru
m for the au
thori
satio
n of their ow
n actua
l or
poten
tial c
onﬂic
ts. T
he Nom
inatio
ns & Cor
pora
te Govern
ance
Co
mmit
tee revi
ews the Re
gister o
f Con
ﬂicts o
n an annu
al ba
sis
which the
Board subsequently
approv
es.
On a c
ontinu
ing ba
sis, th
e Dire
ctor
s are re
spons
ible fo
r
info
rming t
he Com
pany Se
cret
ar
y of any suc
h new actua
l or
poten
tial c
onﬂic
ts that m
a
y ari
se or if t
here ar
e any cha
nges in
circumstances that
may
affect an authorisation
previously
given.
Even wh
en prov
ided w
ith auth
oris
ation
, a Dire
ctor is not
ab
solved f
rom his o
r her st
atutor
y dut
y to prom
ote the suc
ces
s
of the c
ompa
ny
. If an a
ctual c
onﬂi
ct ari
ses po
st-autho
ris
ation,
the B
oard m
a
y cho
ose to excl
ude the D
irec
tor from r
ecei
pt of
the rele
vant
information
and participation i
n the
debate,
or
sus
pend th
e Dire
ctor fro
m the Bo
ard, o
r
, a
s a las
t res
ort
, requ
ire
the D
irec
tor to resi
gn.
Th
e Nomin
ations & C
orp
orate Gove
rnan
ce Co
mmit
tee
review
ed the
register
of pot
ential
conﬂict authorisations
(
t
he
Reg
ister of C
onﬂ
icts) in Janu
ar
y 2022. The C
ommi
ttee r
epor
ted
to the B
oard th
at the co
nﬂict
s had be
en appr
opri
ately
authorised and tha
t the
process for authorisation continued
to
ope
rate ef
fect
ively. The C
ommi
ttee th
en rec
omme
nded th
e
app
roval of th
e Regis
ter of Co
nﬂic
ts to the Bo
ard wh
ich it
sub
sequ
ently ap
proved
. Exc
ept as d
esc
ribed i
n Note 39 to the
ﬁna
ncia
l statem
ents
, ‘Rel
ated par
t
y trans
acti
ons’
, during o
r at
the e
nd of the ﬁn
anci
al year n
o Dire
ctor or Per
son C
lose
ly
As
soci
ated had a
n
y mater
ial inte
rest i
n any con
tract o
f
sig
niﬁc
anc
e with a G
roup co
mpany.
Our A
r
ticle
s prohi
bit a Di
rector f
rom votin
g on any re
solut
ion
concerning his or
her appoin
tment or
the
terms or
termina
tion
of hi
s or her ap
pointm
ent.
Independent advice
Th
e compa
ny has a
n agree
d proc
edure fo
r Dire
ctor
s t
o ta
ke
independent
legal and/
or ﬁnancial advice a
t the
company’
s
exp
ense w
here th
ey deem it n
ece
ssa
ry.
Indemniﬁcation of Directors
Qu
alif
yin
g third p
ar
ty ind
emnit
y prov
ision
s (
as de
ﬁned in t
he
Co
mpan
ies Ac
t 2006) are in f
orce fo
r the ben
eﬁt of D
irec
tors
and fo
rmer D
irec
tors w
ho held o
fﬁ
ce dur
ing 202
1 and up to th
e
app
roval an
d signat
ure of the A
nnua
l Repor
t.
Change of control and essential contracts
We do not have co
ntrac
ts or othe
r arr
angem
ents wh
ich
indi
vidu
ally a
re fund
ament
al to the ab
ilit
y of the bu
sines
s to
ope
rate ef
fect
ively. Nei
ther is th
e comp
any par
t
y to any materi
al
agr
eemen
ts that woul
d take ef
fec
t, be al
tered
, or termi
nate upon
a cha
nge of c
ontrol fo
llowin
g a takeove
r bid. We do not h
ave
agr
eemen
ts with a
ny Dire
ctor that wo
uld prov
ide co
mpens
ation
for lo
ss of of
ﬁ
ce or emp
loyme
nt resu
lting f
rom a take
over
,
exce
pt that pr
ovisio
ns of the c
ompa
ny’
s sha
re plan
s may cau
se
opti
ons and awa
rds gr
anted un
der suc
h plans to ve
st on a
t
a
ke
o
v
er.
Det
ails of t
he termi
nation p
rovis
ions in th
e Exe
cutive D
irec
tors’
ser
vi
ce co
ntrac
ts are gi
ven in the f
ull vers
ion of th
e comp
any’s
2020 Rem
unerat
ion pol
icy whi
ch is avail
able at w
w
w.gsk
.com
in th
e Investo
rs sec
tion
.
Dir
ectors’
r
ep
ort
11
8
GS
K Ann
ual R
epor
t 2021
Content of the D
i
rectors’ repor
t
For t
he purp
ose
s of the UK C
omp
anie
s Act 200
6, the
Dir
ector
s’ repo
rt of G
la
xoSm
ithK
line pl
c for the ye
ar end
ed
3
1 De
cemb
er 202
1 comp
rise
s:
Directors’
report
Section
Pages
Corporate gov
ernance report
82 to 118
Employee
engagement
10
0
Directors’
statements
of
responsibilities
154 to 155
Investor
information
25
7 to 31
0
Th
e strateg
ic rep
ort s
ets out t
hose ma
tter
s requi
red to be
disclosed in t
he Directors
’ report which are considered
to
be of s
trategi
c impo
rt
ance:
Strategic report
Section
Pages
Risk managemen
t object
ives an
d policies
4
6 to 54
and 275
to 28
7
Likely fut
ure dev
elopments o
f the
company
1 to 81
Research and de
velopment
activities
1
7 to 28
Business relationships
38
Diversity
37
Provision of
information
to
and consultations
with
employees
11 and 3
7
Carbon emissions
39
Section 1
72
stat
ement
44 to 45
and 116
Directors’
Rep
ort
continued
The following
information
is also incorporated
into
the Directors
’
report:
Location in Annual Report
Interest capitalised
Financial statements,
Notes
17
and
20
Publication of unaudited ﬁnancial information
Group ﬁnancial review, page 55
Details of any long-term incentive schemes
Remuneration report
W
aiver of emoluments by a Director
Not applicable
W
aiver of future emoluments by a Director
Not applicable
Non pre-emptive issues of equity for cash
Not applicable
Non pre-emptive issues of equity for cash
by any unlisted major subsidiary undertaking
Not applicable
Parent company participation in a placing
by a listed subsidiary
Not applicable
Provision of services by a controlling
shareholder
Not applicable
Shareholder waiver of dividends
Financial statements,
Notes 16
and
44
Shareholder waiver of future dividends
Financial st
atements,
Notes 16
and
44
Agreements with controlling shareholders
Not applicable
The Dir
ectors’
report
–
ha
s been d
rawn up an
d pres
ented in a
ccor
danc
e with a
nd in
rel
ianc
e upon En
glish c
ompa
ny law and the l
iabil
ities o
f the
Dir
ector
s in co
nnect
ion wit
h that Rep
or
t shall b
e subje
ct to
the lim
itations and
restrictions pro
vided b
y such
law
.
–
was a
pprove
d by the Boa
rd of Di
rector
s on 28 Fe
brua
ry
2022 and si
gned o
n its beh
alf by:
Sir Jonathan Symonds
Chair
28 Feb
ruar
y 2022
GS
K Ann
ual R
epor
t 2021
11
9
Strategic report
Governance and remuneration
Financial st
atements
Investor information
R
emu
nerat
ion
In this s
ect
ion
Co
mmit
tee Cha
ir’s annu
al state
ment
1
20
Annual report on remuneration
1
25
2022 Remu
nerati
on poli
cy summ
ar
y
1
4
3
2022 Remu
nerati
on poli
cy rep
ort
1
4
4
GS
K Ann
ual R
epor
t 2021
11
9
Strategic report
Governance and remuneration
Financial st
atements
Investor information
12
0
GS
K Ann
ual R
epor
t 2021
Remuneration r
ep
ort
Committee Chair
’
s annual st
atement
Dear Shareholder
,
On b
ehal
f of the Rem
unerat
ion C
ommit
tee (
the C
ommi
ttee), I
am pl
eas
ed to pre
sent ou
r Remune
ratio
n repor
t fo
r 202
1. This
inc
lude
s my annua
l statem
ent expl
ainin
g the Co
mmit
tee’
s work
this ye
ar
, our a
nnual r
epor
t on re
muner
ation fo
r 202
1
, ou
r
upd
ated 2022 Remun
erati
on poli
cy repo
rt ex
plai
ning the
change proposed t
o alig
n our
compensation arrangements
for
new GS
K
, and det
ails of h
ow we prop
ose to ope
rate the p
olicy
this ye
ar
.
Review of 2021 I
PT outcomes
I woul
d like to set the d
ecis
ions ta
ken by the C
ommi
ttee over
the c
ours
e of 202
1 in con
text ag
ains
t our overa
ll per
for
manc
e.
Innovation:
In terms o
f inno
vat
ion, we
made sign
iﬁcant
pro
gres
s in 202
1 in fur
th
er stre
ngthe
ning our R&
D biop
harm
a
pipeline.
It comprises
64 V
accines and Special
ty Medicines,
wit
h excitin
g new develo
pment
s in HI
V and C
O
VI
D
-
1
9
solutions
.
Performance:
O
verall
, 202
1 was a yea
r of stro
ng sal
es
per
fo
rmanc
e and st
rategi
c progr
ess fo
r GSK
. We saw Gr
oup
sa
les gr
owth o
f 5% CER dr
iven by gr
owth a
cros
s
Pharmaceutic
als, V
accine
s
and Consumer Healthcare
(
exclu
ding br
ands di
veste
d/under r
eview). T
ota
l earn
ings
dec
lined by 9
% CER r
eﬂec
ting th
e proﬁ
t on disp
osal o
f the
Ho
rlick
s busin
ess i
n 2020. However, we achieve
d Adjus
ted
EP
S grow
th (inc
luding C
OVI
D-
1
9 so
lution
s
) of 9% (CER)
ahe
ad of upd
ated gui
danc
e. The pi
pelin
e for 2022 rema
ins
robust, with continued
progress in pharma and v
accines.
Tr
u
s
t
:
Th
e comp
any conti
nues to bu
ild its E
SG lead
ers
hip
pos
itio
n and dur
ing the ye
ar was r
anked ﬁr
st aga
in in the
Acc
es
s t
o Me
dicin
es In
dex for the e
ighth ti
me in a row. GSK
was a
lso ﬁr
st in th
e phar
maceu
tica
l indus
tr
y group of t
he Dow
Jon
es Sus
tain
abili
ty In
dex, re
cei
ved gold r
ecog
nitio
n in S&
P’s
Sus
tain
abili
ty Y
e
arbo
ok and a
n A- in CD
P Climate C
hange
.
2021 remuneration outcomes
This performance delivery resulted in
higher t
otal remun
eration
in re
spec
t of 202
1 for Em
ma W
alm
sley our C
EO, Dr Ha
l Barr
on
our C
SO, and I
ain M
ack
a
y our C
FO tha
n in 2020. Thi
s was du
e
to an in
crea
se in var
iabl
e per
form
ance r
elated p
ay from the
ann
ual bon
us throu
gh achi
evement o
f the adju
sted Gr
oup PB
IT
ﬁnancial measure. In addition,
the CFO’
s
remuneration
increase
als
o reﬂe
cted th
e vestin
g of his ﬁr
st PS
P award s
ince j
oining th
e
co
mpany in 201
9
.
The ke
y decisions
made b
y the
Committee were as
follow
s:
–
Bonus
– The o
utcome
s for the C
EO, CFO a
nd CSO w
ere
each det
ermined by
reference t
o performance against t
he
agr
eed ﬁn
ancia
l mea
sure of a
djuste
d Group P
BI
T
, a
nd the
Committee’
s asses
smen
t of
thei
r ind
ividual performance.
Fi
nanci
al per
for
manc
e resu
lted in a bo
nus paym
ent at 1
04%
of the ﬁ
nanc
ial ta
rget
. The C
ommit
tee’s ass
ess
ment of e
ach
Executive
’
s
performance against
the
personal obj
ectives
set
for th
em at the st
ar
t of the ye
ar is set o
ut on pag
e 1
29. Th
e
Committee believes
the bonu
s out
comes appropriat
ely reﬂect
the ove
rall un
derl
ying pe
rfo
rman
ce achi
eved in 2021
. Fu
ll
details are p
rovided on
page 1
2
8.
–
V
es
ting of L
TI award
s
– Only 58
% of the 201
9 Pe
rfo
rman
ce
Sha
re Pla
n (PS
P) a
war
d vested
. The pr
e-agr
eed me
asur
es
for th
is award we
re
: R&D n
ew produ
ct per
fo
rmanc
e; adjus
t
ed
fre
e cas
h ﬂow; and r
elati
ve TSR
, eac
h of whic
h was eq
ually
weig
hted. Pe
rfo
rman
ce was m
easu
red over th
e three ye
ars
to 3
1 Dec
embe
r 202
1
. 7
4% of the R&D n
ew produ
ct
me
asur
e vested
. This r
eﬂec
ted deli
ver
y in stre
ngthe
ning the
pipeline and
the su
ccess
ful
commercialisation
of ne
wly
launched products. The continued
strong focus
on cash
management and
generation
resulted
in full
delivery of t
he
adjusted
free cash ﬂow measure. Disappointi
ngly
,
the
co
mpany’s rel
ative TS
R per
for
manc
e over the la
st thre
e year
s
ha
s again r
esul
t
ed in t
his par
t of th
e award la
psing i
n full. T
he
ves
ted shar
es wil
l be defe
rred fo
r two yea
rs
. See pag
e 1
3
0.
–
Base salary
– Fo
llowin
g a review o
f Exe
cutive D
irec
tors’
per
fo
rmanc
e, the C
ommi
ttee a
greed t
hat they sh
ould re
ceive
an an
nual in
crea
se of 2% f
or 202
1 in line w
ith inc
rea
ses
prov
ided to th
e wide
r work
force i
n the UK a
nd US
. The
Co
mmit
tee als
o agre
ed to award D
r Barr
on an inc
rea
se of
8% fr
om 1 Augu
st 202
1 to reﬂ
ect the c
reati
on of One R
&D.
This new
organisation
brought t
ogether
the
scientists and
gover
nanc
e acros
s Pha
rmac
eutic
als a
nd V
acci
nes to ens
ure
that to
gether t
hey can fo
cus on a
nd inves
t in what ma
tter
s
acr
oss th
e Group a
s a who
le. (See pa
ge 1
26 for f
urt
her
d
e
ta
i
l
s).
Th
e 202
1 bonus a
nd all awar
ds in rel
ation to 2021 were ma
de
in ac
cord
ance w
ith our R
emune
ration p
olicy a
nd in dete
rmini
ng
the out
comes, the Committee carefully
considered each
E
xecut
ive Dir
ector
’
s per
for
manc
e but did no
t deem i
t nece
ssa
ry
to
exercise d
iscretion or
address any
anomaly in
the
per
fo
rmanc
e outco
mes
. This r
eview inc
lude
d an as
ses
sment o
f
per
fo
rmanc
e agai
nst all t
he releva
nt mea
sure
s and in th
e wide
r
conte
xt, especially the
compan
y’
s Cu
lture
and
T
rust priority
.
GS
K did not a
cce
ss any C
O
VI
D-
1
9 G
overnm
ent supp
or
t or job
rete
ntion sc
heme
s durin
g 202
1 or 2020. The d
ivid
end pol
icy
was m
ainta
ined d
uring th
e year an
d the com
pany de
livere
d its
upg
rade
d ﬁnanc
ial gui
danc
e for the ye
ar
.
G
S
K’
s remuneration policy
I woul
d like to set out w
hy the C
ommit
tee is s
eek
ing to upda
t
e
our Re
muner
ation p
olicy at t
his time
.
Th
e past fo
ur year
s have see
n a peri
od of sig
niﬁc
ant
tra
nsfor
matio
n for GS
K, th
e resu
lts of whi
ch are b
ecom
ing
evid
ent as we s
eek to fun
dame
ntall
y addre
ss lo
ng sta
nding
issues and prolonged
T
otal Shareholder Ret
urn under
-
per
f
ormance. The Committee agreed
it was t
herefore essential
to revi
ew our Rem
unerat
ion pol
icy ahe
ad of the u
sual th
ree-
year
cycle t
o deﬁne t
he biopharma business’ n
ew approach
to
remuneration.
GS
K Ann
ual R
epor
t 2021
12
1
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Th
e policy r
eview ha
s soug
ht to ensur
e our rem
unera
tion
ar
range
ments o
nly rewa
rd the de
liver
y of our b
old new
per
fo
rmanc
e ambi
tions
. The key fo
cus of th
e Investo
r Update
(I
U) ambi
tions over t
he nex
t ﬁve yea
rs is to de
liver s
ales g
row
th
of mo
re than 5% C
A
GR a
nd adjus
ted ope
rating p
roﬁt g
row
th of
mor
e than 1
0% CAG
R from 2021
. T
hes
e ambit
ions excl
ude
contributions
from early stage
assets, future business
devel
opmen
t and COV
ID
-
1
9 solu
tions
. W
e have sig
niﬁc
antly
cha
nged ou
r per
form
ance p
ay out cur
ves to t
his end to fo
cus
exp
ectat
ions to over d
eliver
y. Goin
g for
ward, a
chievem
ent of
the
se amb
ition
s should d
elive
r t
op qu
ar
tile pe
rfo
rman
ce for ou
r
sector
.
Following
a comprehensive
revie
w
, t
he Committee concluded
that th
e main p
olicy f
ramewo
rk rema
ined ﬁ
t for pur
pose
. Given
that d
rivi
ng long ter
m per
for
manc
e throug
h consi
stent ye
ar on
yea
r shor
t term i
mprovem
ent was t
he main a
im, ch
anging t
he
Annual Bonus plan
to
support and deliver
this
was det
ermined
to be the key i
mper
ative.
After careful consideration
the
Committee concluded that
the
changes required
to t
he operatio
n of
the Annual
Bonus were
to
:
–
ra
ise the t
arget p
er
form
ance leve
l to align to d
eliver
y at or
above t
he IU a
mbiti
ons;
–
reduce the re
ward
previously a
vailable
for
lower
than “
on
target” per
f
ormance;
–
change the
ﬁnancial bonus
measure from adjust
ed grou
p
PB
IT to s
ales g
rowt
h and adj
usted op
erati
ng proﬁ
t grow
th in
line w
ith the key I
U amb
itions;
–
strengthen and
focus
strateg
ic and opera
tional measures
for th
e Exe
cutive D
irec
tors to a few s
tretch an
d pers
onal
obj
ective
s alig
ned to qua
ntiﬁ
able I
U ambi
tions
, reﬂ
ectin
g
per
son
al are
as of ac
count
abili
ty. The
se would a
lso rei
nforc
e
our c
ulture a
nd T
r
ust pr
iorit
y; and
–
give
n how fund
ament
al ESG i
s to our DN
A and suc
ces
s, it i
s
imp
or
tant to re
cogni
se this t
hroug
h a spec
iﬁc pe
rf
orman
ce
co
nditio
n to incen
tivis
e incr
ement
al year o
n year
improv
ements
against
our pu
blic ambit
ions.
We have signi
ﬁc
antly re
duce
d the pay op
por
tunit
y for le
ss tha
n
“on
target” performance. The Commit
t
ee there
fore ag
reed it
was i
mpor
ta
nt to ince
ntivis
e and rewa
rd tru
ly excep
tiona
l
per
fo
rmanc
e, on th
e occ
asio
ns it is ac
hieved
, to reinfo
rce the
step c
hange i
n per
form
ance c
ulture
. As a re
sult, o
ne key poli
cy
cha
nge to the A
nnual B
onus i
s propo
sed.
Th
e curre
nt bonu
s max
imum of u
p to 200% o
f sala
ry, pai
d 50%
in c
ash an
d 50% in s
hare
s defer
red for t
hree ye
ars
, will be
maintained.
Th
e chang
e we are pro
posi
ng is an ad
ditio
nal opp
or
tunit
y for
mater
ial ou
tper
for
manc
e of our IU a
mbiti
ons of up to a f
urt
her
1
00% o
f sala
ry. Thi
s mean
s that the m
ax
imum pote
ntial a
nnual
bon
us oppo
rtu
nity w
ill be 3
00% o
f sala
ry. Howeve
r
, t
his
add
ition
al elem
ent cou
ld only b
e achieve
d if our p
ublic
ambitions for
more than 5
% sales growth and more t
han 1
0
%
adjusted
operating
proﬁt growth were
signiﬁcantly ex
ceeded
bringing sign
iﬁcant shareholder value.
T
o support increased alignment with
shareholders, we are
pro
posi
ng that any b
onus ea
rned i
n exces
s of 200
% of sa
lar
y
(ie th
e ma
ximum un
der the c
urre
nt Remun
erati
on poli
cy
) up to
30
0% of s
alar
y (the prop
osed m
ax
imum) would b
e delive
red
full
y in sha
res de
ferre
d for thre
e year
s. Ha
lf of any b
onus ea
rned
up to 200
% of sa
lar
y will c
ontin
ue to be defe
rred i
nto shar
es for
thr
ee year
s. T
his mea
ns that in t
he event ma
nagem
ent’s
per
f
ormance was such
that
the IU ambition
s were
signiﬁcantly
exce
eded a
nd the in
crea
sed ma
xi
mum bon
us was e
arne
d, only
1
00% o
f bas
e sala
ry wo
uld be de
livere
d in ca
sh wit
h the
bal
ance b
eing de
ferr
ed into GS
K shar
es for th
ree yea
rs.
In d
evelopi
ng the new r
emuner
ation p
olicy, we eng
aged
extensively
with shareh
olders t
o gain
their
views
and feedba
ck
for w
hich the C
omm
itte
e is ver
y gratef
ul. As a re
sult o
f this we
made some a
djustments
to
our approach
to
quantum
and clarity
of the p
er
form
ance me
asu
remen
t that feat
ure in the ﬁ
nal
pro
pose
d polic
y
. W
e are pl
eas
ed that th
is proc
ess h
as all
owed
us to deve
lop a rem
unera
tion str
uctur
e that wor
ks for bot
h the
co
mpany an
d our sha
rehol
ders a
s we enter a n
ew phas
e for the
business post demerger
.
It i
s impor
ta
nt to note that to ac
hieve the n
ew ma
ximum
, annua
l
sa
les gr
owth a
nd adju
sted op
eratin
g proﬁ
t grow
th would e
ach
be re
quire
d to be at lea
st 5 pe
rcen
tage po
ints ab
ove their
respective targets. It is
acknowledged tha
t such
per
f
ormance is
not ex
pecte
d to be a freq
uent oc
curr
ence
. However, if achi
eved
the C
ommi
ttee b
elieve it s
hould b
e appro
priate
ly rewar
ded
give
n the add
itiona
l value th
at would b
e delive
red to inves
tors
,
pati
ents an
d our peo
ple.
In th
e event the A
nnual B
onus ﬁ
nanci
al me
asur
es are no
t
ach
ieved the C
ommi
ttee wo
uld con
sider t
he appr
opri
atenes
s of
the ot
her mea
sure
s payin
g out.
In te
rms of c
ompeti
tivene
ss
, for our C
EO
, Emm
a W
alms
ley
, if
the m
ax
imum opp
or
tunit
y was e
arned a
s a res
ult of de
liveri
ng
the ex
ceptional performance required t
o reach
this, her
ov
erall
co
mpens
ation p
acka
ge would b
e in the bot
tom qua
rt
ile ver
sus
our global pharmaceutical comparator
group. This assumes
pee
rs in th
is grou
p only ac
hieve tar
get bon
us. T
his gro
up
inc
lude
s compa
nies l
isted in t
he UK a
nd Europ
e.
Pos
t demer
ger, as a F
TSE 20 c
ompa
ny
, new GSK w
ill
pur
sue an a
mbiti
ous grow
th s
trategy f
ocuse
d purel
y on
biopharmaceuticals
.
It will compete
for talent
in the
highly
competitive global
pharmaceutical and biopharmaceutical
se
ctor whe
re remu
nerat
ion level
s can si
gniﬁ
cant
ly exce
ed thos
e
se
en in the U
K
. The pro
pose
d chan
ge to Annu
al Bonu
s has
been designed
t
o strik
e
a pragma
tic
balance be
tween
sha
reho
lder ex
pect
ations fo
r a UK lis
ted bus
ines
s and the
co
mmerc
ial im
perati
ve and du
ty that t
he Com
mit
tee has to
ens
ure the c
ompa
ny can se
cure an
d reta
in the be
st tal
ent. T
he
additional proposed
Annual Bonus
opportunity will only be
awarded
for e
xceptional
outperformance which will und
erpin
delivery of signiﬁcant gro
wth and shareholder v
alue.
Our r
emune
ratio
n arra
ngeme
nts wit
h the enh
ance
d Annua
l
Bonus opportunity still remain
ov
erwhelmingly weight
ed t
o
delivery of long-
term
performance. The Commit
t
ee is
therefore
co
nﬁde
nt that thi
s chang
e to the Ann
ual Bo
nus is in th
e best
long-t
erm int
erests of
the compan
y and
our shareholders.
12
2
GS
K Ann
ual R
epor
t 2021
Remuneration policy implement
ation for 2022
Annual Bonus and L
TI performance measures
We are pro
posi
ng to imple
ment c
hange
s to our Ann
ual Bo
nus
and L
TI m
easu
res go
ing for
war
d to align th
em with o
ur IU
amb
ition
s and T
rust p
riori
ty. The
se metr
ics w
ill give gr
eater
link
age be
twee
n our lon
g- and sh
or
t
-term me
asur
es. T
hey als
o
ens
ure we have a foc
us on bot
h t
op lin
e and bot
tom lin
e grow
th
whi
ch are c
ritic
al to ach
ieving o
ur IU am
bitio
ns as wel
l as
ens
uring we h
ave a sharp f
ocus on o
ur stra
t
egi
c prio
ritie
s
including pipeline, culture
and ESG.
For 2022
, the:
–
Annu
al Bonu
s measu
res will b
e:
annua
l T
otal Sal
es gro
wth
(
30%
)
; an
nual A
djust
ed Operat
ing Proﬁt
gro
wth (
30%
)
;
str
ategic a
nd oper
ation
al (
30
%
)
; ESG - H
uman Ca
pita
l
Ma
nagem
ent: Inc
lusio
n & Diver
sit
y (I&
D
) (
1
0%).
–
L
TI m
easur
es will be:
R
elati
ve TSR (30%), T
ot
al Sal
es
grow
th over 3 ye
ars (20%); Adjus
ted Ope
rating P
roﬁ
t grow
th
over 3 ye
ars (20%)
; Pip
eline P
rogr
ess (20%); and ESG:
Environm
ent Composite
Scorecard (
1
0
%
).
Th
e Comm
itte
e will agr
ee a few key str
etch str
ategic an
d
ope
ratio
nal obj
ecti
ves for ea
ch E
xecuti
ve Dire
ctor. They wil
l
focus particularly o
n individu
al areas of
accountability t
o
und
erpin d
elive
ry of t
he fund
ament
als of ou
r strate
gy in sup
por
t
our ul
timate ﬁn
anci
al suc
ces
s. Fo
r exampl
e, the C
EO and C
SO
wil
l each have c
lear p
ipeli
ne deli
ver
y objec
tives
. Eac
h
exec
utive’s objec
tives w
ill al
so requ
ire dem
onstr
ation of o
ur
Cul
ture and Trust pr
iori
ty. The C
ommi
ttee wi
ll als
o ensur
e that
the measures are q
uantiﬁable, suitably stret
ching
and align
to
the deliv
ery of our pu
blic ambitions. W
e will provide
disclosure
of pe
rfo
rman
ce aga
inst th
ese obj
ecti
ves to rea
ssu
re
shareholders that
they
are stret
ching.
The Corporate Responsibility Commit
t
ee supported the
Committee in the
ke
y considerations
for
the design,
devel
opmen
t and ado
ption of a
n align
ed app
roach to ou
r key
ESG c
ommi
tments f
undam
enta
l to how we oper
ate. We are
intr
oduci
ng a 1
0
% ESG m
easu
re init
ially i
nto both our s
hor
t and
long-t
erm plans, t
o re
ward del
ivery of external ambitions
for
our
T
rust priority
, speciﬁcally
in respect
of Hu
man Capital
Ma
nagem
ent: I&D a
nd our N
ature Ne
t Positi
ve and Cl
imate
Net Z
ero amb
ition
s by 2030.
We chos
e t
o focu
s on an el
ement o
f Human C
apit
al
Ma
nagem
ent for o
ur ﬁrs
t annua
l bonus E
SG mea
sure to
rei
nforc
e delive
ry o
f our publ
ic I&D t
arge
ts. A
n Acce
ss to
Me
dicin
es me
asur
e was co
nside
red, h
owever
, it was a
greed
that g
iven our s
ucce
ss in th
is are
a it would n
ot be a sui
tably
str
etching t
arge
t. Whe
rea
s I&D is a
n impo
rt
ant bus
ines
s
imp
erati
ve and sui
tabl
y stretc
hing ta
rgets c
ould be s
et to
warrant add
itional
reward.
Ea
ch of the t
arget
s set thi
s year ar
e for new GS
K
, they will n
ot
therefore
require adj
ustment f
ollowing
the demerger
. The Board
and t
he Com
mit
tee beli
eve that the p
ropos
als re
pres
ent the
right approach
to
appropriat
ely focus
and re
ward ex
ecutives
to
deliver o
ur public
ambitions
and secure
strong performance for
all our stak
eholders.
Salary
Th
e Comm
itte
e agree
d follow
ing a revi
ew of per
for
manc
e of
E
xecut
ive Dir
ector
s that they s
hould r
ecei
ve a 3.0
% sala
ry
inc
rea
se for 2022 ali
gned wi
th that pr
ovided to t
he wide
r
work
for
ce in ea
ch of the
ir res
pecti
ve geog
raphi
es.
Fol
lowing t
he comp
any’s anno
uncem
ent on 1
9 Janu
ar
y 2022,
Dr H
al Bar
ron wi
ll tran
sitio
n from C
SO to a non
-inde
pende
nt
No
n-E
xecu
tive Dir
ector o
n 3
1 July 2022. T
he Co
mmit
tee
deter
mine
d that give
n Dr Ba
rron ha
d agree
d to rema
in a
Dir
ector h
e shoul
d be tre
ated as a go
od leaver. He wi
ll rec
eive
his ex
istin
g sala
ry u
p to 3
1 July 2022 and a p
ro-r
ated bonu
s for
2022. He w
ill ret
ain his e
xisti
ng long
-
term i
ncen
tive award
s
whi
ch will ve
st sub
ject to p
er
forma
nce an
d on a pro-
rated ba
sis
.
Fro
m 1 August 2022 h
e will re
ceive f
ees as a N
on-
Exe
cutive
Director and,
subject t
o shareholder
approval,
£200,000 per
ann
um in res
pect o
f the add
itiona
l res
ponsi
biliti
es that h
e will
und
er
take for G
SK and R
&D.
Recoupment
Fur
the
r to the alle
gatio
ns notiﬁ
ed to the G
roup in F
ebru
ar
y 202
1
in re
spec
t of Dr M
once
f Slaou
i, a form
er E
xecuti
ve Dire
ctor of
the compan
y
, t
he Committee ex
ercised its d
iscretion and
applied the
claw
back pro
visions under
the R
ecoupment Po
licy
in re
spec
t of pa
st stock i
ncen
tives re
cei
ved by Dr Sl
aoui. I
n
De
cemb
er 202
1
, Dr Slao
ui agre
ed to retur
n to the Gro
up
$
3,8
60,09
0 in the fo
rm of ca
sh und
er the Re
coupm
ent Poli
cy
.
Consumer Healthcare Demerger
W
e are
making strong prog
ress tow
ards the
separation o
f the
co
mpany into n
ew GSK a
nd Hal
eon, a ne
w listed C
onsu
mer
He
althc
are c
ompa
n
y in mi
d-
2022. Th
e new Hal
eon Bo
ard wi
ll
engage with
shareholders on t
he proposed remu
neration
ar
range
ments fo
r the new c
ompany.
AG
M
Fi
nally, I would li
ke to take thi
s oppor
tuni
ty to tha
nk sha
rehol
ders
for th
eir inp
ut and en
gagem
ent dur
ing this R
emune
ration p
olicy
revi
ew
, to help s
hape th
e new poli
cy pres
ented in t
his rep
or
t.
Dur
ing thi
s consu
ltati
on we were pl
eas
ed to be ab
le to engag
e
with appro
ximately
50% of
the compan
y’
s shareholder
register
. I
welcome all
shareholders’
feedback on
this report ahead of
our
AGM
. We look for
war
d to rece
ivin
g your supp
or
t for our new
Remuneration
policy and
Annual report on remunera
tion a
t our
An
nual Ge
nera
l Mee
ting on 4 M
ay 202
2.
Urs Rohner
Remuneration Commi
ttee Chair
28 Feb
ruar
y 2022
GS
K Ann
ual R
epor
t 2021
12
3
Strategic report
Governance and remuneration
Financial st
atements
Investor information
2021 at a glance
2021 T
otal Rem
uneration
Th
e followi
ng shows th
e comp
osit
ion of tota
l remun
erati
on pai
d t
o E
xecut
ive Dir
ector
s in of
ﬁce at 31 Dec
embe
r 202
1
, i
n
re
spec
t of 202
1 and 2020.
£0m
£2m
£4m
£6m
2021
US$0m
US$2m
US$4m
US$6m
US$8m
£8m
US$12m
US$1
0m
Fixed pay – salary, beneﬁts and pension
Emma Walmsley
Performance pay –
annual bonus and LTIs earned in
respect of the three year
performance period ending 31 December 2021
Iain Macka
y
Dr Hal Barro
n
2020
2021
2020
2021
2020
80%
20%
75%
25%
79%
21%
77%
23%
40%
60%
72%
28%
Pay for per
forma
nce
Adjusted Group PBIT
Maximum
(105% of
target)
Target
Threshold
(95% of
target)
2021 Annual bonus: ﬁnancial performance
104
%
[•]
%
Maximum performance target
Performance achieved
Vested
Lapsed
2019 LTI outcome: performance period ended 31 December 2021
R&D new
product
Relative
TSR
Adjusted
free cash
ﬂow
Overall vesting 58%
24.66%
33.33%
0%
E
x
ecutive Dire
ctors’ shar
eholdings (
audited)
0
2x
4x
6x
Dr Hal Barron
Iain Mackay
(1)
Emma Walmsley
8x
10x
SOR
31 December 2021 shareholding
Share ownership vs SOR (multiples of base salary)
3.0x
6.5x
9.9x
5.7
x
0.6
x
3.0x
T
o a
lign th
e intere
sts of E
xecu
tive Dir
ector
s with th
ose
of sh
areho
lder
s, they a
re req
uired to b
uild and m
ainta
in
sig
niﬁc
ant ho
lding
s of shar
es in GS
K over tim
e. E
xecuti
ve
Dir
ector
s are re
quire
d to conti
nue to sati
sf
y thes
e Share
Ow
ner
ship Re
quirem
ents (SOR) by h
oldin
g 1
0
0% of th
eir
SO
R for the ﬁr
st 1
2 m
onths af
ter le
aving GS
K and n
ot les
s
tha
n 50% of th
eir SO
R for mont
hs 1
3
-
2
4 af
ter leavi
ng GS
K.
Executive Directors and GL
T
SOR % of salary
CEO
650
Other Executive Directors
300
Other GS
K Leadership T
eam members
200
(1)
Appointed with effect from 14 January 20
19
12
4
GS
K Ann
ual R
epor
t 2021
Ke
y change: st
ronger link bet
ween short a
nd long-term pe
rforman
ce
–
Annual Bonus and
L
TI per
formance
measures are directly
ali
gned to the I
nvestor U
pdate (I
U) amb
ition
s
–
The measures are complementary by design
to
ensure
in-year performance delivers lon
g-t
erm sustained results
–
An
nual Bo
nus and L
TI p
er
forma
nce c
alibr
ation ha
s bee
n
tough
ened m
eanin
g reduc
ed rewa
rd for be
low tar
get
per
f
ormance and maximum rew
ard only f
or e
xceptional
per
f
ormance
–
Ma
xi
mum ann
ual bon
us oppo
rtu
nity i
ncre
ase
d to 300
%
of s
alar
y (
fro
m 200% o
f sala
ry) to enab
le rec
ognit
ion of
exceptional
outperformance when achiev
ed
–
T
a
rget p
a
yout un
der the a
nnual b
onus of 100% o
f sala
ry
wil
l align w
ith our I
U ambi
tions (i
e. no inc
rea
se for
delivering
our core amb
itions
)
–
Any re
ward fo
r the
incremental e
xceptional
per
f
ormance
opportunity to be del
ivered ful
ly in
shares deferred f
or
thr
ee year
s so as to a
lign to sha
reho
lder ex
peri
ence
, and
–
An
nual Bo
nus and L
TI m
easu
res an
d their a
lignm
ent
wit
h the IU a
mbiti
ons wil
l be ca
scad
ed down to th
e GL
T
and wider organisat
ion
2022 at a glance
How our incent
iv
e measures align to our s
trategy
Performance measur
es
Alignment to strategy
AB
W
eighting
LT
I
W
eighting
Relative total
shareholder return
AB
LT
I
Alignment with shareholders as participants are only rewarded for strong
shareholder returns
–
30%
T
otal s
ales growth
AB
LT
I
T
op line growth to deliver against our I
U ambition of more than 5% sales growth
30%
20%
Adjusted operating
proﬁt growth
AB
LT
I
Bottom line growth to deliver against our I
U ambition of more than
1
0% proﬁt growth
30%
20%
Pipeline
AB
LT
I
Increases the emphasis on Innovation and rewards the acceleration and
strengthening of our pipeline
–
20%
ES
G ambitions
AB
LT
I
Focus on our key ESG ambitions, including our Human Capit
al Management:
I&D priorities and Nature Net Positive and Climate Net Zero 2030 ambitions
10
%
10
%
Strategic and
operational
AB
Focus on key areas of individual accountability to underpin delivery of our
strategy and public ambitions
30%
–
Key
AB
An
nual b
onu
s
LT
I
Long-t
erm incentiv
es
2022 E
xecutive Direc
tor Remunerat
ion
Emma W
almsley
Iain Mackay
Fixed remuneration
Salary
£1,259,855
£915,335
Pension
(% of salary)
W
ill reduce to align with wider workforce by 1 January 2023
Annual bonus
(% of salary)
Maximum opportunity:
200%, with half of any bonus paid in shares
deferred for three years
Incremental Exceptional Performance:
up to an additional 1
00% of
salary paid in shares all deferred for three years
LT
I
(% of salary)
5
75%
400%
Share ownership requirement
(% of salary)
650%
3
00%
Dr H
al Ba
rro
n will t
ran
siti
on to a No
n-E
xe
cuti
ve Dir
ecto
r wit
h eff
ect f
rom 1 Au
gust 2
022.
GS
K Ann
ual R
epor
t 2021
12
5
Strategic report
Governance and remuneration
Financial st
atements
Investor information
2021 T
otal remuneration (audited)
Emma W
almsley
Iain Mackay
Dr Hal Barron
(2)
2021
£000
2020
£000
2021
£000
2020
£000
2021
$000
2020
$000
Fixed pay
Salary
1,223
1,199
889
87
1
1,8
83
1
,7
8
6
Beneﬁts
134
141
242
155
145
58
Pension
245
245
178
17
5
651
1,24
7
T
otal ﬁxed pay
1,6
02
1,585
1,30
9
1,201
2,67
9
3,0
91
Pay for performance
Annual
bonus
(1)
2,275
1,16
9
1
,
573
8
10
3,4
83
1
,74
1
V
esting of L
TI awards:
PSP
(3)
4,326
4,27
7
2,4
08
–
6,371
6,387
T
otal pay for performance
(4)
6,601
5,4
46
3,981
8
10
9,8
54
8,128
T
ot
al remuneration
£8,203
£7
,031
£5,29
0
£2,0
11
$1
2,533
$11,219
Notes:
(1)
Details of the mandatory bonus deferrals in 2021 and 2022 under the Deferred Annual B
onus Plan (D
ABP) are set out on page 14
0.
(2)
From 1 August 2021 Dr B
arron’
s base s
alary increased by 8% to reﬂect the creation of the One R&D organisation. This has brought scientists and governance across
Pharmaceuticals and V
accines together to focus on and invest in what matters most across the Group.
(3)
The 20
19 PSP was valued based on the closing share price on 16 February 2022 of £15.
76 and the closing ADS price of $43.39. Of the vested amounts for the Executive
Directors, the amount attributable to share price appreciation over the performance period was for the C
EO £149,246, the C
FO £83,092 and the CS
O $411,869. The Committee
did not exercise any discretion in relation to the vesting of the awards or share price changes.
(4)
The Committee may in speciﬁc circumstances, and in line with stated principles, apply clawback/malus, as it determines appropriate. Following due consideration by the Committee,
there has been no recovery of sums paid (clawback) or reduction of outstanding awards or vesting levels (malus) applied during 2021 in respect of any of the current Executive
Directors.
202
1 T
ot
a
l remuneration (
audited)
Fixed pay
Salar
y
Beneﬁt
s
Pension
Read more on pages
126 and 127
Pay for per
forma
nce
To
t
a
l
remuneration
cou
ld b
Read more below
Annual bonus
–
Ma
ximum opportunit
y:
200
%
–
Me
asures:
70% Ad
juste
d Grou
p PB
IT
30% Individual
obje
ctives
–
Th
ree ye
ar defe
rra
l of 50%
into
GSK shares
Read more on pages 128 and 129
V
ested L
TI Awar
ds
–
Veste
d at 58%
–
201
9 P
SP awa
rds
–
M
easures:
R&
D new pro
duct
AFCF
Relative
TSR
Read more on page 130
Annual r
ep
ort on r
emuneration
12
6
GS
K Ann
ual R
epor
t 2021
Salary
Th
e table b
elow se
ts out the b
ase s
alar
ies of t
he Ex
ecuti
ve
Dir
ector
s over the l
ast t
wo year
s comp
ared to i
ncrea
ses f
or the
UK a
nd US wor
kfo
rce.
% change
and 2021
effective date
Base salary
2021
2020
Emma W
almsley
£1,223,160
£1,19
9,1
76
Iain Mackay
2% from 1 January
£88
8,6
75
£8
71,250
Dr Hal Barron
$1,821,
781
$1,
7
86,06
0
Dr Hal Barron
(1)
8% from 1 August
$1,96
7
,523
–
U
K & US employees
2% from 1 April
–
–
(
1
)
B
as
e sal
ar
y inc
rea
sed by 8
% fro
m 1 Aug
ust 20
2
1 to re
ﬂec
t the c
reat
ion o
f the
On
e R&D o
rga
nis
atio
n. Th
is ha
s bro
ught s
cie
ntis
ts an
d gove
rna
nce ac
ros
s
Ph
arm
ace
uti
cal
s and Vac
cin
es tog
ethe
r to foc
us on a
nd inve
st in w
hat m
atte
rs
most across the
Group.
Det
ails of s
ala
ry l
evels for 2022 ar
e provid
ed on pag
e 1
3
6.
Beneﬁts
The UK remuneration
reporting regulation
s require
the compan
y
to add i
nto each E
xecu
tive Di
recto
r’
s T
o
tal be
neﬁts c
alc
ulatio
n
all i
tems whi
ch are d
eeme
d by ta
x autho
ritie
s to be a ta
xab
le
ben
eﬁt fo
r them.
These comprise:
–
Emplo
yee
beneﬁts
in li
ne with th
e polic
y for othe
r
emp
loyees
, whi
ch may var
y by loc
ation a
nd role; an
d
–
Business related services
pr
ovided to e
mploye
es to as
sist
or enable them
to
carr
y out
their role,
which a tax authority
ha
s deeme
d to be a ta
xab
le “be
neﬁt
” to the ind
ivid
ual.
Be
caus
e thes
e are bus
ines
s expe
nses
, the co
mpany me
ets
the t
ax w
hich ar
ise
s on them a
nd ther
efore th
e items ar
e
show
n gros
sed up f
or ta
x. T
hese c
an be sp
lit into th
ree ar
eas:
–
Bus
ines
s travel: in
clude
s travel c
osts for t
he E
xecuti
ve
Director and as appropriat
e for
their spouse/
partner
as
soci
ated wit
h acco
mpanyi
ng the E
xecu
tive Di
rector o
n
GS
K busi
ness w
hich a
re dee
med to be ta
xa
ble be
neﬁt
s
for the
Executive Director
.
–
Acc
ommo
datio
n whils
t on busi
nes
s travel.
–
Ot
her ben
eﬁts
.
Th
e table b
elow pr
ovide
s an ana
lysis o
f T
ota
l bene
ﬁts (g
ross
ed
up for t
ax) r
ecei
ved by the E
xec
utive D
irecto
rs in 2021 and
2020.
Th
e followi
ng sec
tions p
rovide d
etail
s of each e
leme
nt of 202
1 ‘T
otal re
muner
ation’
, incl
uding ho
w the Co
mmit
tee impl
emente
d
the a
pproved R
emune
ration p
olicy d
uring t
he year.
Fix
ed pa
y (
audited)
Annual report on remuneration
continued
2021 T
otal remuneration (audited)
continued
2021 Beneﬁts
£000
2020 Beneﬁts
£000
Emma W
almsley
Beneﬁts available to employees
71
62
Business related services
(1)
Business travel
22
36
Other beneﬁts
41
43
T
otal beneﬁts
13
4
141
Iain Mackay
Beneﬁts available to employees
13
1
14
9
Business related services
(1)
Business travel
9
5
Other beneﬁts
(2)
10
2
1
T
otal beneﬁts
242
155
Dr Hal Barron
$000
$000
Beneﬁts available to employees
83
58
Business related services
(1)
Business travel
(3)
63
–
Accommodation whilst on business travel
(4)
(2)
–
Other beneﬁts
1
–
T
otal beneﬁts
14
5
58
Notes:
(
1
)
B
usi
nes
s rel
ated s
er
vic
es w
hich t
ax r
egu
lati
ons d
eem to b
e a ta
xab
le be
neﬁ
t in
th
e UK an
d/or th
e US.
(2)
Ia
in M
ack
ay’s Ot
her b
ene
ﬁts ha
ve inc
rea
sed y
ear o
n year. T
his is m
ain
ly due t
o
me
mbe
rsh
ip of a gl
oba
l bus
ine
ss or
gani
sat
ion w
hich s
upp
or
ts hi
s work a
s CF
O
an
d is not r
eco
gni
sed by U
K HM R
even
ue & Cu
stom
s so is t
here
for
e dee
med to
be a t
ax
abl
e ben
eﬁt
. Thi
s was n
ot inc
urr
ed in 20
20.
(3)
In
cre
ase
d trav
el co
sts c
omp
are
d with 2
020 fol
low
ing ch
ang
es to C
OVI
D-1
9
restric
tions.
(4
)
On
e-o
ff r
efun
d of ac
com
mod
atio
n cos
ts re
lati
ng to pr
ior ye
ar.
GS
K Ann
ual R
epor
t 2021
12
7
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Pensions
Pl
eas
e see det
ails of c
hang
es to pens
ions po
licy on p
age 1
4
5 of the fut
ure poli
cy tab
le and i
ts impl
ement
ation on p
age 1
36.
In a
dditio
n, the C
ommi
ttee p
reviou
sly dete
rmine
d that all c
urre
nt and fu
ture UK a
nd US E
xecu
tive Di
rector
s will h
ave their pe
nsio
n
ar
range
ments a
ligne
d to the wid
er UK a
nd US work
for
ce, a
s appro
priate
, by 1 Janua
ry 2023
.
Executive Director
Member since
Pension arrangements in 2021
Emma W
almsley
Iain Mackay
2
0
10
20
19
Pension contributions of 20% of base salary and matching contributions on the ﬁrst £13,333 of salary
, with a cash
supplement of 20% of base salary in lieu of pension on s
alary in excess of £13,333
(1) (2)
.
Dr Hal Barron
2018
T
he CSO is a member of the 4
0
1(k) plan open to all US employees and the Executive Supplemental Savings Plan
(ES
SP), a savings scheme open to US executives to accrue beneﬁts above the 4
0
1(k) plan limits.
He receives 38% of base s
alary
, less a contribution to the 40
1(k) and ESS
P equivalent to 5% of total base salary
and bonus (net of the bonus deferred under the DABP). In addition, in line with the wider U
S workforce, from 1
January 2021, a combined contribution rate under the 401(k) and ESS
P plans of 11% (7% core contribution plus
a match of up to 4%) of total base salary and bonus (net of the bonus deferred under the DAB
P).
(1)
As a member of the deﬁned contribution plan, Emma W
almsley and Iain Mac
kay are eligible to receive a matching award of up to 5% on the ﬁrst £13,333 of their salaries in
accordance with the terms of the plan.
(2)
Emma W
almsley and Iain Mac
kay receive cash payments in lieu of pension of 20% of base s
alary in excess of £13,333, in line with GSK’
s deﬁned contribution pension plan rates.
Th
e followi
ng tab
le shows th
e brea
kdown of th
e pens
ion valu
es set o
ut on pag
e 1
25. T
he pens
ion re
muner
ation ﬁg
ures h
ave been
ca
lculate
d in acc
orda
nce wi
th the met
hodol
ogy set o
ut in Th
e Lar
ge and M
edium
-size
d Com
panie
s and Gr
oup (Ac
coun
ts and
Reports)
(Amendment
) Regula
tions
2008 (Remun
eration regu
lations
).
Pension r
emuneration values
Emma W
almsley
Iain Mackay
Dr Hal Barron
2021
£000
2020
£000
2021
£000
2020
£000
2021
$000
2020
$000
U
K deﬁned contribution
3
5
3
5
–
–
US deﬁned beneﬁt
–
–
–
–
350
1,059
Employer cash contributions
242
240
17
5
170
301
18
8
T
otal pension remuneration value
245
24
5
17
8
17
5
651
1,24
7
Fur
the
r detai
ls reg
ardin
g the 202
1 pens
ion val
ues for D
r Hal B
arro
n are set o
ut in the t
able b
elow. The pe
nsion
s ﬁgure
s disc
lose
d
for D
r Hal B
arron
, who is a m
embe
r of the US s
tyl
e deﬁn
ed bene
ﬁt pla
ns, a
re in acc
orda
nce wi
th par
agra
ph 1
0
.e.ii of S
ched
ule 8 of
the Remun
eration regu
lations.
Th
e table s
hows the a
ccru
ed ben
eﬁt (ie t
he annu
al pens
ion ac
crue
d to date
). In ac
cord
ance w
ith the Re
muner
ation r
egulati
ons, t
he
pen
sion r
emuner
ation i
n 202
1 was ca
lculate
d as the i
ncre
ase in t
he accr
ued be
neﬁt
, adju
sted for in
ﬂatio
n and mul
tipli
ed by 20 to
reﬂ
ect th
e fact th
at the ben
eﬁt w
ill be re
ceive
d for a numb
er of yea
rs. T
he nor
mal ret
ireme
nt age un
der the C
ash B
alanc
e Pensi
on
Pl
an is age 6
5. The
re is no ad
ditio
nal be
neﬁt fo
r retir
ing ear
ly.
Dr Hal Barron
pension values
Accrued pension
Pension r
emuneration
value for 2021
$000
31 December 2021
$000
31 December 2020
$000
US – Funded
2
2
(6)
US – Unfunded
1
87
158
356
T
otal
189
160
350
Annual report on remuneration
continued
Fixed pay (audited)
continued
12
8
GS
K Ann
ual R
epor
t 2021
2021 performance against targets
For 2021
, the per
for
manc
e mea
sure
s and weig
htings w
ere as fo
llows:
W
eighting
2021 Adjusted Group PB
IT performance
Performance measur
e
Executive Directors
2021 target
Outcome
Positioning
against target
Adjusted Group PB
IT
70
%
£8,25
4m
£8,5
62m
10
4
%
Individual objectives
30%
Thr
esho
ld and m
ax
imum pe
rfo
rman
ce tar
gets wer
e set at 95
% and 1
05% of ta
rget r
espe
ctivel
y
.
Th
e Adjus
t
ed G
roup PB
IT t
arge
t and outc
ome for th
e purp
oses o
f the Ann
ual bon
us cal
culati
on dif
fer fr
om Adju
sted Gr
oup PB
IT
disclosed elsewhere
in this
Annual Report, primarily because both
the target
and out
come nu
mbers are calculat
ed by
applying
GS
K’s budg
et excha
nge rate
s and not ac
tual exc
hange r
ates.
Th
e followi
ng tab
le shows a
ctual b
onuse
s ear
ned co
mpare
d to the bon
us oppo
rtu
nity f
or 202
1
:
2021 bonus opp
ortunity
2021 bonus outcome
Bonus
T
arget
(% of salary)
Maximum
(% of salary)
2021
Base salary
Financial
performance
(% of salary)
Individual
objectives
(% of salary)
T
otal 2021
bonus
(% of salary)
T
otal 2021
bonus
000
Emma W
almsley
£1,223,160
60
18
6
£2,27
5
Iain Mackay
10
0
200
£88
8,6
75
12
6
51
177
£1,57
3
Dr Hal Barron
$1,967
,523
51
17
7
$3,4
83
Det
ails of t
he mand
ator
y defer
ral by E
xecu
tive Di
rector
s into the D
efer
red An
nual Bo
nus Pl
an of 50
% of annua
l bonu
s earn
ed are s
et
out o
n page 1
4
0.
The table below provides more detail on delivery against Adjusted Group P
B
IT:
Financial performance
–
Overall an encouraging performance exceeding updated guidance despite the uncertainties of the C
O
VI
D-19 pandemic.
–
Delivered full-year reported Group sales of £3
4 billion (stable AE
R, +5% CE
R) with strong commercial execution driving CE
R growth
across Pharmaceuticals, V
accines and Consumer Healthcare (excluding brands divested/under review) including C
OVID-19 solutions
sales of £1.4 billion.
–
Adjusted Group PB
IT of £8,83
9 million above target driven by higher sales and effective cost control. Outcome adjusted to exclude the
commercial beneﬁt from COVI
D-19 solutions.
–
Adjusted E
PS of 113.2p (-2% AE
R, +9% CE
R), ahead of guidance including COVI
D-19 solutions, delivery driven by higher sales and
effective cost control.
70
%
Adjusted Group PB
IT
30%
Individual
objectives
Annual bonus
Annual bonus
Pay f
or per
f
ormance (
audited)
Annual report on remuneration
continued
GS
K Ann
ual R
epor
t 2021
12
9
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Th
e followi
ng tab
le summ
aris
es per
for
manc
e agai
nst the s
core
card o
f indiv
idual o
bjec
tives ag
reed by t
he Com
mit
tee for ea
ch
E
xecut
ive Dir
ector, in addi
tion to the
ir cont
ribut
ion to the ﬁ
nanci
al per
for
manc
e for 202
1
:
Individual objectives
Achievements
Emma W
almsley
The Committee determined that the CEO clearly exceeded or met her individual objectives. 2021 was a highly successful year of focus and
acceleration against G
SK’s long-term IPT priorities, and the company exceeded its ﬁnancial t
ar
gets. G
SK is on track for separation to unlock the
potential of two new growth companies in a landmark year for the company in 2022:
Strengthen pipeline and
build G
SK’s r
eputation
for Innovation
–
Continued progress in strengthening and advancing Pharmaceuticals and V
accines pipeline, with 43 potential new
medicines and 21 vaccine candidates in development
–
COVI
D-19 solutions focussed on prevention and treatment, including
Xevudy
(sotrovimab) launc
hed for treatment,
with positive data against Omicron
Drive growth and r
eturn
on investment
–
Delivered E
PS ahead of initial and updated guidance, with sales growth driven by commercial execution excellence.
Pharmaceuticals sales £17
.
7 billion, V
accines £6.8 billion and Consumer Healthcare £9.6 billion
Demonstrate continued
commercial execution
excellence
–
T
ransformed Specialty Medicine commercial capabilities and effectiveness across key markets
–
Exceptional supply chain reliability through continued COVI
D-19 disruption, and continued network strengthening and
simpliﬁcation
Deliver separation
programme milestones
–
All demerger milestones on track.
–
New ambitions set out for new GS
K to deliver a step change in growth and performance, and health impact at scale
Demonstrate strong
Environmental, Social and
Governance (E
SG) credentials
and build trust in future delivery
–
Sustained leading E
SG performance, with delivery against all Global Health, Environment and Inclusion and Diversity
commitments. Maintained sector-leading rankings in key E
SG indices, as well as progress to deliver on climate and
nature commitments
Demonstrate strong cultur
e
and leadership
–
Culture and t
alent to deliver success for both new companies, and strong progress to build a stronger
, more diverse
workforce (40% senior female represent
ation; on trac
k for 2025 gender and race & ethnicity aspirations)
–
Continued development and succession planning for leadership team roles, with internal candidates appointed Chief
Scientiﬁc Ofﬁcer Designate and Chief Digital and T
echnology Ofﬁcer
Iain Mackay
The Committee determined that the CFO successfully met his individual objectives:
Demonstrate ﬁnancial
leadership
–
Strong ﬁnancial leadership, with key role in delivery of Investor Update setting out competitive growth proﬁle for new G
SK
–
Delivered full year reported Group sales of £3
4.1 billion (stable at AE
R, +5% CE
R)
Demonstrate ﬁnancial
oversight and cost discipline
–
Adjusted E
PS of 113.2p (-2% AE
R, +9% CE
R) ahead of updated guidance, delivery supported by cost discipline and
initial savings from scale transformation programme
Deliver separation
programme milestones
–
Separation preparations on track, including corporate ﬁnance and capital market readiness
Demonstrate strong cultur
e
and leadership
–
Strong oversight across Finance and T
ech during transformation, including appointment of new Head of Investor Relations
and Chief Digital and T
echnology Ofﬁcer
Dr Hal Barron
The Committee determined that the CSO successfully met his individual objectives:
Strengthen pipeline and
build G
SK’s r
eputation
for Innovation
–
Continued R&D momentum both in R&D delivery and strengthening of pipeline, with pipeline progress targets exceeded.
12 approvals, 8 Phase I
II st
arts and 6 Phase II st
arts. 43 potential new medicines and 21 vaccine candidates in
development. Business development to augment the pipeline, including: V
ir
, iT
eos, Alector and Halozyme
Drive growth and r
eturn
on investment
–
Continued progress to improve R&D productivity and success rates, including achieving US FDA emergency use
authorisation for
Xevudy
in 13 months from deal signing with V
ir in pre-clinical phase. This medicine has proven effective
against multiple COVI
D-19 variants, including Omicron
–
Creation of One R&D organisation, bringing scientists and governance across Pharmaceuticals and Vaccines together to
focus on and invest in what matters most
Demonstrate strong cultur
e
and leadership
–
Continuing focus on top talent in key roles in R&D (8
0%, with 31% of new talent in key roles external hires). Robust
succession planning, including appointment of new Global Head of V
accines R&D and Global Head of Oncology
Development
Malus and clawback policy
For d
etai
ls of our ex
isting p
olicy o
n malus a
nd claw
back
, ple
ase
refe
r to the com
pany’s 2020 Rem
unerat
ion pol
icy rep
or
t on
pag
e 1
44 of th
e 20
1
9 A
nnual R
epor
t, avai
labl
e on gsk
.com
.
Th
e Comm
itte
e reviews a
nd disc
lose
s whet
her it (or the
Recoupment Committee
) has exercised malus
or clawback.
Disclosure is only
made when
the ma
tter has been
the subject
of pub
lic re
por
ts of mis
cond
uct, w
here i
t has be
en full
y
resolved, where it
is legally
permissible to
disclose and
where
it c
an be ma
de with
out undu
ly prej
udici
ng the co
mpany a
nd
therefore
shareholders.
In li
ne with t
hese d
isclo
sure gu
ideli
nes
, the Co
mmit
tee has
exer
cise
d one ins
tanc
e of clawb
ack dur
ing 202
1
. For fu
rth
er
det
ails on t
his rec
oupm
ent by the C
ommi
ttee pl
eas
e see
p
a
g
e
12
2
.
Annual report on remuneration
continued
Pay for performance (audited)
continued
13
0
GS
K Ann
ual R
epor
t 2021
Performance measur
es
and relative weighting
Outcome and vesting level
Performance targets
Outcome
% of
maximum
% of
award
R&D new product
performance
(1/3rd)
R&D new product sales performance measures aggregate three-year s
ales for new
products launched in the three-year performance period and the preceding two
years, ie20
1
7
-21.
T
arget
% vesting
Maximum
£
12
.
2
5
b
n
1
00%
£
11
.
14
b
n
75%
£10
.
5
8
b
n
5
0%
Thr
eshold
£10
.
0
2
bn
25%
£11.12bn
74
24.6
6
Adjusted free
cash ﬂow
performance
(1/3rd)
In line with the company’
s agreed principles, the AFCF ﬁgures included adjustments
for a number of material distorting items, including legal settlements, exchange rate
movements and special pension contributions.
Original
target
Revised
target
(
1)
% vesting
Maximum
£13.91bn
£13.20bn
1
00%
£13.31bn
£12.63bn
75%
£12.1
0bn
£11.4
8bn
50%
Thr
eshold
£11.
7
4bn
£11.14bn
25%
(1)
The revised target has been further adjusted since the 2020 Annual Report as noted above.
£14.53bn
10
0
33.33
Relative TS
R
performance
(1/3rd)
TS
R ranking within comparator gr
oup
(
2)
% vesting
Maximum
1st, 2nd, 3rd
1
00%
4th
70
%
5th
40%
Thr
eshold
(
3)
Median
25%
6th to 1
0th
0%
(2)
TSR comparator group: AstraZeneca, Bristol-Myers Squibb, Eli Lilly, GSK,
Johnson&Johnson, Merck & Co, Novartis, Pﬁzer
, Roc
he Holdings and Sanoﬁ.
(3)
The vesting schedule is based on delivering 25% vesting for median performance.
In a comparator group of ten companies, median falls between two companies.
Ranked 1
0th
0
0
T
otal ve
st
ing in re
spec
t of 20
1
9 aw
ards
58%
5
7
.99%
Other policies
For d
etai
ls of our ex
isting p
olici
es on r
ecrui
tment r
emune
ration
, los
s of of
ﬁce a
nd termi
nation p
ayment
s, ple
ase r
efer to the
2020 Rem
unerat
ion pol
icy rep
or
t on page
s 1
4
1 to 1
50 of th
e 20
1
9 A
nnual Re
por
t, avai
lable o
n gsk
.com
. No cha
nges to ou
r loss o
f
of
ﬁc
e polic
y are pro
pose
d in the 2022 Rem
unera
tion po
licy.
V
alue earned fr
om long-term incentives (L
TIs)
Th
e followi
ng tab
les set o
ut the pe
rf
orman
ce ach
ieved aga
inst th
e targ
ets set fo
r the com
pany’s L
T
I pla
ns and al
so incl
udes
an up
date on pe
rfo
rman
ce of out
stan
ding awar
ds.
In li
ne with t
he Co
mmit
tee’
s agre
ed pri
ncipl
es, fo
r each m
easu
re appl
icab
le to the L
TI awar
ds, ac
tual p
erf
orma
nce aga
inst
the t
arget
s is revi
ewed and ad
justm
ents ma
de as ap
propr
iate to ensu
re that th
e vestin
g outcom
e reﬂe
cts ge
nuine un
derl
ying
bus
ines
s per
for
manc
e and that r
esult
s are be
ing deli
vered i
n line wi
th our Cu
lture an
d T
ru
st bus
ines
s prio
rit
y
.
201
9 PS
P awards with a performance period ended 31 December 2021
Th
e Comm
itte
e reviewe
d the per
for
manc
e of the P
SP award
s gran
ted to Exe
cutive D
irec
tors ag
ains
t the tar
gets se
t. The A
djuste
d
fre
e cas
h ﬂow (A
FCF
) ta
rget wa
s revise
d in line w
ith the d
isclo
sure o
n page 1
2
1 o
f the 2020 Ann
ual Rep
or
t. It h
as bee
n fur
ther
re
stated to t
ake acc
ount of th
e revise
d pha
sing of th
e Future R
eady p
rogra
mme re
stru
cturi
ng cas
h payme
nts, s
epar
ation co
sts an
d
revi
sed ti
ming of di
vestm
ents ba
sed on d
etail
ed pro
gram
me and se
parat
ion pla
nning u
nder
take
n in 202
1
. As a res
ult, th
e targ
et was
inc
rea
sed by £0
.2
1 bill
ion to £1
1
.48 bi
llion
.
For 2021
, the 20
1
9 PSP wa
s value
d bas
ed on the c
losin
g shar
e pric
e on 1
6 F
ebru
ar
y 2022 of £
1
5
.
7
6 and th
e clos
ing AD
S pric
e of
$
43.
39. O
f the veste
d amoun
ts for the E
xec
utive Di
recto
rs, th
e amou
nt attr
ibuta
ble to sha
re pri
ce app
reci
ation over t
he per
for
manc
e
per
iod wa
s for the C
EO £
1
49,246, t
he CFO £
83
,092 an
d the CS
O $4
1
1
,869
. The C
ommit
tee did n
ot exerc
ise any di
scret
ion in
rel
ation to th
e vestin
g of the awar
ds or sha
re pri
ce cha
nges
.
Th
e per
form
ance ac
hieved i
n the thre
e year
s to 3
1 Dece
mber 2021 and th
e vestin
g levels ar
e set out i
n the ta
ble bel
ow
.
Pay for performance (audited)
continued
Annual report on remuneration
continued
GS
K Ann
ual R
epor
t 2021
13
1
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Update on performance of ongoing L
TI awards
Th
e Comm
itte
e also rev
iewed th
e per
form
ance o
f the PS
P awards g
ranted to E
xec
utive D
irecto
rs in 2020 an
d 202
1
.
Th
e followi
ng char
ts p
rovide a
n esti
mate of the ve
sting l
evels ta
king i
nto acco
unt per
for
manc
e to 3
1 Dece
mber 2021
. Actual
ves
ting level
s will on
ly be dete
rmine
d bas
ed on pe
rfo
rman
ce over the f
ull thre
e-ye
ar per
for
manc
e peri
ods. T
he ind
icati
ons bel
ow
sho
uld ther
efore n
ot be reg
arde
d as pre
dicti
ons of th
e ﬁnal ve
sting l
evels. T
he AF
CF thr
esho
ld and a
ssoc
iated ve
sting s
cale
s for
the 2020 a
nd 202
1 PSP awa
rds have b
een adj
usted
. The net ove
rall i
mpact i
s an incr
eas
e of £0.
1
7 bill
ion to £1
0.0
9 billi
on for the
2020 award a
nd an in
crea
se £0
.40 bill
ion to £
8.66 bi
llion fo
r the 202
1 award
.
Th
ese ad
justme
nts are to t
ake acc
ount of th
e follow
ing item
s
: revi
sed ph
asing o
f the Futu
re Read
y progr
amme r
estr
uctur
ing ca
sh
paym
ents ba
sed on d
etai
led pro
gram
me pla
nning un
der
taken i
n 202
1
, a
nd revis
ed div
idend
s to non-c
ontro
lling in
teres
ts (V
iiV
Shionogi and
P
ﬁz
er
).
Th
ere are n
o chang
es to the t
arget
s set for th
e Innovati
on sa
les (
previo
usly n
amed R&
D new pro
duct) or th
e relati
ve TSR
per
fo
rmanc
e mea
sure
s for the 2020 an
d 202
1 awards
.
Maximum
Threshold
2020 PSP award
Estimated vesting level
Estimated lapsing level
Innovation
sales
(20%)
Adjusted free
cash ﬂow
(30%)
Relative
TSR
(30%)
Ranked 3rd
or above
£9.96bn
122% of
threshold
Pivotal trial
starts
2021 PSP award
Median
£8.66bn
Commercially
sensitive
Commercially
sensitive
Major
regulatory
approval
milestones
Pipeline progress
(20%)
Innovation
sales
(20%)
Adjusted free
cash ﬂow
(30%)
Relative
TSR
(30%)
Ranked 3rd
or above
£11.60bn
122% of
threshold
Pivotal trial
starts
Median
£10.09bn
Commercially
sensitive
Commercially
sensitive
Major
regulatory
approval
milestones
Pipeline progress
(20%)
For t
hres
hold pe
rfo
rman
ce 25% of e
ach award w
ill ves
t in res
pect o
f each p
er
forma
nce me
asur
e. Ind
ividu
al 2020 L
T
I award l
evels
app
ear on p
age 1
21 of the 2020 A
nnua
l Repor
t. T
hey are s
et out be
low for the 2021 L
T
I award
s.
V
esting %
Y
ear of
grant
Relative TS
R
Adjusted free
cash ﬂow
R&D new
product
Business
diversiﬁcation
Lapsed
%
T
otal vested
%
20
11
0
13
16
11
60
40
20
12
0
0
7
7
86
14
20
13
0
0
21
17
62
38
20
14
0
0
33
67
33
20
15
15
21
33
31
69
20
16
0
26
33
41
59
2
017
0
33
33
33
67
20
18
0
33
33
33
67
20
19
0
33
25
42
58
Historical vesting for L
TI plans
Annual report on remuneration
continued
Pay for performance (audited)
continued
2021 L
TI awards
Th
e 202
1 D
AB
P awards (i
n resp
ect of th
e defer
ral of 2020 b
onus) and the 2021 PSP aw
ards ar
e shown i
n the ta
ble bel
ow
.
2021 DABP awards
2021 PSP awards
2020
% of total b
onus
deferred
Number of
shares
Face value
of award
(1)
Awar
d level as %
of base salary
Number of
shares
Face value
of award
(2)(3)
Emma W
almsley
45,
7
7
9 shares
£0.5
85m
5
75%
55
0,
7
5
7 shares
£7
.0m
Iain Mackay
50%
31,
725 shar
es
£0.405m
4
00%
278,363 shares
£3.6m
Dr Hal Barron
24,35
5 ADS
$0.8
71m
500%
254,7
94 ADS
$9.1m
(1)
The face values of the DABP awards have been calculated based on a share price of £12.
7
7 and an ADS price of $35.
75, being the closing prices on 9 February 2021 (the day before
grant)
. These are nil-cost options for the UK Executive Directors and restricted shares for the US Executive Director. No performance conditions are attached to the DABP awards,
as they reﬂect the mandatory 3 year deferrals in respect of the 2020 annual bonus earned.
(2)
The face values of the PSP awards have been calculated based on a share price of £12.
7
7
, and an ADS price of $35.
75, being the closing prices on 9 F
ebru
ary 20
21 (the day
before grant). These are conditional shares, based on the performance measures outlined above.
(3)
The performance period for the 2021 PSP awards is from 1 January 2021 to 31 December 2023. Awards vest at 25% of maximum for threshold performance.
13
2
GS
K Ann
ual R
epor
t 2021
Direc
t
ors’ pa
y in a wi
der set
ting
Annual report on remuneration
continued
Internal context
In s
etti
ng execu
tive pay it i
s impor
ta
nt that the C
omm
ittee a
nd I do so w
ith a goo
d under
sta
nding of o
ur wid
er work
forc
e pay
. T
o
that e
nd on an an
nual b
asis I m
eet wit
h our Hum
an Res
ource
s Bus
ines
s Lead
ers of G
loba
l Supp
ort F
uncti
ons, P
harm
aceu
tica
ls,
Vii
V Hea
lthc
are, Vacc
ines a
nd Con
sumer H
eal
thcar
e to under
sta
nd per
spec
tives o
n pay and GS
K’s rem
uner
ation pa
ckag
e for
the w
ider wor
kfo
rce. T
his yea
r was the t
hird su
ch annu
al meet
ing I have hel
d. I was p
leas
ed to dis
cuss p
rogre
ss on th
e Grou
p
’s
hum
an cap
ital m
anage
ment an
d I&D ag
enda to at
trac
t and ret
ain di
verse t
alen
t which l
ies at th
e hear
t of th
e compa
ny’s
fun
damen
tal co
mmitm
ent to the eq
uit
y of its em
ployme
nt and rew
ard pr
actic
es.
At the m
eeting
, we cover
ed the cur
rent Re
ward envi
ronme
nt for em
ployee
s acros
s the ente
rpri
se and no
tabl
e globa
l comp
etitive
challenges facing
the compan
y;
namely:
–
Co
mpeti
tive pre
ssu
res for i
n-hig
h deman
d skil
ls in our b
usine
sse
s and the a
ction
s taken to at
trac
t and ret
ain key ta
lent in
the
se are
as
–
Ha
ndling d
if
ferent p
ay levels ac
ross t
he Grou
p and in di
ffe
rent ge
ogra
phie
s. Th
is incl
uded w
here th
e compa
ny was
exp
erie
ncing p
art
icula
r pay chal
lenge
s curr
ently o
r were ant
icipate
d to exper
ienc
e in the fu
ture and t
he miti
gator
y steps t
hat
were b
eing t
aken to add
ress t
hese
–
Pr
epar
ation of a c
ompet
itive Rewa
rd str
ategy an
d progr
amme
s for the C
onsu
mer co
mpany for i
mplem
entat
ion af
ter the
demerger
–
Progress against the
company’
s pu
blicly disclosed gen
der and e
thnically div
erse leader aspirations. W
e discussed the
cou
ntr
y-ba
sed rev
iews and t
he cle
ar guid
ance
, tools an
d suppo
rt p
rovide
d to marke
ts to ensur
e pay equi
ty
Fi
nally, Dame V
ivi
enne C
ox, our Work
for
ce Eng
ageme
nt Dire
ctor an
d membe
r of the C
ommit
tee, e
nsure
s that em
ployee vi
ews
and p
ers
pecti
ves on pay a
nd rewar
d are re
ﬂecte
d in the C
ommit
tee’s discu
ssi
ons.
Urs Rohner
Remuneration Commi
ttee Chair
Remuneration structure for employees during 2021
Element
Wider workfor
ce pay
Comparison with Executive Director and GL
T pay
Salary
–
The market competitiveness of salaries across the company
is assessed at a local market level. The competitiveness of
roles, which is measured against the external market and
internal peers, is kept under regular review
–
For our Executive Directors and for the G
L
T
, ordinarily
following a performance review
, increases in base salaries
are in line with the average of the wider employee
population unless there is a change in scope of the
individual’
s role, responsibilities or experience
Pensions
and
beneﬁts
–
The company seeks to provide an appropriate pensions
and beneﬁts package that is aligned to competitive
market practices in those countries in which the
company operates and our employees are based
–
Our Executive Directors and the G
L
T are eligible to
receive beneﬁts broadly in line with the policy for our other
employees, which may vary by location
–
Pension arrangements are structured in accordance with
where our Executive Director or G
L
T member is expected
to retire. Current and future U
K and US Executive
Directors will have their pension arrangements aligned to
the wider U
K and US workforce by 1 January 2023
Annual
bonus
–
W
ith the exception of our sales force, who participate in
separate arrangements, our wider workforce participates
in a plan based on performance against four business
and ﬁnancial measures (three measures for Consumer
Healthcare). This is structured to reﬂect the priorities of
the speciﬁc business area
–
This plan is designed to reward our employees’
collective
contribution to business achievement. Separate
mechanisms are in place to recognise outstanding
individual performance or to address under-performance
–
Our Executive Directors and the G
L
T participate in a plan
based on an assessment of a combination of stretching
ﬁnancial / business and personal objectives
–
Our Executive Directors are required to defer 50% –
and the G
L
T 25% – of any bonus earned into shares or
ADSs as appropriate for three years
–
Clawback and/or malus provisions apply
L
TI plans
–
Our employees at Senior V
ice President (S
VP) and V
ice
President (VP) level participate in the same P
SP as our
Executive Directors and the G
L
T with the same
performance targets and periods
–
Clawback and/or malus provisions apply
–
Our SVP and VP employees, together with Directors and
Managers below the G
L
T
, receive annual Share V
alue
Plan awards of restricted shares
–
Our Executive Directors and the G
L
T are granted annual
PS
P awards with the same performance targets and
periods
–
Our Executive Directors are required to hold vested
awards for an additional two-year period
–
Clawback and/or malus provisions apply
–
Our Executive Directors and the G
L
T do not receive Share
V
alue Plan awards following appointment
GS
K Ann
ual R
epor
t 2021
13
3
Strategic report
Governance and remuneration
Financial st
atements
Investor information
CEO pay ratios
Financial year
Methodology
(Lower
Quartile)
P25
(Median)
P50
(Upper
Quartile)
P75
2021
Option A
154:1
1
08:1
67:1
2020
130:1
96:1
62:1
20
19
16
0:1
119:1
7
3:1
Th
e pay ratio
s above ar
e calc
ulated us
ing ac
tual ea
rning
s for
the C
EO and UK e
mploye
es. T
he CEO tot
al singl
e ﬁgur
e
rem
unera
tion of £
8,
203,422 for 2021 and £7
,0
3
1,87
1 for
2020 are d
etail
ed on pa
ge 1
25 of th
is Repo
rt
.
T
o
tal re
muner
ation for a
ll UK f
ull-time e
quiva
lent em
ployee
s of
the c
ompa
ny on 3
1 Dec
ember 2021 has b
een c
alcul
ated in lin
e
with the sin
gle ﬁgure met
hodology
, ex
cept for
employer
pension
co
ntribu
tions fo
r employe
es wi
th a Deﬁ
ned Be
neﬁt p
ensio
n due
to the c
ost and c
ompl
exit
y of suc
h calc
ulatio
ns. I
nstead
, the
Futu
re Ser
vi
ce Rate agr
eed at th
e most r
ecen
t actuar
ial fu
nding
valu
ation ha
s bee
n used fo
r thes
e employe
es. O
ther
wi
se this
reﬂ
ects t
heir ac
tual e
arnin
gs rec
eived i
n 202
1 (exclu
ding
bus
ines
s expe
nses), whic
h were use
d to produ
ce the p
erce
ntile
calculation un
der Option
A of
the Remu
neration reg
ulations.
Bu
sines
s expe
nses h
ave been exc
luded a
s they ar
e reimb
urse
d
to emp
loyees a
nd not su
fﬁ
cient
ly subs
tanti
al in val
ue to
sig
niﬁc
antl
y impac
t the rati
os.
GS
K conti
nues to ch
oose O
ption A b
ecau
se it is t
he most
rob
ust and s
tatis
tica
lly ac
curate way for t
he com
pany to
ca
lculate t
he thre
e ratios f
rom the o
ptions ava
ilabl
e in the
Remuneration
regulation
s. The increase in t
he pa
y ratio
for
202
1 is du
e t
o a hig
her level o
f bonus r
ecei
ved com
pare
d to
2020, re
ﬂect
ing high
er bus
ines
s and ind
ividu
al per
for
manc
e.
Set o
ut in the t
able b
elow are t
he bas
e sal
ar
y
, and tota
l pay and
ben
eﬁts fo
r each o
f the per
centi
les
.
2021
2020
2
0
19
2021
2020
2
0
19
2021
2020
2
0
19
£
P25
P50
P75
Salary
37
,251
3
6,924
34,51
0
51,492
5
0,000
47
,029
72
,
997
70,203
66,5
61
T
otal
pay and
beneﬁts
53,151
54,133
50,4
6
7
76,234
73,340
68,200
122,852
113,830
11
0,638
Th
e Comm
itte
e believe
s that the m
edia
n pay ratio i
s cons
istent
with the
company’
s pay
,
reward
and p
rogression policies.
Th
e base s
ala
ries of a
ll emp
loyees
, inclu
ding th
e Exe
cutive
Dir
ector
s, ar
e set wi
th refer
ence to a r
ange of f
actor
s inclu
ding
mar
ket pra
ctice
, expe
rienc
e and pe
rf
orma
nce in ro
le.
Supplemental/Additional ratios
GS
K’s CEO pay r
atio is like
ly to var
y
, potent
ially s
igni
ﬁca
ntly, over
tim
e since i
t will b
e driven l
arge
ly by CEO var
iabl
e pay outco
mes
.
In li
ne with o
ur rewar
d princ
iple
s, the C
EO has a la
rger p
or
tion of
her p
ay base
d on per
for
manc
e than th
e indiv
idua
ls at P25, P
50
and P
7
5. Th
is mea
ns that de
pendi
ng on GS
K’s per
for
manc
e the
rati
o coul
d incre
ase o
r decre
ase s
igni
ﬁca
ntly. The C
ommit
tee
bel
ieves tha
t our sen
ior exec
utives s
hould h
ave a signi
ﬁca
nt
proportion of their
pay
directly lin
ked t
o performance.
In li
ght of thi
s we have also p
rovid
ed supp
leme
ntal ra
tios
,
whe
re L
T
I com
pens
ation ha
s bee
n exclud
ed. We beli
eve
this p
rovid
es an ad
dition
al view a
s L
T
Is for
med a su
bsta
ntial
percentage of t
he CEO
’
s t
otal remunera
tion, which
is highly
variable and
dependent on
business performance. The CEO
202
1 total remu
neration e
xcludin
g L
TI compensation is
£
3
,
8
7
7,
6
17.
Financial Y
ear
Methodology
P25
P5
0
P75
2021
Option A*
7
3:1
51:1
3
4:1
2020
51:1
3
8:1
26:1
20
19
65:1
4
8:1
32:1
* T
otal remuneration less vesting of long-term incentive awards.
Historic CEO remuneration
Emma W
almsley
£0
0
0
2021
2020
20
19
2018
2
017
T
otal remuneration
8,203
7
,031
8,0
94
5,887
4,883
(1)
Annual bonus award
(2)
(% of maximum)
93%
49%
79%
93%
77
%
V
esting of L
TI awards (% of maximum)
58%
67
%
67
%
59%
6
9%
Sir Andrew W
itty
£0
0
0
2
017
2016
20
15
2014
2013
T
otal remuneration
715
(2)
6,830
6,6
61
3,902
7
,207
Annual bonus award
(2)
(% of maximum)
0%
(2)
97
%
1
00%
42%
88%
V
esting of L
TI awards (% of maximum)
0%
(3)
33%
3
8%
14%
31%
(1)
Emma Walmsley’
s tot
al remuneration includes her pay for the period 1 January
to 31 March 20
1
7
, before she became CE
O.
(2)
Sir Andrew Witty received a pro-rata payment for 201
7 in lieu of a variable bonus
opportunity
, in accordance with the 20
14 Remuneration policy
.
(3)
P
SP and DABP awards for Sir Andrew Witty granted in 20
15 did not vest until April
20
18, in accordance with the terms of the Executive ﬁnancial recoupment policy
.
Annual report on remuneration
continued
Directors’
pay in a wider setting
continued
13
4
GS
K Ann
ual R
epor
t 2021
Per
centage change in r
emuneration of Directors
2021 percentage change
2020 percentage change
Salary/fee
%
Beneﬁts
%
Bonus
%
Salary/fee
%
Beneﬁts
%
Bonus
%
U
K Employees
(1)
2.0
0.0
4.85
2.5
0.0
1.1
Executive Directors
(2,3)
Emma W
almsley
2.0
(5.0)
9
4.6
8.0
(26.6)
(33.4)
Iain Mackay
2.0
5
6.1
94.2
5.6
11.5
(31.6)
Dr Hal Barron
5.4
150.0
1
00.1
2.5
(91.2)
(34.9)
Non-Executive Directors
(2,4)
Sir Jonathan Symonds
–
50.0
–
201.
7
0.0
–
Charles Bancroft
(5)
156.1
–
–
–
–
–
V
indi Banga
(4.6)
(50.0)
–
23.6
(50.0)
–
Dr Anne Beal
(5)
–
–
–
–
–
–
Dame V
ivienne Cox
(5.6)
(50.0)
–
55.4
(75.0)
–
L
ynn Elsenhans
(7
.3)
(75.0)
–
(12.3)
(73.3)
–
Dr Laurie Glimcher
(8.3)
(61.8)
–
(18.2)
(55.3)
–
Dr Jesse Goodman
(5.6)
–
–
(12.5)
(65.2)
–
Urs Rohner
(5.6)
1
75.0
–
16.3
(6
9.2)
–
Judy Lewent
(6)
(7
3.8)
(25.0)
–
(1
7
.6)
(85.4)
–
(1)
The UK employee population was considered to be the most relevant comparison as it most closely reﬂects the economic environment encountered by the majority of the Executive
Directors.
(2)
Percentage changes have been calculated based on the 2021 T
otal remuneration table on page 125 for Executive Directors and the 2021 T
otal fees table on page 139 for
Non-Executive Directors.
(3)
Further information on salary and beneﬁts for Executive Directors can be found on page 126. Further information on annual bonus for Executive Directors can be found on page 128.
(4)
Fees of Non-Executive Directors include fees received as cash and in the form of shares or ADS under the terms of the Non-Executive Directors’
share allocation plan.
(5)
Charles Bancroft and Dr Anne Beal were appointed to the B
oard on 1 May 2020 and 6 May 2021 respectively
.
(6)
Judy Lewent retired from the Board on 5 May 2021.
Directors’
pay in a wider setting
continued
Annual report on remuneration
continued
Par
tic
ipant
s of the co
mpany
’
s Shar
e Save plan m
ay save up to
£250 a m
onth for th
ree yea
rs and at t
he end of th
e peri
od have
the o
ption to bu
y GSK sh
ares a
t a 20% dis
count to th
e shar
e
pri
ce at the s
tar
t of the s
aving
s contr
act. P
art
icipa
nts of the
Sha
re Rewar
d plan c
ontri
bute up to £1
25 a mon
th to purch
ase
GS
K shar
es whi
ch the co
mpany th
en match
es.
For f
ur
ther det
ails s
ee page 1
40.
Dilution limits
All aw
ards are mad
e under
plans which i
ncorporate d
ilution
limi
ts con
sisten
t with th
e guidel
ines pu
blish
ed by the I
nvestm
ent
As
soci
ation
. Thes
e limit
s are 1
0% in a
ny rolling te
n-yea
r peri
od
for a
ll plans a
nd 5% in any r
olling te
n-yea
r peri
od for exec
utive
sha
re pla
ns (gr
anted to se
nior exe
cutive
s
). Esti
mated dil
ution
fro
m exist
ing award
s made over t
he las
t ten year
s up to 3
1
De
cemb
er 202
1 is as fo
llows:
All G
SK em
ployee sh
are pla
ns
04
02
0
08
06
10
10
%
1.
56
%
Execut
iv
e share plans
04
02
0
Actual
Limit
5%
1.
22
%
10
%
Relative import
ance of spend on pay
Th
e table s
hows tota
l empl
oyee pay and th
e Grou
p
’s divid
ends
paid t
o shareholders.
Change
%
2021
£m
2020
£m
T
otal employee pay
(1
2.2)
9,003
1
0,249
Dividends paid in the year
0.6
3,9
99
3
,977
Th
e ﬁgure
s in the t
able ab
ove, whi
ch reﬂ
ect pay
ments m
ade
dur
ing eac
h year an
d the imp
act of move
ments i
n exchang
e
rate
s, are a
s set ou
t on page
s 1
8
5 and 1
92. Howeve
r
, divid
ends
dec
lare
d in res
pect o
f 202
1 were £
4,00
6 milli
on (
2020 –
£
3,98
9 milli
on
) an inc
rea
se of 0.4%
.
T
o
tal emp
loyee pay i
s base
d on 9
1
,961 employe
es, th
e average
numb
er of pe
ople em
ployed d
uring 2021 (
2020 – 95,
884).
There were
no share rep
urchases made by
the
company
dur
ing 202
1 and 2020.
All-employee share plans
UK E
xe
cutive D
irec
tors may pa
rt
icipate i
n HM
RC app
roved
all
-emp
loyee sha
re pla
ns with th
e wide
r UK wor
kfor
ce, i
e.
Sha
re Save an
d Share R
eward pl
ans.
GS
K Ann
ual R
epor
t 2021
13
5
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Annual report on remuneration
continued
Directors’
pay in a wider setting
continued
* This index comprises AstraZeneca, Bristol-Myers Squibb, Eli Lilly
, Johnson &
Johnson, Merck & Co, Novartis, Pﬁzer
, Roc
he Holdings and Sanoﬁ.
150
10
0
200
250
GSK
To
tal Return
FT
SE
1
00
To
t
al Return Index
GSK
Pharma P
eers
To
t
al Return Index*
30
0
350
31.12.11
31.12.12
31.12.13
31.12.14
31.12.15
31.12.16
31.12.17
31.12.18
31.12.19
31.12.20
31.12.21
40
0
50
4
6
8
10
12
14
Global
pharmaceutical
group
European
cross-industry
group
2
L
ow
e
r
quartile
to
med
ia
n
Med
ia
n
to
upper
quar
tile
Emma Walmsley’s
cur
re
nt
po
si
tion
(£m)
Remuneration
includes salar
y
and
th
e
e
xpecte
d
valu
e
o
f
ince
nt
ives ba
se
d
o
n
the
Committee’s agreed benchmarking methodology.
External context
Comparator groups for pay and r
elative TS
R
Th
e Comm
itte
e used t
wo pay com
para
t
or gr
oups wh
en
considering executiv
e pay
for 2
02
1
. The Global pharmaceutical
co
mpar
ator group i
s also u
sed to me
asur
e relati
ve TSR
per
fo
rmanc
e. Th
e prima
ry g
roups u
sed for e
ach E
xecu
tive
Dir
ector we
re as fo
llows:
European cr
oss-industry comparator group
Emma W
almsley
Iain Mackay
Roche Holding A
G
Novartis
LV
M
H
Anheuser-Busch Inbev
Unilever
SAP
L
’Oreal
Novo Nordisk A/S
Airbus
Linde
Sanoﬁ
AstraZeneca
Diageo
Siemens
Christian Dior
Inditex
B
AT
V
olkswagen
Deutsche T
elekom
Kering
Heineken
BAS
F
V
inci
Adidas
Bayer
Safran
Reckitt Benc
kiser
2021 CEO total remuneration positioning
Wh
en review
ing the C
EO’s remune
ratio
n, the C
ommi
ttee ha
s
also referenced pay
for t
he Global pharmaceutical group.
Performance graph
Th
e followi
ng gra
ph sets ou
t the per
fo
rmanc
e of the c
ompany
rel
ative to the F
T
SE 1
00 inde
x and to the ph
arma
ceuti
cal
per
fo
rmanc
e com
parato
r group fo
r the ten-ye
ar per
iod to 31
De
cemb
er 202
1
. Thes
e indic
es were s
elec
ted for c
ompar
ison
pur
pose
s as they r
eﬂe
ct both th
e prima
ry i
ndex of w
hich GS
K is
a co
nstitu
ent and th
e indus
tr
y in whic
h it ope
rates
.
Global pharmaceutical comparator group
Dr Hal Barron
France
Sanoﬁ
Switzerland
Novartis
Roche Holdings
UK
AstraZeneca
US
AbbV
ie
(1)
Amgen
(1)
Bristol-Myers Squibb
Eli Lilly
Johnson & Johnson
Merck & Co
Pﬁzer
(
1
)
A
bbVi
e and A
mge
n are i
nclu
ded f
or re
mune
rati
on be
nch
mar
kin
g, bu
t are n
ot
in
clud
ed in t
he re
lati
ve TS
R com
par
ator gr
oup
.
13
6
GS
K Ann
ual R
epor
t 2021
Fi
xed
Pay
Salary
The Committee considered the
av
erage increases being
award
ed to emp
loyees b
elow the l
evel of E
xecut
ive Dir
ector
s
in th
e UK and U
S. Af
ter due c
onsi
derat
ion of pe
rfo
rman
ce, it
was a
gree
d that it wa
s appro
priate to awa
rd incr
eas
es in lin
e
wit
h the wid
er work
forc
e to the CEO, C
FO and C
SO to ens
ure
the c
ompet
itiven
ess of t
heir re
muner
ation c
ould be m
ainta
ined
.
Base salary
2022
% change
W
ider workforce
(1)
–
3.0
Emma W
almsley
£1,259,855
Iain Mackay
£915,335
Dr Hal Barron
(2)
$2,026,54
9
(1)
B
ased on the average increase budget for employees below the level of GL
T in the
U
K and US.
(2)
Dr B
arron will transition to a Non-Executive Director with effect from 1 August 2022.
Beneﬁts
No s
igniﬁ
can
t chang
es to the pr
ovisio
n of ben
eﬁts a
re prop
osed
for 2022. F
or full d
etail
s of the po
licy in re
latio
n to beneﬁ
ts,
ple
ase r
efer to the p
ropos
ed new 2022 Rem
unera
tion Poli
cy
report
,
page 1
4
4.
Pension
Th
e table b
elow pr
ovide
s an over
view of t
he pens
ion
ar
range
ments fo
r each o
ngoin
g Exe
cutive D
irec
tor in 2022.
Th
e Comm
itte
e has pr
evious
ly com
mit
t
ed to re
duce ex
istin
g
UK E
xe
cutive D
irec
tors’ pen
sions to a
lign wi
th the wi
der U
K
work
for
ce by 1 Jan
uar
y 2023.
Any ne
w UK
-ba
sed or U
S-b
ased E
xec
utive D
irec
t
or’s pe
nsion
wil
l be alig
ned to the a
pprop
riate wi
der wor
kfor
ce on
appointmen
t.
2022 Pension contribution
Emma W
almsley
Iain Mackay
20% of base salary and matching contributions of 5% on
the ﬁrst £13,333 of salary in accordance with the terms
of the plan open to all employees, and 20% of base
salary in lieu of pension on s
alary in excess of £13,333
Dr Hal Barron
(1)
38% of base s
alary
, less a contribution to the 40
1(k) and
ES
SP equivalent to 5% of total base s
alary and bonus
(net of the bonus deferred under the DABP). In addition,
in line with the wider US workforce, from 1 January
2021, a combined contribution rate under the 401(k)
and ES
SP plans of 11% (7% core contribution plus a
match of up to 4%) of total base salary and bonus (net
of the bonus deferred under the DABP).
(1)
Dr B
arron will transition to a Non-Executive Director with effect from 1 August 2022.
Pay for per
forman
ce
Annual bonus
Th
e Annua
l bonus p
lan ha
s been r
ede
signe
d to bette
r align w
ith
our I
U ambi
tions a
nd T
r
ust pr
iori
ty. For ful
l detai
ls of the pr
opos
ed
cha
nges to th
e Annu
al bonu
s plan
, plea
se refe
r to ‘2022 at a
gla
nce’ on pa
ge 1
24 and the p
ropo
sed 2022 Rem
unerat
ion
Poli
cy repo
rt o
n page
s 1
45 an
d 1
46.
Bonus opportunity % of salary
T
arget
Maximum
Exceptional
performance
(1)
Emma W
almsley
10
0
200
300
Iain Mackay
Dr Hal Barron
(1)
Exceptional performance: up to an additional 1
00% of s
alary fully paid in shares
deferred for three years.
W
eighting of performance measures %
T
otal sales
growth
Adjusted
operating
proﬁt gr
owth
Strategic and
operational
measures
E
SG: Inclusion
& Diversity
Emma W
almsley
30
30
30
10
Iain Mackay
Dr Hal Barron
Th
ere wil
l be a redu
ced payo
ut for be
low targ
et per
for
manc
e
co
mpare
d to the cur
rent po
licy. The pr
opos
ed incr
eas
e in
payout o
ppor
tuni
ty for a
bove tar
get pe
rfo
rman
ce is to
inc
entiv
ise exc
eption
al outp
er
forma
nce, i
n exces
s of our I
U
ambitions and T
rust priority goals.
The increasing impor
tance of our T
rust business priorit
y and
ESG c
ommi
tments h
as led u
s to propo
se an I
nclus
ion &
Di
versi
ty hum
an ca
pita
l manag
ement m
eas
ure in the A
nnua
l
bonus, based upon our
progress to
wards
our aspirational
targets for
gender and
ethnically
diverse representation
in senior
rol
es (
see p
age 37
).
In
evita
bly, targe
ts linked d
irec
tly to our ﬁn
anci
al and st
rategi
c
plan are commercially
sensitive.
The Committee does not
consider it appropria
te
to
disclose Annual bonu
s targets d
uring
the ye
ar
, as it m
ay resul
t in com
petiti
ve harm
. However, deta
ils of
the performance tar
gets
will, as
usual, be
disclosed
on a
retr
ospe
ctive b
asis i
n the 2022 Annu
al Rep
or
t.
Deferred Annual Bonus Plan (D
AB
P) 2022 awards
Th
e table b
elow pr
ovide
s detai
ls of the m
andator
y de
ferra
l into
the DAB
P of 50
% of 202
1 Annu
al bonu
s payme
nts and th
e
as
soci
ated award
s gran
ted. Th
e share
s award
ed have no
per
fo
rmanc
e con
dition
s, but m
ust be h
eld for th
ree yea
rs,
regardless of continued employment.
T
otal b
onus deferr
ed
into shares %
DABP awards
Shares
ADS
Emma W
almsley
7
2,399
Iain Mackay
50
50,05
6
Dr Hal Barron
40,617
Implementation of Remuneration policy f
or 2022
Annual report on remuneration
continued
GS
K Ann
ual R
epor
t 2021
13
7
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Annual report on remuneration
continued
Performance Shar
e Plan (PS
P)
2022 awar
ds
Th
e table b
elow pr
ovide
s detai
ls of awar
ds gran
ted unde
r
t
h
e
P
S
P.
% of salary
Shares
Emma W
almsley
57
5
4
61,059
Iain Mackay
400
233,028
Dr B
arro
n did not re
cei
ve a PSP awa
rd given h
is tra
nsiti
on to a
No
n-E
xecu
tive Dir
ector o
n 1 Augus
t 202
2.
L
TI performance measures
We are pro
posi
ng chan
ges to the m
eas
ures a
nd weight
ing for
the 2022 L
TI awar
ds to bet
ter alig
n to our IU a
mbiti
ons and o
ur
T
rust pr
iori
ty. For fu
rth
er deta
ils pl
ease r
efer to the 2022
Rem
unerat
ion Poli
cy rep
ort o
n page 1
46. The n
ew prop
osed
L
TI mea
sure
s and wei
ghting a
re:
L
TI measure
Measure
W
eighting
Innovation
Pipeline progress
20%
Performance
Relative TSR
T
otal S
ales Growth
Adjusted Operating Proﬁt Growth
30%
20%
20%
T
rust
ESG: Environment
(1)
10
%
(1)
A composite scorecard incorporating Scope 1 & 2 T
argets for which assessment of
performance against this metric will be determined in line with the W
orld Resources
Institute/W
orld Business Council for Sustainable Development G
HG Protocol
methodology for accounting and reporting of our emissions footprint.
Innovation
The
Pipeline progr
ess
measure seeks
to
reward
acceleration
and s
treng
theni
ng of the pi
pelin
e. This i
s bas
ed on t
wo equal
ly
weig
hted ele
ments of o
ur key as
sets or i
ndica
tions me
asu
red
over a thr
ee-ye
ar pe
rfo
rman
ce per
iod.
Poin
ts are al
locate
d for suc
ces
sful a
sse
ts in eac
h sub-
meas
ure
ba
sed up
on their f
orec
ast c
ommer
cial va
lue (
peak ye
ar sa
les) at
the e
nd of the pe
rf
orman
ce per
iod.
Th
e sub-m
eas
ures fo
r the 2022 award w
ill vest a
s follow
s
:
Pivotal T
rial St
arts
Foc
uses m
ainl
y on pha
se II
I reg
istra
tiona
l trial s
tar
ts
, but may
als
o inclu
de pha
se I
I star
ts (eg in onc
olog
y
).
Performance level
Points
Payout
Below Threshold
<11
Nil
Threshold
11
25%
13
5
0%
15
75%
Maximum
17
1
00%
Major Regulatory Approvals
Performance level
Points
Payout
Below Threshold
<16
Nil
Threshold
16
25%
18
5
0%
20
75%
Maximum
22
1
00%
The Pipeline progress measure is
commercially sensitiv
e a
t the
tim
e of gran
t. At the en
d of the pe
rfo
rman
ce per
iod we wi
ll
prov
ide ful
l discl
osur
e of what ha
s bee
n achieve
d.
Performance
Rel
ative TS
R will c
ontinue to b
e mea
sured a
gains
t GSK
’s
Global pharmaceutical comparator group (
see page 1
3
5
).
Th
e T
ota
l Sale
s grow
th and Ad
juste
d Oper
ating P
roﬁt gr
owt
h
measures recognise the importance of the
commercial
amb
ition
s in our I
U and the C
ommi
ttee h
as set t
arget
s that ali
gn
with t
hose ambi
tions.
T
rust – business priority
We are pro
posi
ng a new ESG E
nviron
ment me
asur
e bas
ed
upo
n our T
r
ust pr
iori
ty an
d goal of h
aving a Na
ture Net Po
siti
ve
and C
limate N
et Zero im
pact by 20
30 (
see p
age 1
22). The
ta
rgets fo
r the ESG E
n
vir
onmen
t meas
ure for th
e 2022 grant
are b
ase
d upon a se
rie
s of Natur
e goals r
elatin
g to W
ater
,
Waste & M
ateria
ls redu
ctio
n, Bio
diver
sit
y impac
t and Cli
mate
goa
ls that in
corp
orate Sc
ope 1 & 2 em
issi
on red
uctio
n targ
ets,
ca
rbon o
ff
sett
ing and ou
r indus
tria
lisati
on of gre
en
V
entolin
.
Shareholdings versus Shar
e Ownership Requir
ement
(SOR)
(audited)
T
o a
lign th
e intere
sts of E
xecu
tive Dir
ector
s with th
ose
of sh
areho
lder
s, they a
re req
uired to b
uild and m
ainta
in
sig
niﬁc
ant ho
lding
s of shar
es in GS
K over tim
e. E
xecuti
ve
Dir
ector
s are re
quire
d to conti
nue to sati
sf
y thes
e Share
Ow
ner
ship Re
quirem
ents (SOR) by h
oldin
g 1
0
0% of th
eir SO
R
for th
e ﬁrs
t 1
2 mont
hs af
t
er le
aving GS
K and n
ot les
s than 50
%
of the
ir SOR fo
r month
s 1
3-24 afte
r leavin
g GSK
.
V
alue of holdings as % of salary
SOR
% of salary
27 February 2022
31 December 2021
Emma W
almsley
650
1,292
985
Iain Mackay
300
261
64
Dr Hal Barron
300
79
9
566
Shares subject t
o performance conditions are
excluded
from
eac
h Exe
cuti
ve Dire
ctor’s SOR c
alcu
lation u
ntil the e
nd of the
per
fo
rmanc
e per
iod. T
hese ve
sted sh
ares a
re then i
nclud
ed as
par
t of th
e Dire
ctor’s SO
R to the ex
tent that th
e per
form
ance
co
nditio
ns are me
t. The v
alue of th
e holdi
ngs ha
s been
ca
lculate
d on a pos
t
-ta
x bas
is.
For D
r Hal B
arro
n, AD
S contr
ibutin
g to his SO
R includ
e his
inves
tment
s under th
e GSK 4
0
1
(k
) plan a
nd the ES
SP
.
Emm
a W
alms
ley and D
r Barr
on cur
rentl
y exceed t
heir SO
R.
Ia
in Mac
kay, who joi
ned the B
oard i
n earl
y 20
1
9, i
s curre
ntly
work
ing towa
rds sat
isf
ying hi
s SOR
.
Th
e compa
ny has pr
oce
sse
s in plac
e to ensur
e that eac
h
E
xecut
ive Dir
ector
’
s SOR w
ill cont
inue to be s
atisﬁ
ed af
ter
leaving GSK
, including the
monitoring of nominee accounts.
Ea
ch E
xecuti
ve Dire
ctor al
so agre
es to the ter
ms of the S
OR
inc
luded w
ithin t
heir se
rv
ice co
ntrac
t.
Implementation of Remuneration p
olicy for 2022
continued
13
8
GS
K Ann
ual R
epor
t 2021
Remuneration go
v
erna
nce
Annual report on remuneration
continued
This is subj
ect to
election and
subsequent ann
ual re-election.
Sub
ject to mu
tual agr
eeme
nt, they a
re eac
h expec
ted to ser
ve a
fur
the
r three ye
ars
, and up to ni
ne year
s from a
ppoi
ntment i
n line
wit
h the prov
ision
s of the 201
8 C
ode, s
ubjec
t to annua
l
re-election.
Committee focus during 2021
Remuneration policy
The Committee sets the broad structure for the Remuneration policy
and determines the remuneration of the Executive Directors, the
Chair and other corporate ofﬁcers.
Items discussed:
–
Proposed 2022 Remuneration policy
–
Remuneration impact of major Group restructuring and CH
demerger
–
Engagement with shareholders and consideration of feedback
Salary review
The Committee periodically reviews and considers the remuneration
environment for Executive Directors and G
L
T
, approving annual
adjustments as necessary having regard to performance and the
remuneration of the wider workforce.
Items discussed:
–
Review of remuneration environment and wider employee trends
–
Executive Director and G
L
T benchmarking, competitiveness and
GS
K comparator groups
–
G
L
T and Company Secretary s
alary review and recommendations
for 2021
–
Executive Director salary review and recommendations for 2022
Annual bonus
The Committee is responsible for setting speciﬁc performance
measures for the Annual bonus and for assessments of performance.
Items discussed:
CE
O, Executive Directors and GL
T 2020 bonus recommendations
and 2021 CE
O and Executive Directors’
bonus objectives
L
TI plans
The Committee is responsible for approving L
TI plan rule changes,
grants, assessments of performance, and the vesting of L
TI awards for
the Executive Directors, G
L
T and below (including interim awards).
Items discussed:
–
L
TI performance outcomes and vesting of L
TI awards for G
L
T and
below
–
Conﬁrmation of L
TI grants for G
L
T and below
Governance and other areas of focus
The Committee adheres to a robust remuneration governance
framework, ensuring alignment between internal actions and external
reporting/compliance requirements.
Items discussed:
–
Remuneration considerations and committee programme for 2021
–
Review of T
erms of Reference
–
Committee evaluation annual review
–
2020 Remuneration report
–
Conﬁrmation of 2021 Group Budget for remuneration purposes
–
AGM and Remuneration report feedback, the external
remuneration environment and performance target disclosure for
incentive plans
–
2021 Remuneration report disclosures, including CE
O pay ratio
–
Annual governance meeting key Committee messages
–
Committee Chair consultation with employee represent
atives
on setting pay and wider workforce pay practices
Committee role and membership
Th
ese det
ails a
re availa
ble on p
age 93 an
d are inc
orpo
rated
by refe
renc
e to this Re
por
t. Th
e Chair, CEO, Chi
ef Peop
le
Of
ﬁ
cer, Head o
f Reward
, Group F
inan
cial C
ontro
ller an
d the
Co
mpany S
ecret
ar
y as
sisted t
he Com
mit
tee duri
ng the yea
r
.
Adviser to the Committee
Pr
icewater
hous
eCo
oper
s LLP (P
w
C
) ha
s been th
e indep
ende
nt
adv
iser to th
e Com
mitte
e sinc
e it was ap
pointe
d in 20
1
8 f
or
an in
itial p
erio
d of thre
e year
s after a f
ull com
merc
ial tend
er
exer
cise wa
s conc
lude
d by the com
pany. Prio
r to the expi
ry of
this i
nitia
l peri
od, the C
omm
ittee r
eviewed t
he qual
ity of t
he
ser
vi
ces P
w
C provi
ded. A
s a resul
t, it wa
s agree
d to exte
nd
P
wC
’
s term fu
rth
er to the en
d of 2022. Thi
s would all
ow for
a full m
arket r
eview to be un
der
take
n over the sum
mer of 2022,
follow
ed b
y a fu
ll commercial t
ender if
appropriat
e, prior t
o
presenting recommendat
ions t
o the
Committee for
adviser
sup
por
t from J
anuar
y 2023
. Pw
C is a me
mber of th
e
Remuneration
Consultants’
Group and, as
such, vol
untarily
ope
rates un
der the c
ode of c
onduc
t in rel
ation to exec
utive
rem
unera
tion co
nsulti
ng in the U
K
. The co
de of co
nduct c
an
be found
at
ww
w
.remunerationconsul
tantsgroup.com.
Dur
ing the ye
ar
, in add
ition to p
rovidi
ng cons
ulta
ncy ser
vi
ces to
the C
ommi
ttee
, Pw
C provi
ded oth
er con
sultin
g and as
sura
nce
ser
vi
ces to th
e comp
any
. In li
ne with th
e protoc
ols agr
eed an
d set
by the C
ommi
ttee C
hair un
der whi
ch P
wC pr
ovide
d their ad
vic
e,
the C
ommi
ttee i
s satis
ﬁed th
at such ad
vic
e has be
en obje
ctive
and independent.
P
wC has
provided in
dependent commentary
on matters u
nder consideration
by
the Committee and
updat
es
on ma
rket pr
actic
e and le
gislat
ive req
uirem
ents. I
t als
o reviewe
d
the p
otentia
l for con
ﬂict
s of intere
st and j
udged t
hat ther
e were
appropriate
safeguards a
gainst such conﬂicts. PwC
’
s
fees f
or
adv
ice du
ring the ye
ar
, whi
ch were c
harge
d on both a ﬁ
xed an
d a
tim
e and mater
ials b
asis
, were £1
68,20
0. Wi
llis T
owe
rs Watson
provided add
itional mark
et data
to
the Committee.
Shareholder votes on r
emuneration matters
T
otal votes
cast (billion)
T
otal votes
for (%)
T
otal votes
against (%)
V
otes
withheld
(million)
Remuneration report
2021 AGM
3.5
93.1
6.9
15.4
Remuneration policy
2020 AGM
2
.7
88.2
11.8
620.1
Service contracts and letters of appointment
Th
e table b
elow se
ts out the d
ates of th
e Exe
cutive D
irec
tors’
ser
vi
ce co
ntrac
ts, wh
ich ar
e a
vail
able fo
r review at th
e comp
any’s
registered o
fﬁ
ce an
d on gsk.com. Each Executive Direct
or’
s
ser
vice con
tract contains a
1
2-mont
h not
ice period.
Date of contract
Effective date
Expiry date
Emma W
almsley
29.03.1
7
01.04.1
7
3
0.06.34
Iain Mackay
18.09.18
14.0
1.19
n/a
Dr Hal Barron
(1)
16.12.1
7
0
1.0
1.18
31.12.24
(1)
Dr B
arron will transition to a Non-Executive Director (with a letter of appointment) with
effect from 1 August 2022.
Th
e Non-
Exe
cutive D
irec
tors (N
ED) have lette
rs of ap
point
ment,
which are a
vailable
to
view
at the
company’
s
registered
ofﬁc
e.
Ea
ch NED i
s expe
cted to ser
ve on t
he Boa
rd until th
e end of th
e
AGM fo
llowin
g the thir
d annive
rsa
ry o
f their ap
point
ment.
GS
K Ann
ual R
epor
t 2021
13
9
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Chair and other Non-Executive Directors
Th
e compa
ny aims to pr
ovide th
e Chai
r and othe
r Non-
E
xecut
ive Dir
ector
s with fe
es that a
re com
petiti
ve with th
ose
paid by
other
companies o
f equiv
alent s
ize an
d complexity
,
sub
ject to th
e limits c
onta
ined in i
ts Ar
tic
les of A
ssoc
iation
.
Chair
’
s fees
Th
e Chair i
s paid a fe
e of £7
00,
000 p
er annu
m, of wh
ich he
ta
kes 25% in GS
K sha
res
. The Ch
air’s fee
s were rev
iewed on
his a
ppoin
tment a
nd have bee
n reviewe
d annua
lly sin
ce. It w
as
concluded the
y remained appro
priate.
2021 Non-Executive Directors’
fees
Th
e Non-
Exe
cutive D
irec
tors’ fe
es that a
pplie
d durin
g 202
1 a
re
set o
ut in the t
able b
elow:
Per annum
Standard annual fee
£95,000
Supplemental fees
Chair of the Audit & Risk Committee
£8
0,000
Senior Independent Director
£5
0,000
Scientiﬁc & Medical Experts
£30,000
Chairs of the Remuneration, Corporate
Responsibility and Science Committees
W
orkforce Engagement Director
£40,000
Non-Executive Director undertaking intercontinent
al
travel to meetings
£7
,500 per meeting
Implementation of Non-Executive Directors’
p
olicy in 2022
No
n-E
xecu
tive Dir
ector
s’ stan
dard a
nd supp
leme
ntal fe
es were l
ast in
crea
sed w
ith ef
fect f
rom 1 Ja
nuar
y 2020.
Fol
lowing a r
eview, and sub
ject to s
hareh
olde
r approva
l, it wa
s agree
d to autho
rise th
e paymen
t of fees f
rom 1 Ja
nuar
y 2022 to
Sci
ence C
omm
ittee m
embe
rs of up to £20
0,00
0 per a
nnum. T
hes
e would be p
aid in re
spe
ct of addi
tiona
l res
ponsi
biliti
es
und
er
taken on b
ehal
f of GSK a
nd to supp
or
t R&D an
d would re
ﬂect th
e time c
ommit
ment of su
ch res
pons
ibilit
ies
.
We do not exp
ect to ma
ke any other i
ncre
ase
s t
o the fe
es payab
le to Non-
E
xecuti
ve Dire
ctor
s durin
g the new pol
icy per
iod.
2021 T
ot
al fees (audited)
Th
e audited t
able b
elow se
ts out the va
lue of fe
es and b
eneﬁ
ts rec
eived by th
e Non-
E
xecuti
ve Dire
ctors i
n the for
m of cas
h and
sha
res or A
DS
. Fur
ther det
ails of t
he Non
-E
xecut
ive Dir
ector
s’ share a
lloc
ation pl
an are s
et out on p
age 1
4
1
. N
on-
Exe
cutive
Dir
ector
s’ fees th
at are pa
id in a cur
renc
y other th
an Sterli
ng are c
onver
ted usi
ng an avera
ge excha
nge rate th
at is revi
ewed fro
m
tim
e t
o time
. The aver
age exch
ange r
ates were up
dated in 2021
. Non-
Exe
cuti
ve Dire
ctors’ fe
es were c
onver
ted to US D
ollar
s usin
g
an exc
hange r
ate of $1
.
3481 in 202
1
. Bene
ﬁts co
mpri
se the gr
osse
d up ca
sh valu
e of travel an
d subs
istenc
e cos
ts incur
red in t
he
nor
mal co
urse o
f busin
ess
, in rel
ation to at
tenda
nce at Bo
ard an
d Comm
itte
e meetin
gs. F
or overs
eas
-bas
ed Dir
ector
s, thi
s
inc
lude
s travel to mee
tings in t
he UK
.
Non-Executive Directors’
emoluments (000)
(audited)
2021
2020
Fixed fees
Fixed fees
Cash
Shares/ADS
Beneﬁts
T
otal pay
Cash
Shares/ADS
Beneﬁts
T
otal pay
Sir Jonathan Symonds
£
525
£
17
5
£
3
£703
£525
£175
£2
£702
V
indi Banga
£
10
9
£
36
£
1
£
14
6
£114
£38
£2
£154
Charles Bancroft
–
$
2
10
$
5
$21
5
–
$82
–
$82
Dr Anne Beal
$
62
$
21
–
$
83
–
–
–
–
Dame V
ivienne Cox
£
10
1
£
34
£
1
£
13
6
£
10
7
£3
6
£2
£145
L
ynn Elsenhans
$
13
4
$
45
$
5
$
18
4
$93
$1
00
$20
$213
Dr Laurie Glimcher
–
$
16
5
$
13
$
17
8
–
$180
$3
4
$214
Dr Jesse Goodman
$
16
4
$
55
$
23
$242
$
1
74
$58
$23
$255
Urs Rohner
£
10
1
£
34
£11
£
14
6
£
10
7
£36
£4
£14
7
Judy Lewent
(1)
$
48
$
16
$
9
$73
$183
$61
$12
$256
(
1
)
R
eti
red fr
om th
e Boa
rd on 5 M
ay 2021.
Non
-E
x
ecut
iv
e Direc
tors’ fees
Annual report on remuneration
continued
14
0
GS
K Ann
ual R
epor
t 2021
Executive Directors’
interests in shares
Th
e intere
sts of the E
xec
utive D
irec
tors of th
e comp
any in of
ﬁce d
uring 2021 and th
eir per
son
s close
ly as
soci
ated (PC
A) are
show
n in the t
able be
low:
As at 31 December 2021
Unvested share plan inter
ests
T
otal directors’
inter
ests as at
Beneﬁcial
interests
Not subject to performance
Subject to
performance
27 F
ebruary 2022
(1)
31 December 2021
(1)
Shares/ADS
(2)
Shares/ADS
(3,7)
Options
(4,7)
Shares/ADS
(5)
Shares
Emma W
almsley
1,521,1
33
1,195,364
3
64,520
654,0
43
176
,8
01
1,495,0
49
Iain Mackay
27
5,681
71,9
7
2
–
–
71,97
2
779
,
782
ADS
Dr Hal Barron
51
9,7
23
424,186
224,353
19
9,833
–
7
40,680
1)
T
otal directors’
inter
ests
include beneﬁcial interests and unvested share plan interests not subject to performance. T
he balance as at 27 F
ebruary 2022
includes shares/
ADS awarded in 20
19 under the Performance Share Plan (PSP) and the Deferred Annual B
onus Plan (D
ABP) which vested in February 2022
less those sold to satisfy t
ax liabilities on the vested amounts. Executive Directors’
shareholdings versus their S
OR are outlined on page 13
7
.
2)
Beneﬁcial interests
include shares/
ADS held by the Executive Directors and their PCAs. For Emma W
almsley, this includes 2,385 shares purchased
through the GlaxoSmithKline Share Reward Plan. Iain Mackay does not currently participate in the Share Reward Plan. As a US employee, Dr Hal B
arron is
not eligible to participate in the Share Reward Plan which is only open to UK employees. Dr B
arron’
s beneﬁcial interests include AD
S and notional ADS held
by way of his investments in the GS
K 40
1(k) plan and the Executive Supplemental Savings Plan (E
SSP). Further det
ails on Dr Barron’
s membership of the
plans can be found on page 127
.
3)
Unvested shares/ADS not subject to performance
represent PSP shares/ADS which have vested but are subject to an additional two-year holding
period for Emma W
almsley and Dr Barron. Unvested ADS not subject to performance for Dr B
arron also represent bonus deferrals (as described in
note 7 below).
4)
Unvested options not subject to performance
represent bonus deferrals under the DABP which are awarded as nil-cost options (as described in
note 7 below).
5)
Unvested shares/ADS subject to performance
represent unvested PS
P awards.
6)
Vested but unexer
cised options:
None of the Directors hold vested but unexercised options.
7)
DABP:
The table below shows bonus deferrals and subsequent reinvestment of dividends under the DABP
. The amounts represent the gross shares/
ADS
balances prior to the sale of any shares/ADS to satisfy t
ax liabilities on vesting.
Deferred Annual Bonus Plan (Bonus deferrals)
27 F
ebruary 2022
31 December 2021
1 January 2021
Shares
Emma W
almsley
17
8
,
9
6
2
1
76,80
1
18
9
,
5
5
4
Iain Mackay
12
2
,
8
6
6
71,
97
2
36,655
ADS
Dr Hal Barron
1
00,30
1
101
,
801
7
2
,19
2
As U
K employees, bonus deferrals under the D
AB
P are granted as nil-cost options to Emma W
almsley and Iain Mackay and the following table sets out
details of nil-cost options exercised.
DAB
P
Date of grant
Number of shares
under option
Date of
exercise
Grant price
Market price
at exercise
Gain on exercise
(000)
Emma W
almsley
Deferral award
0
1.03.18
68,
716
01.03.21
£0.00
£12.11
£832
In respect of nil-cost options awarded in 20
18 under the DABP
, the bonus which is deferred by the Executive Director was recorded as remuneration (under
Annual bonus) in the T
otal remuneration t
able in respect of 20
17
. Number of shares under option includes the initial award amount together with reinvested
dividends accrued to the date of exercise.
Dire
ctors’ interes
ts in share
s (
audited)
Annual report on remuneration
continued
GS
K Ann
ual R
epor
t 2021
141
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Directors and Senior Managemen
t
Non-Executive Directors’
interests in shares
Th
e intere
sts of the N
on-
Exe
cutive D
irec
tors of th
e comp
any in of
ﬁc
e durin
g 202
1 and the
ir per
sons cl
osel
y ass
ociate
d (PCA) a
re
show
n in the t
able be
low:
Share allocation plan for Non-Executive Directors
T
otal directors’
inter
ests as at
(1)
Number of shares/ADS
27 F
ebruary 2022
31 December
2021
Beneﬁcial
interests at 31
December 2021
(2)
Dividends
reinvested after
year end
31 December
2021
Elected &
allocated during
the year
(3)
1 January 2021
Shares
Sir Jonathan Symonds
64,4
6
7
63,4
7
4
35,
75
7
9
93
2
7,
7
1
7
15,865
11,851
V
indi Banga
1
06,01
3
104
,
473
71,800
1,541
32,67
3
4
,7
8
0
27
,893
Dame V
ivienne Cox
1
0,9
9
7
1
0,548
–
449
1
0,5
48
3,3
45
7
,203
Urs Rohner
1
7,
1
6
8
1
6,42
7
–
74
1
16,427
3
,673
12,
75
4
ADS
Charles Bancroft
7
,665
7
,466
–
199
7
,466
6,09
9
1,36
7
Dr Anne Beal
509
504
•
5
504
504
–
Dr Hal Dietz
–
–
–
–
–
–
–
L
ynn Elsenhans
4
7,
1
6
8
44,
984
1,000
2,18
4
43,9
84
3,84
9
4
0,135
Dr Laurie Glimcher
23,66
4
22,653
–
1,0
11
22,653
6,03
9
16,614
Dr Jesse Goodman
1
0,695
1
0,223
–
472
1
0,223
2,136
8,0
86
Judy Lewent
(4)
–
–
–
–
–
1,928
18,8
92
1)
T
otal directors’
interests
include beneﬁcial interests and any shares/
ADS received as all or part of their fees under the Non-Executive Directors’
share allocation plan. Dividends received on shares/
ADS under the plan during the year and in January 2022 were converted into shares/ADS as at
13 January 2022.
2)
Beneﬁcial interests
includes shares/ADS held by the Non-Executive Directors and their PCAs.
3)
Shares/ADS allocated during the year
under the Non-Executive Directors’
share allocation plan cover ﬁve quarters of allocations for the period from
October 2020 to December 2021 due to a change in the timing of allocations during 2021. Shares/
ADS allocated also includes dividends reinvested during
the year
.
4)
Judy Lewent retired from the Board on 5 May 2021, at which time her holding of 20,820 ADS under the Non-Executive Directors’
share allocation plan
was released to her under the terms of the plan. The holding was subject to UK income t
ax.
Directors’
interests in shar
es (audited)
continued
Annual report on remuneration
continued
Fur
the
r infor
mation i
s provid
ed on co
mpen
satio
n and inter
ests o
f Dire
ctors a
nd Seni
or Ma
nagem
ent as a gr
oup (
the gr
oup
).
For t
his pur
pose
, the grou
p is deﬁ
ned as t
he E
xecuti
ve and No
n-E
xecu
tive Di
rector
s, oth
er mem
bers o
f the GL
T and th
e Com
pany
Se
creta
ry. For t
he ﬁnan
cial ye
ar 202
1
, the foll
owing ta
ble se
ts out agg
regate r
emune
ration f
or the gro
up for the p
erio
ds duri
ng
whi
ch they se
rve
d in that c
apac
ity.
Remuneration for 2021
£
T
otal compens
ation paid
29,205,41
7
Aggregate increase in accrued pension beneﬁts (net of inﬂation)
39,4
83
Aggregate payments to deﬁned contribution schemes
1,421,
723
Dur
ing 2021
, me
mber
s of the gr
oup were awa
rded s
hare
s and AD
S unde
r the com
pany’s vari
ous L
TI pla
ns, a
s set out i
n the tab
le
bel
ow
. T
o al
ign the i
nteres
ts of Sen
ior Ma
nagem
ent wi
th those o
f shar
ehold
ers
, Exe
cutive D
irec
tors a
nd GL
T memb
ers ar
e requi
red
to buil
d and mai
ntai
n signi
ﬁca
nt holdi
ngs of sh
ares i
n GSK ove
r time. G
L
T m
embe
rs are r
equir
ed to hold s
hare
s to an equi
valent
mult
iple of t
wo time
s their b
ase s
alar
y, and mus
t cont
inue to sat
isf
y thes
e shar
e owner
ship re
quire
ments fo
r a minim
um of 1
2
mon
ths af
ter leavi
ng GSK
.
Awar
ds
Dividend reinvestment awards
Awar
ded during 2021
Shares
ADS
Shares
ADS
Performance Share Plan
2,305,4
83
4
71,211
351,36
9
83,8
84
Deferred Investment Awards
(1,2)
27
4,51
0
–
18,
75
9
–
Share V
alue Plan
(2)
16,38
0
–
–
–
1)
Notional shares and ADS.
2)
Executive Directors are not eligible to receive Deferred Investment A
wards or participate in the Share V
alue Plan.
14
2
GS
K Ann
ual R
epor
t 2021
At 27 Febr
uar
y 2022, the g
roup and t
heir P
CAs had t
he follow
ing inte
rest
s in shar
es and A
DS of the c
ompa
ny
. Inter
ests awa
rded
und
er the var
ious L
TI pl
ans ar
e desc
ribe
d in Note 44 to th
e ﬁnan
cial s
tatemen
ts, ‘
Employe
e shar
e sche
mes’ on pa
ge 2
45.
Interests at 2
7 February 2022
Shares
ADS
Owned
2,482,185
526,3
42
Unexercised options
3,44
0
–
Deferred Annual Bonus Plan
58
8,815
121,19
8
Performance Share Plan
7
,245,58
6
959,612
Deferred Investment Awards
(1,2)
348,
94
7
8,563
Share V
alue Plan
(2)
32,
760
11,4
80
(1)
Notional shares.
(2)
Executive Directors are not eligible to receive Deferred Investment Awards or participate in the Share V
alue Plan.
Fees in r
espect of Executive Dir
ectors’
external appointments
CEO
Emm
a W
alms
ley is an i
ndepe
ndent n
on-exe
cutive d
irec
t
or of M
icro
sof
t Cor
porat
ion. D
uring 2021
, she rec
eive
d $325,0
00, o
f
whi
ch $1
25,0
00 wa
s delive
red a
s cas
h and $200
,00
0 as stoc
k option
s under t
he Mic
rosof
t C
orpo
ration’s Defe
rred C
omp
ensat
ion
Pl
an for its n
on-e
mployee d
irec
tors
.
CSO
Dr H
al Bar
ron wa
s a non-e
xecuti
ve direc
tor of GR
A
IL I
nc (a private c
ompa
n
y
) until 24 Aug
ust 202
1
. Duri
ng 202
1
, h
e ear
ned
$
30,00
0 in fee
s.
Payments to past Directors (audited)
Sim
on Din
geman
s lef
t the Bo
ard on 8 M
ay 20
1
9 a
s a volunt
ary l
eaver. The ves
ting of th
e D
AB
P awards i
s govern
ed by the
Rem
unerat
ion pol
icy preva
iling at t
he time M
r Ding
emans l
eft t
he Boa
rd. Th
e tabl
e below r
eﬂec
ts the val
ue of the de
ferre
d bonu
s and
acc
rued d
ivid
ends to the p
oint of r
elea
se.
Date of vesting
Number of
shares vested
20
19 DABP
14 February 2022
51,
712
Payments for loss of ofﬁce (audited)
No l
oss of of
ﬁ
ce paym
ents were m
ade in 2021 or 2020.
How our Remuneration policy continues to reﬂect Provision 40 of the U
K Corporate Governance Code (the Code)
Clarity and Simplicity
Th
e remun
erati
on ar
rang
ement
s for the E
xec
utive D
ire
ctors a
re set o
ut in a cl
ear an
d simp
le way in th
e Remun
erati
on pol
icy. Prio
r to
ﬁnalising t
he Remu
neration
policy
,
the
Committee consult
ed e
xtensively wit
h our
shareholders
to
ensure t
ransparency an
d clarity regarding
its implementa
tion. The ﬁxed
remuneration
elements
(
salary, beneﬁts
and pension
)
are closely
aligned with
wider w
orkforce arrangements
and o
ur pay for p
er
form
ance p
lans (ann
ual bo
nus an
d long-te
rm inc
enti
ve
) rewar
d delive
ry o
f ﬁnan
cial
, str
ategic a
nd ESG ob
ject
ives i
n the
shor
t
and long-
term.
Risk
In l
ine wi
th the C
ode, we o
pera
te both de
ferr
al and p
ost-ves
ting h
oldin
g peri
ods
, in addi
tion to m
alus a
nd claw
back p
rovis
ions
. The
Committee retains discret
ion t
o adjust
award
outcomes (
to zero
if appropriat
e
)
if it
considers the pa
yo
ut det
ermined does n
ot appropriat
ely
re
ﬂect t
he overa
ll pos
itio
n and pe
rfo
rma
nce of th
e comp
any.
Predictability and proportionality
Our R
emun
erati
on pol
icy de
ﬁnes m
ax
imum li
mits on t
he tota
l annua
l bonu
s and lo
ng-ter
m ince
ntive op
por
tuni
ties
, and p
ayouts un
der the
se
ele
ment
s are lin
ked to ful
ﬁlme
nt of per
fo
rman
ce co
nditi
ons tha
t suppo
rt t
he com
pany’s pu
blicl
y state
d ambi
tions
. Thr
ough i
ts
implementation,
maximum reward under
our
short and long-t
erm plans
are only
achiev
able for
mat
erial outperformance against our
stated
ambitions.
Alignment to culture
GS
K’s pur
pose
, valu
es and s
trateg
y are di
rect
ly reﬂ
ecte
d in the pe
rf
orma
nce c
ondit
ions s
et unde
r the ann
ual bo
nus an
d long-te
rm
inc
enti
ve. In p
ar
ticul
ar
, we are i
ntrod
ucin
g an ESG m
easu
re in bo
th our sh
or
t and lo
ng-term p
lans g
iven ou
r exte
rnal a
mbit
ions fo
r our T
rust
pr
iori
ty, and our N
atur
e Net Pos
itive a
nd Cli
mate Net Z
ero am
bitio
n by 2030
. Our Sh
are O
wner
ship R
equir
emen
ts str
ength
en the fo
cus on
our s
trateg
ic aim
s, an
d ensur
e alig
nment w
ith th
e intere
sts an
d expe
rien
ces of s
hare
hold
ers
, both du
ring a
nd af
ter emp
loyme
nt.
Th
e Remun
erati
on pol
icy ha
s oper
ated as i
ntend
ed in ter
ms of co
mpany p
er
form
ance a
nd qua
ntum dur
ing 2021
.
Annual report on remuneration
continued
Directors and Senior Management
continued
GS
K Ann
ual R
epor
t 2021
14
3
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Our c
urre
nt Remun
erati
on poli
cy (po
licy) was app
roved by our
sha
reho
lder
s at our Ann
ual Ge
nera
l Meet
ing on 6 M
ay 2020
whe
n it rec
eived a 8
8.
1
8
% vote in favour. Share
hold
ers ar
e being
as
ked to appr
ove a new poli
cy at our A
nnual G
ener
al Me
eting on
4 May 2022 w
hich is i
ntended to a
pply fo
r the nex
t thre
e year
s.
Dur
ing 2021
, th
e Com
mitte
e cons
idere
d the pol
icy to deﬁ
ne the
biopharma business’
new
approach t
o remunera
tion. The
decision-making process that t
he Committee fol
lowed
for it
s
deter
minat
ion, rev
iew and i
mplem
entati
on of the p
ropo
sed new
pol
icy is se
t out in the C
omm
ittee C
hair
’
s state
ment on p
ages
1
20 to 1
2
4.
Th
e Comm
itte
e
’s review of t
he poli
cy sough
t to ensur
e that it
continue
s t
o
:
–
Align with
the
company’
s
business priorities, cu
lture,
wider
work
for
ce pay po
licie
s and em
erging b
est p
racti
ce
–
Suppor
t
the bold
per
f
ormance ambitions announced t
o
inves
tors in J
une 202
1 and c
ompa
ny’
s key ESG c
ommit
ments
–
Create l
ong-t
erm shareholder
value, an
d
–
Dr
ive the su
cce
ss of the c
ompa
ny for the be
neﬁ
t of
shareholders, patients, our people and
other k
ey stak
eholders
In a
dditio
n, cha
nges to th
e polic
y have been m
ade to ens
ure its
imp
lemen
tatio
n will sup
por
t the de
liver
y of bu
sines
s str
ategy
whilst deliv
ering a
clear
, un
derstandable and appropriat
ely
co
mpetit
ive pack
age to at
trac
t, ret
ain and m
otivate exe
cutive
tale
nt.
Th
e Comm
itte
e develop
ed the new p
olicy fo
r Exe
cutive a
nd
No
n-E
xecu
tive Dir
ector
s in the c
ontex
t of its over
sigh
t of wide
r
work
for
ce pay, however
, it di
d not cons
ult dir
ectl
y with em
ployee
s
on th
e new poli
cy
. It co
nsulte
d with ou
r large
st sha
reho
lder
s in
respect of the proposed changes and
took
shareholders’
fee
dback i
nto acco
unt whe
n ﬁnal
ising th
e new poli
cy
.
Th
e table b
elow pr
ovide
s an over
view of t
he main c
hang
es that
are p
ropo
sed in r
espe
ct of the n
ew polic
y
. The ful
l polic
y that
sha
reho
lder
s are as
ked to appr
ove is set ou
t on page
s 1
44 to 1
52.
2022
Remuner
ation
policy
summar
y
Remuneration polic
y rev
ie
w
Remuneration element
Pr
oposed changes to policy
Rationale for the change
Pension
–
The description of the policy has been updated to
reﬂect that the pension arrangements of any current U
K
and US Executive Directors will be aligned to the new
Executive Directors’
arrangements from 1 January 2023
–
The US contribution rates have been updated
–
Th
is reﬂ
ects th
e comm
itment g
iven in th
e
2020 Rem
unerat
ion Rep
or
t that the p
ensio
n
ar
range
ments o
f US E
xecuti
ve Dire
ctors
would a
lso be a
ligne
d to those o
f the new
E
xecut
ive Dir
ector
s from Ja
nuar
y 2023
–
Th
e US refe
rence
s have bee
n update
d to
reﬂ
ect th
e latest c
ontri
butio
n rates fo
r the
US w
ider wor
kfo
rce wh
ich ca
me into ef
fec
t
in Ja
nuar
y 202
1
Annual bonus
–
T
he maximum bonus opportunity for Executive Directors
will be 300% of s
alary
. F
or target performance, the
bonus payout will be 1
00% of s
alary
–
For bonus up to an equivalent of 200% of salary
,
Executive Directors are required to defer 50% of any
bonus earned into shares, or ADS as appropriate, for
three years. Any portion of the bonus earned in excess
of 200% of salary must be deferred 1
00% on the same
basis
–
Th
e additi
onal op
por
tunit
y of 1
00
% is bei
ng
intr
oduc
ed in the a
nnual b
onus to
appropriately f
ocus and re
ward ex
ecutives
to deli
ver and ex
ceed o
ur publi
c ambi
tions
and to s
ecure s
trong p
er
forma
nce fo
r all our
stakeholders
–
Th
e additi
onal op
por
tunit
y woul
d be
deferred in
full t
o ensu
re alignment
with
shareholders’ in
terests
Non-Executive
Directors’
fees
–
Authority is sought for a Non-Executive Director who
is a member of the Science Committee to be
remunerated up to £200,000 per annum for
undertaking additional responsibilities on behalf of G
SK
and to support R&D
–
The current requirement for Non-Executive Directors
and the Chair to invest 25% of their net basic fees in
shares or ADS of the company is ret
ained, but the
company may choose to replace this for the Chair or
one or more Non-Executive Directors with a minimum
share or ADS ownership requirement of at least one
times their gross annual standard fee until their
retirement from the Board. Shares or AD
S previously
acquired through investment of fees would continue to
be held under those arrangements and would be
delivered or released following retirement from the
Board. Such shares or ADS would count towards any
expected minimum ownership requirement
–
T
o appropriately
remunerat
e Non-Executive
Directors for their
work
–
If t
he comp
any cho
oses to r
eplac
e the
cur
rent inve
stme
nt requi
reme
nt, the
minimum ownership requirement w
ould
co
ntinue to ma
intai
n a mean
ingfu
l and
pru
dent leve
l of inves
tment to al
ign No
n-
E
xecut
ive Dir
ector
s’ intere
sts wit
h
shareholders
–
Th
e abilit
y to rep
lace th
e curr
ent inves
tment
requirement would facil
itate great
er ﬂexibility
in op
erati
on of the
se arr
ange
ments
14
4
GS
K Ann
ual R
epor
t 2021
Sub
ject to sh
areh
older a
pprova
l on 4 May 2022 at GS
K’s Ann
ual Ge
nera
l Meet
ing, th
e Remune
ratio
n polic
y for eac
h remun
eratio
n
ele
ment wi
ll be as o
utline
d in the t
able be
low.
Operation
Individual’
s role,
experience, performance and independently
sou
rced d
ata for r
elevant c
ompa
rator gro
ups co
nside
red wh
en
deter
minin
g sala
ry l
evels
.
Sa
lar
y incr
eas
es ty
pica
lly ta
ke eff
ect in th
e ﬁrs
t quar
ter of
eac
h year.
Sa
larie
s are no
rmal
ly pai
d in the cur
rency o
f the E
xecut
ive
Dir
ector
’
s home c
ountr
y.
Opportunity
Th
ere is no fo
rmal m
ax
imum lim
it and
, ordin
arily, sa
lar
y incr
eas
es
wil
l be broa
dly in li
ne with th
e average i
ncre
ase
s for the wi
der
GSK workforce.
Howeve
r
, incre
ase
s may be hig
her to reﬂ
ect a ch
ange in t
he
scope of t
he ind
ividual’
s
role, responsib
ilities or
experience.
Salar
y
adjustments
may
also reﬂect wider mark
et condit
ions in
the g
eogra
phy in wh
ich the i
ndivi
dual op
erate
s.
Det
ails of c
urre
nt sal
ar
y levels ar
e set out i
n the An
nual re
por
t
on remunerat
ion.
Performance measur
es
Th
e overall p
er
forma
nce of t
he indiv
idua
l is a key con
sider
ation
when determining salary increa
ses.
Operation
E
xecut
ive Dir
ector
s are eli
gible to r
ecei
ve bene
ﬁts in li
ne with
the p
olicy fo
r other em
ployee
s whic
h may var
y by loc
ation.
Th
ese inc
lude
, but are n
ot limite
d to, car a
llowanc
es, h
ealt
hcar
e,
life a
ssu
ranc
e/
deat
h in ser
vi
ce (
whe
re not prov
ided a
s par
t of
the ind
ividual’
s
pension arrangemen
ts
)
, pe
rsonal ﬁnancial a
dvice
and c
ontra
ctual p
ost-ret
ireme
nt bene
ﬁts
. In lin
e with th
e policy
for oth
er emp
loyees
, Ex
ecuti
ve Dire
ctors m
ay be elig
ible to
receive ov
erseas relocation allo
wances and i
nterna
tional
transfer
-relat
ed beneﬁts when
required. Executive Direct
ors
in th
e UK are a
lso el
igible to p
ar
ticip
ate in all-
empl
oyee sha
re
sch
emes (e.g. S
hare S
ave and Sha
re Rewar
d Plan), unde
r
whi
ch they ar
e subje
ct to the s
ame ter
ms as al
l other
employees.
In o
rder to re
cogn
ise the hi
gh bus
ines
s travel re
quire
ments of
the r
ole, E
xecu
tive Di
rector
s are a
lso enti
tled to c
ar travel a
nd
exceptional
ly ma
y be accompanied
by t
heir spouse/
partner on
business trips
.
Other beneﬁts include expenses incurred in the
ord
inar
y cou
rse of b
usine
ss
, which a
re dee
med to be t
ax
able
beneﬁts on
the ind
ividual.
Wh
ere an E
xecu
tive Di
rector i
s bas
ed outs
ide the U
K
, but is
req
uired to tr
avel to the U
K to fulﬁ
l the res
pons
ibilit
ies of th
eir
rol
e and to at
t
end B
oard M
eeti
ngs, th
ey may be sub
ject to t
ax
on th
eir bus
ines
s travel ex
pense
s to and fr
om the U
K and on th
e
prov
isio
n of any acc
ommo
dation i
n the UK
. A
lthoug
h in rea
lity i
t
rep
rese
nts a bus
ines
s expe
nse, th
e ta
x treatm
ent req
uire
s that
the
ir travel an
d acco
mmod
ation ex
pense
s are th
en incl
uded a
s
ben
eﬁts
. Bec
ause o
f the bus
ines
s contex
t, th
e ta
x liab
ilitie
s will
be c
overed by th
e comp
any on a gro
sse
d-up ba
sis
.
Be
neﬁt p
rovisi
on is ta
ilore
d to reﬂe
ct mar
ket prac
tice i
n the
geo
grap
hy in whic
h the E
xecut
ive Dir
ector is b
ase
d and
dif
fer
ent pol
icie
s may appl
y if cur
rent or f
uture E
xecu
tive
Dir
ector
s are b
ased i
n a dif
fere
nt count
ry.
Opportunity
Th
ere is no fo
rmal m
ax
imum lim
it as b
eneﬁ
ts cos
ts can ﬂ
uctuate
depending on
changes in
provider cost
and individual
circumstances.
Det
ails of c
urre
nt bene
ﬁts an
d cost
s are set o
ut in the A
nnual
report on remuneration.
Performance measur
e
None
2022 R
emun
eration pol
icy repor
t
F
uture Pol
icy T
able
Sa
lary
No c
hange
T
o p
rovide a c
ore re
ward for th
e role
. Set at a level a
pprop
riate to se
cure an
d reta
in high c
alibr
e
indi
vidu
als ne
eded to de
liver th
e Group’s str
ategic pr
iori
ties
.
Beneﬁts
No c
hange
Level
s are se
t to recru
it and r
etain h
igh ca
libre i
ndivi
duals to exe
cute the b
usine
ss st
rategy.
GS
K Ann
ual R
epor
t 2021
14
5
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Futur
e policy t
able
continued
Operation
Fi
nanci
al, op
eratio
nal an
d busin
ess t
arget
s are set a
t the sta
rt o
f
the ye
ar by the C
ommi
ttee an
d bonus l
evels ar
e determ
ined by
the Committ
ee based on
performance again
st tho
se target
s.
Str
ategic an
d oper
ationa
l mea
sures a
re set at t
he sta
rt of t
he
yea
r by the Co
mmit
tee and p
er
forma
nce ag
ainst t
hose
me
asur
es is as
ses
sed by th
e Com
mitte
e.
E
xecut
ive Dir
ector
s are re
quire
d to defer pa
rt o
f any bonu
s earn
ed
into sh
ares
, or AD
S as ap
propr
iate, for t
hree ye
ars
. 50% of th
e
equ
ivale
nt of the ﬁr
st 200
% of sa
lar
y is de
ferre
d, and a
ny por
tion
in exc
ess of 20
0% i
s defer
red in fu
ll. Def
erre
d bonus s
hare
s are
eli
gible fo
r divid
end eq
uivale
nts up to the d
ate of vesti
ng.
Th
e Comm
itte
e may adjus
t the for
mulai
c vesti
ng outco
me (
eithe
r
up or d
own
) to ensu
re that th
e overall o
utcome r
eﬂe
cts und
erly
ing
bus
ines
s per
for
manc
e over the ves
ting pe
riod
. Clawb
ack and
/
or
malus pro
visions apply
as described on page
1
4
7
.
Opportunity
Th
e max
imum b
onus opp
or
tunit
y for E
xecut
ive Dir
ector
s is
30
0% of s
alar
y. Below 9
9% of ta
rget p
er
forma
nce, th
e bonus
payout o
n the ﬁna
ncia
l mea
sure
s will be ni
l. For t
arget
per
fo
rmanc
e, the b
onus payou
t will be 100% o
f sala
ry.
Annual b
onus
Change
T
o i
ncent
ivis
e and rec
ogni
se execu
tion of th
e busin
ess s
trateg
y on an ann
ual ba
sis
. Reward
s the
ach
ievemen
t of stretc
hing an
nual ﬁn
anci
al, str
ategic a
nd oper
ation
al mea
sure
s.
Pens
ion ar
rang
ement
s provid
e a comp
etiti
ve level of ret
ireme
nt
income.
Operation
Pension
arrangements ar
e structu
red in
accordance with
the
pla
ns ope
rated in th
e countr
y in w
hich th
e indiv
idua
l is likel
y t
o
reti
re. Wh
ere the i
ndivi
dual c
hoose
s not to be
come a m
ember
of the p
ensi
on plan
, ca
sh in lie
u of the rel
evant pe
nsion
co
ntribu
tion is p
aid ins
tead. E
xec
utive D
irec
tors in th
e UK ar
e
enti
tled ei
ther to jo
in the de
ﬁned c
ontri
butio
n pensi
on pla
n or
to rec
eive a c
ash pay
ment in l
ieu of pe
nsion c
ontri
butio
n.
Wh
ere an in
divid
ual is a m
ember o
f a GSK l
egacy d
eﬁne
d
ben
eﬁt pl
an, a de
ﬁned c
ontri
butio
n plan o
r an alter
native
pension plan arrangement
and is
subsequently
appointed
to the B
oard
, he or she m
ay remai
n a memb
er of that p
lan.
Opportunity
Th
e policy f
or all cu
rrent E
xec
utive D
irec
t
or
s is:
UK:
–
20% o
f base s
ala
ry c
ontri
butio
n t
o deﬁ
ned co
ntrib
ution p
lan
and f
ur
ther 5% in m
atched c
ontri
bution
s subje
ct to any
rel
evant ca
p and in li
ne with i
mplem
entat
ion pri
ncipl
es for
othe
r memb
ers of th
e plan; and
–
20% o
f base s
ala
ry a
s a cas
h payme
nt in lieu o
f pensi
on
co
ntribu
tion for t
he por
tio
n above the r
elevant c
ap;
or
–
20% o
f base s
ala
ry a
s a cas
h payme
nt in lieu o
f pensi
on
contribution.
Fro
m 1 Janua
ry 2023
, any cur
rent U
K Dire
ctors w
ho are s
till in
rol
e will have th
eir pen
sion a
rran
gemen
ts alig
ned to new
E
x
ecutive Directors
’ arrangements as fol
lows.
Any ne
w Exe
cutive D
irec
tors in th
e UK wi
ll rec
eive fro
m date
of appoin
tment
:
–
7% of
base salar
y
contribution
to
deﬁned contribution
plan
and f
ur
ther 3% i
n matched c
ontri
butio
ns subj
ect to any
rel
evant ca
p and in li
ne with i
mplem
entat
ion pri
ncipl
es for
othe
r memb
ers of th
e plan; and
–
7% of b
ase s
alar
y as a c
ash p
ayment i
n lieu of p
ensio
n
co
ntribu
tion for t
he por
tio
n above the r
elevant c
ap;
or
–
7% of b
ase s
alar
y as a c
ash p
ayment i
n lieu of p
ensio
n
contribution.
US
(1)
:
–
Supplemental Cash Balance
pension plan,
provid
ing ann
ual
co
ntribu
tion of 3
8% of ba
se sa
lar
y
, les
s 5% of tota
l base s
ala
ry
and b
onus (net of th
e bonus d
eferr
ed und
er the DAB
P)
(3)
.
–
GSK 401
(k) plan
(1)
and t
he ESS
P
(1)
with core cont
ributions o
f
7% of s
alar
y an
d bonus
(2)
and m
atched c
ontri
bution
s of 4% of
salar
y
and
bonus
(2)
.
Fro
m 1 Janua
ry 2023
, any cur
rent US E
xec
utive D
irec
t
or
s who
are s
till in r
ole wil
l have their p
ensio
n arr
angem
ents ali
gned to
new E
xecu
tive Di
rector
s’ arr
angem
ents a
s follows
.
Any ne
w Exe
cutive D
irec
tors in th
e US wil
l rece
ive from d
ate of
appointmen
t:
–
GSK 401
(k) plan
(1)
and t
he ESS
P
(1)
with core cont
ributions o
f
7% of s
alar
y an
d bonus
(2)
and m
atched c
ontri
bution
s of 4% of
salar
y
and
bonus
(2)
.
Glob
al:
–
Eli
gible fo
r appro
priate e
quival
ent ar
rang
ement no
t in exce
ss
of the U
S/U
K arr
angem
ents
.
Performance measur
es
None.
2022 Remuneration policy report
continued
Pension
Change
Pens
ion ar
rang
ement
s provid
e a comp
etiti
ve level of ret
ireme
nt inco
me.
(1)
In the event of any change to the plans operated in the US, a similar treatment would be
provided under any successor arrangements introduced within the market
(2)
Less bonus deferred under the DAB
P
(3)
Th
e 5% of
fse
t is eq
ual to t
he co
ntri
but
ion to t
he 401(k) an
d ESS
P wh
ich wa
s move
d
fr
om the p
ens
ion p
lans
, in li
ne wi
th the w
ide
r US wo
rk
forc
e, fr
om 1 Ja
nua
ry 20
2
1
14
6
GS
K Ann
ual R
epor
t 2021
Performance measur
es
Ba
sed on a c
ombi
nation of ﬁ
nanc
ial ta
rgets a
nd indi
vidua
l/
str
ategic a
nd ESG pe
rfo
rman
ce obj
ective
s, wi
th the ma
jorit
y
of the b
onus a
sse
sse
d again
st the ﬁn
ancia
l mea
sure
s. Th
e
weightin
g between different measures will
be det
ermined each
yea
r acco
rding to bu
sine
ss pri
oriti
es
. Fur
ther det
ails
, incl
uding
the m
easu
res to be u
sed in th
e ﬁnan
cial ye
ar
, are pr
ovide
d in the
Annual report on remuneration.
Selection of annual bonus measures
Th
e annua
l bonus i
s desi
gned to dr
ive the ac
hieveme
nt of
GSK’s an
nual ﬁn
ancial, st
rat
egic an
d operat
ional
measures.
For t
his re
ason th
e majo
rit
y of the ann
ual bo
nus oppo
rtu
nit
y is
ba
sed on a fo
rmal r
eview of p
er
forma
nce aga
inst s
tretchi
ng
ﬁna
ncia
l targ
ets, w
ith the re
main
der of the b
onus su
bjec
t t
o
as
ses
smen
t of indiv
idua
l per
form
ance a
gains
t the key str
ategic
and operational
measures which are al
igned t
o the
company’
s
key obj
ective
s for that ﬁ
nanc
ial yea
r and/or as
ses
smen
t of
per
f
ormance against ESG
targets.
Th
e annua
l bonus ﬁ
nanci
al tar
gets ar
e set by re
ferenc
e to
internal
budget and
external consensus target
s.
Operation
Conditional aw
ards are ma
de annually
with v
esting dependen
t
on th
e achieve
ment of pe
rf
orma
nce co
nditio
ns over thr
ee year
s
and a
re subj
ect to an a
dditi
onal t
wo-yea
r holdi
ng per
iod. P
SP
targets are se
t by
reference t
o in
ternal
budget and
external
consensus targets.
Award
s are el
igibl
e for divi
dend e
quival
ents up to th
e date of
ves
ting and r
elea
se.
Th
e Comm
itte
e may adjus
t the for
mulai
c vesti
ng outco
me
(
eith
er up or dow
n
) to ensur
e that the ove
rall o
utcome r
eﬂec
ts
underlying business performance ov
er the
vesting
period.
Clawback and/
or malus provisions
apply as described on
p
a
g
e
14
7.
Opportunity
Th
e norma
l ma
ximum awa
rd limi
ts that may b
e grante
d under
the P
SP to an in
divi
dual in a
ny one yea
r are set o
ut in the t
able
bel
ow:
% of salary
CEO
6
00
CFO
400
Other Executive Directors
500
Performance measur
es
Based on a combina
tion of
ﬁnancial, share price
related
and
strategic
and ESG
performance conditions which are
aligned t
o
the c
ompa
ny’
s str
ategic pl
an. Fo
r all me
asur
es, 25% o
f awards
wil
l vest at th
resh
old per
for
manc
e. Fur
the
r detai
ls, in
cludi
ng
the p
er
forma
nce ta
rgets at
tac
hed to the P
SP in r
espe
ct of ea
ch
yea
r
, a
nd the wei
ghting
s of the ta
rgets f
or the 2022 PS
P awards
are provided
in the
Annual report on remunera
tion.
Performance
Share Plan (PS
P)
No change
T
o i
ncent
ivis
e and rec
ogni
se deli
ver
y of the lo
nger ter
m busin
ess p
riori
ties
, ﬁna
ncial g
row
th and
increases in shareholder value compared t
o other
pharmaceutical companies
.
In addition, t
o
provide al
ignment with
shareholder i
nterests, a
reten
tion element,
to
encourage long-
t
erm
sha
reho
lding an
d disc
ourag
e exces
sive r
isk ta
king
.
Futur
e policy t
able
continued
2022 Remuneration policy report
continued
Share Ownership Requir
ements
No c
hange
T
o a
lign th
e intere
sts of E
xecu
tive Dir
ector
s with th
ose of
shareholders, they are
required t
o b
uild and
maintain
sig
niﬁc
ant ho
lding
s of shar
es in GS
K over tim
e. The
req
uirem
ents for e
ach E
xecu
tive Dir
ector a
re as fo
llows:
%
%
salary
CEO
65
0
Other Executive Directors
300
As a mi
nimum
, Exe
cutive D
irec
tors ar
e requi
red to ma
intai
n
1
00% o
f their s
hare ow
ners
hip req
uirem
ents to the e
nd of
the ﬁ
rst ye
ar follow
ing ret
ireme
nt from t
he comp
any and 50
%
to the en
d of the se
cond ye
ar
.
Selection of long-term incentive measures
The Committee selects per
formance measures which focus
Executive Directors’
long-
term rem
uneration
on the
delivery of
GS
K’s key stra
t
egi
c prio
ritie
s over the lo
nger ter
m. In a
dditi
on to
setting robust targets, the Committee has implement
ed a n
umber
of s
afegua
rds to ens
ure the t
arget
s are met i
n a sust
ainab
le way
and p
er
forma
nce re
ﬂec
ts genui
ne achi
evement a
gains
t targ
ets
and theref
ore represents
the deliv
ery of value
for shareholders.
For e
ach pe
rfo
rman
ce me
asur
e, the imp
act of a
ny acqui
sitio
n or
dive
stme
nt will b
e quanti
ﬁed a
nd adju
sted for af
ter th
e event.
Any m
ajor ad
justm
ent in the c
alcu
lation o
f per
form
ance
me
asur
es will b
e disc
lose
d t
o sha
reho
lder
s on vesti
ng.
Th
e Audit & R
isk C
ommit
tee ch
air and ot
her mem
ber
s, who a
re
als
o memb
ers of th
e Remun
erati
on Com
mit
tee, prov
ide inp
ut on
the Au
dit & Ri
sk Co
mmit
tee’
s revi
ew of the Gr
oup’
s
per
fo
rmanc
e and over
sigh
t of any ris
k factor
s relev
ant to
remuneration
decisions.
Det
ails of t
he rati
onale b
ehind th
e per
for
manc
e meas
ures
sel
ected a
nd how they a
re ca
lculate
d are set o
ut in the A
nnual
report on remuneration.
GS
K Ann
ual R
epor
t 2021
147
Strategic report
Governance and remuneration
Financial st
atements
Investor information
In th
e event of a ‘
trig
geri
ng event’ (i
.e. si
gniﬁ
cant mi
sco
nduct by
way
of viola
tion o
f regulat
ion, la
w
, a
signiﬁcant GSK policy
,
such
as th
e Cod
e of Co
nduct
, or a mater
ial mis
state
ment of r
esult
s,
or se
riou
s reput
ationa
l dama
ge
), the com
pany wi
ll have the
abi
lity to c
law back u
p to three ye
ars’ an
nual an
d defer
red
bon
uses a
s well a
s vested a
nd unveste
d L
T
Is. I
n addi
tion, i
n
re
spec
t of PS
P awards ma
de fro
m 2020, if a par
tic
ipant i
s
sub
ject to an i
nvesti
gation
, then th
e vestin
g of their awa
rds
may be d
elayed unt
il the outc
ome of th
at invest
igatio
n.
A sep
arate Re
coup
ment C
ommit
tee ha
s been e
sta
blish
ed to
inves
tigate r
elevant c
laims o
f misc
onduc
t. The R
ecou
pment
Co
mmit
tee exer
cise
s this aut
horit
y for th
e wide
r employe
e bas
e.
It c
ompr
ises o
f senio
r executi
ves wi
th releva
nt overs
ight an
d
appropriat
e e
xperience, includi
ng the
Senior
Vice President,
Chi
ef Co
mplia
nce O
fﬁ
cer, and the S
enior V
ice P
res
ident a
nd
Group General
Counsel, Legal
and
Compliance.
In r
espe
ct of ea
ch ﬁna
ncial ye
ar
, the Re
muner
ation C
ommi
ttee
wil
l discl
ose wh
ether i
t (
or the Rec
oupm
ent Co
mmit
tee
) has
exercised cla
wback or
malus. Disclosure will
only be
made
whe
n the mat
ter ha
s been s
ubjec
t to public r
epor
ts of
mis
cond
uct, w
here it h
as be
en full
y reso
lved, w
here i
t is lega
lly
per
mis
sible to di
sclo
se and w
here i
t can be m
ade wi
thout
unduly prej
udicing t
he company
and there
fore shareholders.
Additionally
, where there has been con
tinuity of
responsibility
bet
ween i
nitiat
ion of an a
dvers
e event and i
ts eme
rgenc
e as a
pro
blem
, the adve
rse even
t shoul
d be take
n into acc
ount in
as
ses
sing a
nnual b
onus awar
ds and L
TI ve
sting l
evels in the
yea
r the prob
lem is i
denti
ﬁed a
nd for futu
re per
iods
. The
Remuneration Commi
ttee (
or Recoupm
ent
Commit
t
ee
) ma
y
make appropria
te
adjustments
to
individual ann
ual bonuses as
well a
s gran
t and ves
ting leve
ls of L
T
I award
s to reﬂe
ct this
.
Futur
e policy t
able
continued
Clawback and malus
No change
2022 Remuneration policy report
continued
The Committee det
ermines the rem
uneration
package of
new
E
xecut
ive Dir
ector
s on a ca
se-by
-ca
se ba
sis dep
endin
g on
the r
ole, the m
arket f
rom whi
ch they wi
ll oper
ate and th
eir
exp
erie
nce. T
otal r
emune
ration l
evels wi
ll be set by r
efere
nce
to a rel
evant pay co
mpar
ator grou
p and, w
here ap
prop
riate,
will allow
for fut
ure dev
elopment in
the role.
It i
s expec
ted that ne
w Exe
cutive D
irec
tors wi
ll par
tici
pate
in sh
or
t and lon
g-term in
centi
ve plans o
n the sa
me bas
is as
existing
directors. Howe
ver
, in except
ional circumstances,
the C
ommi
ttee r
eser
ves t
he ﬂexi
bilit
y to set the i
ncen
tive limi
t
for a new E
xe
cutive D
irec
tor at up to an ad
dition
al 50
% of the
existing limits.
Th
e Comm
itte
e retai
ns this ﬂ
exibil
ity i
n reco
gnitio
n of the hig
h
level
s of vari
able pay i
n GSK
’
s glob
al pha
rmac
eutic
al
co
mpetito
rs. H
owever
, the C
ommi
ttee w
ill only u
se this ﬂ
exibi
lity
whe
n it is co
nsid
ered to be i
n the be
st inter
ests of t
he comp
any
and i
ts inves
tors
.
Pens
ion ar
rang
ement
s for any ex
terna
l recr
uit as a
n Exe
cuti
ve
Dir
ector w
ill be a
s set out i
n the Remu
nerat
ion pol
icy tab
le on
page 1
45.
Ot
her ben
eﬁts w
ill be pr
ovide
d in line w
ith the po
licy for e
xisti
ng
E
x
ecutive Directors.
Where required t
o mee
t business needs, relocation
support
wil
l be provi
ded in li
ne with c
ompa
ny polic
y
.
For an
y int
ernal appo
intment
s, entitl
ements u
nder e
xisting
remuneration
elements wil
l contin
ue, includin
g pension
enti
tleme
nts and a
ny outst
andin
g awards
. However, wher
e
not a
lread
y the ca
se, in
ternal a
ppoi
ntments w
ill be r
equir
ed
to move to E
xecut
ive Dir
ector c
ontra
ctual ter
ms, i
nclud
ing
terminat
ion pro
visions.
Th
e Comm
itte
e is mind
ful of the s
ensi
tivit
y rel
ating to
recruitment
packages and,
in particular
,
the
‘buying o
ut’ of
rights rela
ting t
o pre
vious emplo
yment. It wil
l theref
ore seek
to mini
mise su
ch arr
ange
ments
. However, in cer
ta
in
circumstances, to enable
the recruitmen
t of
except
ional talent,
the C
ommi
ttee m
a
y deter
mine th
at such a
rran
geme
nts are in
the b
est inte
rest
s of the co
mpany a
nd its sh
areho
lder
s. Su
ch
ar
range
ments w
ill, w
here po
ssib
le, be o
n a like-for-li
ke basi
s
with the
forfeited remunera
tion t
erms. Arrangements will
the
refore va
ry d
epen
ding on th
e plans a
nd arr
ange
ments pu
t
in pl
ace by the p
revio
us empl
oyer and may b
e in the for
m of
ca
sh or sh
ares a
nd may or may n
ot be subj
ect to pe
rfo
rman
ce
conditions. Explanations will
be provided
where pa
yments are
made as compensation
for
previous rem
uneration
forfeited.
The remuneration
arrangements f
or an
y newly
appoint
ed
E
xecut
ive Dir
ector wi
ll be dis
clos
ed as s
oon as p
racti
cab
le
af
t
er the appointme
nt.
Approac
h to r
ecruitment r
emuneration
No change
14
8
GS
K Ann
ual R
epor
t 2021
T
ermination of employment
In th
e event that a
n Exe
cutive D
irec
tor’s empl
oymen
t with the c
ompa
ny termin
ates, th
e follow
ing pol
icie
s and paym
ents wi
ll appl
y
.
Element of
Remuneration
Loss of ofﬁce payment policy
T
ermination
payment
T
ermination by notice:
12 months’
annual salary payable on termination by the company (pro-rated where part of the notice period is worked).
No termination payment is made in respect of any part of a notice period that extends beyond the contract expiry date.
A bonus element is not normally included in the termination payment. However
, the terms of the contracts seek to balance commercial
imperatives and best practice.
Redundancy:
As above, for termination by notice. In the U
K, only statutory redundancy pay will apply
. In the US, general severance policy does
not apply
.
Retirement, death and ill-health, injury or disability:
No termination payment.
L
TI awards
PS
P awards are governed by the plan rules as approved by shareholders.
The following provisions will normally apply:
T
ermination by notice:
Unvested awards will lapse.
Redundancy
, retir
ement, death, ill-health, injury
, disability or any other r
eason:
Generally
, awards will continue to vest over the original
timescales subject to performance and pro-rated for time.
In the event of a change of control, PSP awards will vest, t
aking into account performance to date and normally taking into account the
proportion of the performance period that has elapsed. Alternatively
, the awards may be exchanged for new awards.
Annual bonus
T
ermination by notice by individual:
If an individual serves notice and the termination date falls before 31 December
, the bonus is forfeited.
T
ermination by notice by the company
, redundancy
, retirement, death, ill-health, injury or disability:
If the termination date falls during the
ﬁnancial year
, eligible for pro-rated on-target bonus (if employed on 31 December, bonus payable based on actual results).
Mandatorily
deferred
bonus under
the DABP
DABP deferred bonus awards in respect of mandatorily deferred bonus amounts are governed by the plan rules as approved by shareholders.
The following provisions will normally apply:
T
ermination for gross misconduct:
Generally
, unvested awards will lapse
Any other reason:
Generally
, awards will vest in full on the original vesting date.
In the event of a change of control, awards will vest or may be exc
hanged for new awards.
Pensions
Pension scheme contributions by the individual and the company
, and any pension sc
heme beneﬁt accruals, generally cease at the termination
date in accordance with pension scheme rules. Access to pension sc
heme beneﬁts is governed by the pension scheme rules and country
legislation.
Beneﬁts
Generally
, beneﬁts will continue to apply until the termination date. T
he Committee may make payments in connection with an existing legal
obligation or in respect of any claim related to the cessation of employment. This may include fees for outplacement assistance, legal and/or
professional advice.
T
ermination by notice by the company and retir
ement (US executives)
:
In line with the policy applicable to US senior executives, they may
become eligible, at a future date, to receive continuing medical and dental insurance after termination/retirement.
Th
e compa
ny does n
ot have a poli
cy of ﬁxe
d term co
ntrac
ts.
Ge
nera
lly
, con
tract
s for new ap
pointm
ents wi
ll expir
e in line w
ith
the a
pplic
able p
olicy o
n retire
ment ag
e, whi
ch sinc
e 2009 h
as
been 65.
Co
ntrac
ts for exi
sting E
xec
utive D
irec
t
or
s will exp
ire on th
e
date
s shown o
n page 1
38.
Not
ice pe
riod o
n t
er
minatio
n by the emp
loying c
ompa
ny or the
E
xecut
ive Dir
ector is 1
2 cal
enda
r months
.
Th
e abilit
y to imp
ose a 1
2-
month no
n-co
mpete pe
riod (and a
non-solicitation
restriction
) on
an Executive
Director is
co
nside
red imp
or
tant by th
e comp
any to have the ab
ilit
y to
prote
ct the G
roup’s intelle
ctua
l prope
rt
y and s
taf
f. In ligh
t of this
,
the C
ommi
ttee b
elieves t
hat it woul
d not be ap
propr
iate to
provide f
or mitiga
tion in
the
contracts.
T
ermination by mutual agreement
In c
er
tai
n cir
cums
tan
ces
, it c
an be in t
he be
st inte
res
ts of th
e com
pany fo
r the B
oar
d to mana
ge pro
act
ivel
y suc
ces
sio
n plan
ning a
nd the d
evel
opme
nt of
the s
eni
or ta
lent p
ipel
ine. I
n suc
h cir
cums
tan
ces
, the B
oar
d may the
refo
re agr
ee th
at an E
xecu
tive’s de
par
tur
e wil
l be by mu
tual a
gree
ment
. In o
rder f
or thi
s
to ap
ply, the C
omm
it
tee wil
l nee
d to be sa
tisﬁ
ed th
at the E
xec
uti
ve has d
emon
str
ated pe
rf
orm
anc
e in lin
e with e
xpe
ctat
ions a
nd wh
ere re
quir
ed th
ey sho
uld
have c
ontr
ibu
ted to an o
rder
ly su
cce
ss
ion. I
n the c
as
e of an E
xecu
tive D
ire
ctor, the
y would t
hen b
e trea
ted as a ‘g
ood l
eaver
’ for th
e purp
ose
s of GS
K’s
lo
ng-ter
m inc
enti
ve pla
ns. I
f the te
rmi
nati
on date f
alls d
urin
g the ﬁ
nanc
ial ye
ar, they wo
uld be e
ligi
ble fo
r a pro
-rat
ed on-t
arg
et bon
us an
d if they a
re
em
ploye
d on 31 Dec
emb
er
, the b
onu
s payab
le woul
d be ba
sed o
n actu
al re
sul
ts.
Loss of ofﬁce payment policy
No change
Futur
e policy t
able
continued
2022 Remuneration policy report
continued
GS
K Ann
ual R
epor
t 2021
14
9
Strategic report
Governance and remuneration
Financial st
atements
Investor information
The Committee does not
anticipat
e t
he ex
ercise of
discretion
prov
ided by th
e PSP a
nd DABP p
lan ru
les in r
espe
ct of
term
inatio
n paymen
ts in a man
ner whi
ch would b
eneﬁ
t an
E
xecut
ive Dir
ector. However, there m
a
y be un
fores
een
cir
cumst
anc
es whe
re this i
s in the be
st inter
ests o
f the com
pany
and its
shareholders. Where it is necessar
y
to
exercise
discretion, e
xplanations
will be
provided.
Wh
ere an E
xecu
tive Di
rector l
eaves th
e comp
any
, the
Co
mmit
tee wil
l car
ry ou
t an as
ses
sment o
f the indi
vidu
al’s
per
fo
rmanc
e and c
onduc
t over the tim
e in role
. If it i
s
deter
mine
d that the in
divi
dual’s per
for
manc
e or co
nduct wa
s
co
ntrar
y to the l
egitim
ate expe
ctati
ons of the c
ompa
ny
, the
Committee reser
v
es the righ
t t
o apply appro
priate
mechanisms
suc
h as claw
back o
r reduc
tion or l
apsi
ng of outs
tand
ing
inc
entive awa
rds (malu
s
), t
o ens
ure that a
ny t
er
minatio
n
paym
ents ar
e in the be
st inter
ests o
f the com
pany and i
ts
shareholders (
see pa
ge 1
4
7).
Wh
en set
ting re
muner
ation fo
r the E
xecuti
ve Dire
ctors
,
the Committee
considers the
company’
s
strat
egic p
riorities,
preva
iling m
arket c
onditi
ons for gl
obal t
alent
, the co
mpeti
tive
environmen
t (
t
hrough comparison
with the
remuneration
of
exec
utives a
t comp
anies o
f simil
ar size
, comp
lexit
y and
interna
tional reach
) and the positionin
g and rela
tivities of
pay
and employment
conditions across the
broader GSK workforce.
In p
ar
ticula
r
, the Co
mmit
tee co
nside
rs the r
ange of b
ase
sa
lar
y ris
es for th
e work
force
s of tho
se par
ts of G
SK whe
re
the E
xec
utive Di
recto
rs are e
mploye
d. Thi
s is cons
ider
ed to
be th
e most r
elevant c
ompa
riso
n as the
se popu
lation
s reﬂe
ct
mos
t clos
ely the e
cono
mic envi
ronme
nts enc
ountere
d by the
individuals.
Th
e same p
rinci
ples a
pply to th
e Remune
ratio
n polic
y for
E
x
ecutive Directors
and other
employees altho
ugh
the remunera
tion offered t
o Executive Direct
ors under t
his
policy has a
stronger
emphasis on performance-related pa
y
tha
n that of
fere
d to other em
ployee
s of the Gr
oup.
–
Sa
lar
y and be
neﬁt
s (inclu
ding pe
nsion) are t
ailo
red to the
local market.
–
Th
e annua
l bonus p
lan app
lies to th
e wide
r employe
e
population
and is
based on business performance.
–
A combinat
ion of
per
f
ormance-related and
restricted share
pla
ns appl
y to the wid
er emp
loyee pop
ulatio
n.
–
All
-emp
loyee sh
are pla
ns are avai
labl
e to employe
es in the
UK
, in
cludi
ng the H
M Revenue & C
ustoms a
pproved U
K
Sha
re Save an
d Share R
eward P
lans
.
Whi
le empl
oyees a
re not dir
ectly c
onsu
lted in re
spec
t of the
Rem
unerat
ion pol
icy, Urs Roh
ner, the Co
mmit
tee Cha
ir
,
mee
ts with s
enior H
R repr
ese
ntative
s from a
cros
s the bus
ines
s
to revi
ew employe
e feed
back
. Dame V
ivi
enne C
ox, an
In
depen
dent N
on-E
xec
utive Di
recto
r
, engage
s with e
mploye
es
on var
ious top
ics
, incl
uding re
muner
ation
, in her ro
le as
W
orkforce Engagement
Director
. Board members enga
ge
wit
h employe
es aro
und dur
ing Boa
rd mee
tings w
here th
ey are
enc
oura
ged to sha
re thei
r views on t
he comp
any
, man
ageme
nt
and remunerat
ion.
In th
e wide
r orga
nisati
on, we have a
ligne
d our per
for
manc
e
and r
eward sys
tems wi
th our In
novation
, Per
form
ance a
nd T
r
ust
priorities a
nd a
cultu
re anch
ored in
purpose
and performance.
Our p
er
forma
nce sy
stem evalu
ates emp
loyees o
n both ‘w
hat’
they ne
ed to do an
d ‘how’ th
ey do it. A
lso, fo
r our mos
t senio
r
peo
ple we di
since
ntivi
se unet
hica
l worki
ng pra
ctice
s usin
g a
claw
back m
echan
ism that a
llows us to r
ecover p
er
forma
nce
-
related
pay
.
Loss of ofﬁce payment policy
continued
Dif
ferences between remunera
tion policy f
or E
x
ecutiv
e Directors
and other emplo
yees
2022 Remuneration policy report
continued
15
0
GS
K Ann
ual R
epor
t 2021
Th
e char
ts op
posite p
rovide i
llust
ration
s of the fu
ture tota
l
rem
unera
tion for e
ach of th
e Exe
cutive D
irec
tors in r
espe
ct of
the r
emune
ration o
ppor
tuni
ty gr
anted to ea
ch of the
m in 2022
und
er the pr
opose
d 2022 Remune
ratio
n polic
y
. A rang
e of
poten
tial ou
tcome
s is provi
ded for e
ach E
xecu
tive Di
rector a
nd
the underlying
assumptions are
set out
below
.
All scenarios:
–
2022 bas
e sal
ar
y has be
en use
d.
–
202
1 ben
eﬁts ﬁ
gure
s have been u
sed, i
e. ba
sed on ac
tual
amo
unts re
ceive
d in 202
1
.
–
Pens
ions fo
r Emma Walms
ley and I
ain M
ackay a
re bas
ed
upo
n their 2022 s
alar
ies
.
–
Th
e amount
s shown u
nder val
ue of PS
P awards a
re ba
sed
upo
n the rel
evant mul
tiple
s for 2022. Th
ey do not inc
lude
amo
unts in re
spe
ct of div
iden
ds reinve
sted an
d do not fac
tor
in ch
ange
s in shar
e pric
e over the ve
sting p
erio
d (
e
xcept a
s
described belo
w
)
.
Fixed:
–
In
clude
s bas
e sala
ry, pen
sion an
d bene
ﬁts
. Exc
ludes P
ay for
per
fo
rmanc
e, ie
. no Annu
al bonu
s would be p
aid an
d PSP
award
s would no
t vest.
Expected:
–
In
clude
s Fixe
d pay
.
–
For t
he Annu
al bon
us, it i
s ass
umed th
at targ
et per
for
manc
e
is ac
hieved
.
–
For P
SP awa
rds, a
mounts r
eﬂe
ct 50% ve
sting l
evels
.
Maximum:
–
It i
s ass
umed th
at the Ann
ual bo
nus would b
e payable a
t the
ma
xim
um level (i.
e. 300
%
) and th
at the award
s under t
he PS
P
woul
d vest in f
ull.
Maximum with 50% share price increase:
–
All e
leme
nts are th
e same a
s Ma
xi
mum but a
ssum
ing a 50
%
increase in share price.
Scenarios for futu
re total remuneration
PSP
Annual bonus
Fi
xed p
ay
50% share
price increase
Emma Walmsley (
£00
0)
2,000
4,000
6,000
8,000
1
0
,000
1
2,000
1
4,000
1
6,
000
Expected
Max
imum
0
Fixe
d
£1.
6
5
m
19
%
57
%
£6.53m
£1
2.
67m
£
1
6.2
9m
1
8,
000
56%
Ma
ximum
with
share price
increase
45%
Ia
in Ma
ckay (£
00
0)
2,000
4,000
6,000
8,000
1
0
,000
Fixe
d
E
xpected
Ma
ximum
0
£1.
3
4
m
£4.0
9m
£
7.7
5
m
47
%
£9.58m
Ma
ximum
with
share price
increase
38%
2022 Remuneration policy report
continued
10
0
%
25%
13
%
30%
23%
10
%
22%
10
0
%
33%
17
%
22%
36%
14
%
29%
19
%
45%
GS
K Ann
ual R
epor
t 2021
151
Strategic report
Governance and remuneration
Financial st
atements
Investor information
Element
Purp
ose and link to strategy
Operation
Chair
’
s fees
T
o provide an inclusive ﬂat rate
fee that is competitive with
those paid by other companies
of equivalent size and
complexity subject to the limits
contained in G
SK’
s Articles of
Association.
There is no formal maximum. However
, fees are reviewed annually and set by reference
to a review of the Chair’
s performance and independently sourced market data.
The Committee is responsible for evaluating and making recommendations to the Board
on the fees payable to the Chair
. The Chair does not participate in discussions in respect of their fees.
Basic fees
As above
There is no formal maximum. As with the Chair
, fees are reviewed annually and set by reference to
independently sourced data.
The Chair and CEO are responsible for evaluating and making recommendations to the B
oard on the
fees payable to the company’
s Non-Executive Directors.
Fee payment
Alignment with shareholders
Fees are paid in cash. Non-Executive Directors (including the Chair) are required to invest at least 25%
of their total net fees in shares or AD
S of the company
, but the company may c
hoose to replace this with
an ownership requirement to hold shares or ADS with an aggregate value at or above one times their
gross annual standard fee until their retirement from the B
oard. If the current investment requirement is
replaced with this ownership requirement, shares or ADS previously acquired through investment of fees
would continue to be held under those arrangements and would be delivered or released following
retirement from the Board. Such shares or ADS would count towards any minimum ownership
requirement.
Supplemental
fees
T
o compensate Non-Executive
Directors (other than the
Chair) for taking on additional
Board responsibilities or
undertaking intercontinent
al
travel.
Additional fees for the Senior Independent Director
, Committee Chairs, Science and Medical Experts,
the W
orkforce Engagement Director role and intercontinental travel.
The company has the authority to pay an additional fee, up to the equivalent of the Committee Chair
supplement to a Non-Executive Director
, should the company require signiﬁcant additional time
commitment in exceptional or unforeseen circumstances.
The company has the authority to pay an additional fee of up to £200,000 to Non-Executive Directors
(excluding the Chair) who are members of the Science Committee for undertaking additional
responsibilities on behalf of GS
K and to support R&D.
Beneﬁts
T
o facilitate execution of
responsibilities and duties
required by the role.
T
ravel and subsistence costs for Non-Executive Directors are incurred in the normal course of business
in relation to meetings on Board and Committee matters and other G
SK
-hosted events. F
or overseas-
based Non-Executive Directors, this includes travel to meetings in the U
K. In the event it is necessary for
business purposes, whilst not normal practice, Non-Executive Directors may be accompanied by their
spouse or partner to these meetings or events. The costs associated with the above are all met by the
company and, in some instances, they are deemed to be t
axable and therefore treated
as beneﬁts for the Non-Executive Director
.
Non-
E
x
e
cutiv
e Director remuneration policy 2022
Non-Executive Directors’
fees
Change
2022 Remuneration policy report
continued
Approac
h to r
ecruitment r
emuneration
No change
The following
policy and
principles apply t
o the
roles of Chair
and N
on-
Exe
cutive D
irec
tor
. It se
eks to ens
ure ali
gnment w
ith
sha
reho
lder
s throug
h the req
uirem
ent to inves
t in comp
any
sha
res an
d ADS
.
Chair
Fe
es will b
e set at a leve
l that is c
ompeti
tive wi
th thos
e paid by
othe
r comp
anie
s of equi
valent s
ize and c
omple
xity. Fe
es will b
e
paid partly in shares.
Non-Executive Directors
Fe
e levels for n
ew Non-
E
xecuti
ve Dire
ctors w
ill be s
et on the
sa
me bas
is as fo
r existi
ng Non
-E
xecut
ive Dir
ector
s of the
company
,
subject t
o local la
ws and
regulation
s.
In th
e event of a No
n-E
xec
utive Di
recto
r with a di
ffe
rent ro
le and
re
spons
ibili
ties b
eing ap
pointed
, fee leve
ls will b
e bench
marke
d
and s
et by refe
renc
e t
o co
mpara
ble ro
les in c
ompa
nies of
equivalent siz
e and complexity
.
Loss of ofﬁce
No change
Th
e Chair a
nd othe
r Non-
Exe
cutive D
irec
tors a
re not enti
tled to re
cei
ve any payme
nts in re
spec
t of fee
s for los
s of of
ﬁce w
hen they
reti
re or step d
own fro
m the Bo
ard.
15
2
GS
K Ann
ual R
epor
t 2021
Th
e Remune
ratio
n polic
y (Policy) is set o
ut on pag
es 1
4
4 to 1
52
of the 2021 Ann
ual Rep
or
t and it is i
ntende
d that the Po
licy for
GS
K’s E
xecuti
ve and No
n-E
xecu
tive Di
rector
s will o
perate fo
r a
per
iod of th
ree yea
rs fr
om the date of a
pprova
l at the co
mpany’s
An
nual Ge
nera
l Mee
ting on 4 M
ay 202
2.
Th
e Comm
itte
e wrote the Po
licy pr
incip
ally in r
elati
on to the
rem
unera
tion ar
rang
ement
s for the E
xecu
tive Dir
ector
s, wh
ilst
ta
king i
nto acco
unt the po
ssib
le rec
ruitm
ent of a re
plac
ement
or an a
dditi
onal E
xecu
tive Di
rector d
uring t
he oper
ation of t
he
Poli
cy
. The C
ommi
ttee i
ntends th
e Policy to op
erate fo
r the
per
iod se
t out above i
n its ent
iret
y
. However, it may af
ter due
consideration seek
to
change the
Policy
during
this period,
but o
nly if it b
elieve
s it is ap
propr
iate to do so fo
r the long
-term
success of the compan
y
, a
fter consultation
with shareholders
and h
aving so
ught sha
reho
lder ap
proval at a g
ener
al meet
ing.
Th
e Comm
itte
e rese
rve
s the rig
ht to make any r
emune
ration
paym
ents an
d/
or paym
ents for l
oss of o
fﬁ
ce (inc
ludin
g
exercising
any
discretions
av
ailable t
o it
in connection wit
h
suc
h paymen
ts
) not
withs
tandi
ng that the
y are not in l
ine wit
h
the Po
licy wh
ere the te
rms of th
e payment w
ere agr
eed:
(i) be
fore the AG
M on 7 May 201
4 (the date the c
ompa
ny’
s
ﬁrst shareholder
-approv
ed Directors
’ remunera
tion policy
came
into
effec
t
)
;
(ii) be
fore th
e Policy c
ame into e
ffe
ct, pr
ovide
d that the ter
ms
of the
payment
were
consistent
with th
e shareholder
-appro
ved
Rem
unerat
ion pol
icy in for
ce at the t
ime they we
re agre
ed; or
(iii) at a t
ime whe
n the rel
evant ind
ivid
ual was n
ot a Dire
ctor of
the c
ompa
ny and, in t
he opini
on of the C
ommi
ttee
, the paym
ent
was n
ot in con
sider
ation fo
r the ind
ividu
al bec
omin
g a Dire
ctor
of the c
ompa
ny
. For the
se pur
pose
s ‘payme
nts’ inc
ludes t
he
Committee satisfying awards
of variable
remuneration
and,
in re
lation to a
n award over s
hare
s or ADS
, the ter
ms of the
paym
ent are ‘ag
reed
’ at the time t
he award i
s grante
d.
Per
for
manc
e Shar
e Plan (P
SP) awar
ds are s
ubjec
t to the
term
s of the P
SP pla
n rule
s under w
hich th
e award ha
s been
gra
nted. T
he Co
mmit
tee may adj
ust or am
end awar
ds only i
n
acc
ord
ance w
ith the pr
ovisi
ons of the p
lan rul
es. T
his in
clude
s
mak
ing ad
justm
ents to re
ﬂect o
ne-o
ff c
orpor
ate events
, such
as a c
hange i
n the com
pany’s ca
pita
l struc
ture.
Th
e Comm
itte
e may also m
ake mino
r amend
ments to th
e Policy
(
for re
gulator
y, exchan
ge con
trol, t
ax o
r admini
strati
ve purp
oses
or to ta
ke acco
unt of a cha
nge in l
egisl
ation) with
out obt
aining
shareholder approval
for such
amendments.
Statement of consideration of shareholder views
The Committee engages in
regular dialog
ue with
shareholders
and h
olds a
nnual me
eting
s with GS
K’s lar
ges
t investor
s to
dis
cuss a
nd take fe
edba
ck on its R
emune
ration p
olicy p
ract
ices
and g
overna
nce mat
ters
.
Operation and scope of Remuneration pol
icy
2022 Remuneration policy report
continued
The Annual report on remunera
tion has been
prepared in
acc
ord
ance w
ith the C
ompa
nies Ac
t 2006 a
nd The L
arg
e
and Medium-sized Companie
s
and Groups (Accounts and
Reports)
(Amendment
) Regula
tions
20
1
3 (
t
he Regula
tions
).
In a
ccor
danc
e with th
e Regul
ations
, the foll
owing p
art
s of
the Annual
report on remuneration
are subject t
o a
udit:
to
tal
remuneration
ﬁgures for
Executive Directors in
cluding fu
rther
details for
each element
of rem
uneration
(
salary, beneﬁts,
pension, annual
bonus and
long-t
erm incent
ive a
wards
);
No
n-E
xecu
tive Dir
ector
s’ fees a
nd emol
uments r
ecei
ved in th
e
yea
r; Dire
ctors’ in
teres
ts in sha
res
, inclu
ding inte
rest
s in GSK
sha
re pla
ns; paymen
ts to pas
t Dire
ctors; pay
ments fo
r loss
of of
ﬁc
e
; and s
hare ow
ners
hip req
uirem
ents an
d holdi
ngs,
for which
the opin
ion thereon
is expressed on
page 1
64. The
remaining sections
of t
he Annual report on rem
uneration are
not su
bjec
t to audit no
r are the p
ages r
eferr
ed to from w
ithin
the audit
ed sections.
The Annual report on remunera
tion has been
approv
ed
by the B
oard of D
irec
tors a
nd sign
ed on its b
ehal
f by:
Urs Rohner
Remuneratio
n Committee Chair
28 Fe
brua
ry 2022
Basis of prepa
ration
GS
K Ann
ual R
epor
t 2021
15
3
Strategic report
Governance and remuneration
Financial statements
Investor information
Fin
an
ci
al
s
t
at
ement
s
GS
K Ann
ual R
epor
t 2021
15
3
In this se
ction
Directors’
stat
ement o
f responsibil
ities
1
54
Independent Audit
or’
s report
1
56
Financial stat
ements
1
68
Note
s to the ﬁn
anci
al st
atement
s
1
72
Financial statemen
ts of
GlaxoSmithK
line
plc
prepared under UK GAAP
252
Strategic report
Governance and remuneration
Financial statements
Investor information
15
4
GS
K Ann
ual R
epor
t 2021
The Directors are
responsible for
preparing the
Annual Report,
the Re
muner
ation r
epor
t and t
he Grou
p and pa
rent co
mpany
ﬁnancial stat
ements
in a
ccordance with app
licable la
w and
regulations.
UK company la
w requires
the Direct
ors to
prepare ﬁnancial
st
atements f
or each ﬁ
nanc
ial yea
r
. The Di
recto
rs are r
equir
ed
to pre
pare th
e Group c
onso
lidate
d ﬁnanc
ial st
atement
s in
accordanc
e
with International Accounting
Standards in
co
nformi
ty wi
th the re
quire
ments of t
he Com
pani
es Act 20
06
and the Internat
ional Financial Repor
ting
Standards (IFR
S
)
as
is
sued by th
e Inter
nation
al Acc
ountin
g Stand
ards B
oard (
IASB).
Th
e Dire
ctors h
a
ve ele
cted to pre
pare t
he pare
nt com
pany
ﬁnancial stat
ements
in a
ccordance with Un
ited
Kingdom
Accounting
Standards
and applicable
law
(Unit
ed Kingdom
Ge
nera
lly Acc
epted Ac
coun
ting Pr
actic
e
). Unde
r comp
any law
the D
irec
tors mus
t not app
rove the ﬁn
anci
al state
ments u
nles
s
they a
re sati
sﬁe
d that they gi
ve a true a
nd fair v
iew of the s
tate
of af
fai
rs of the G
roup a
nd its pr
oﬁt or l
oss for t
hat per
iod.
In p
repar
ing the ﬁ
nanc
ial st
atement
s, the D
irec
tors ar
e
required t
o
:
–
select suitable
accounting
policies
and then
apply
them
consistently
;
–
make j
udgem
ents an
d acco
unting e
stima
t
es th
at are
reasonable and prudent
;
–
st
ate that the G
roup ﬁn
anci
al state
ments c
omply w
ith
IF
RS, a
s iss
ued by the I
ASB a
nd in co
nform
ity w
ith the
req
uirem
ents of th
e Com
panie
s Act 20
06;
–
state
with regard
t
o the
parent
company
ﬁnancial stat
ements
that a
pplic
able U
K Acc
ounti
ng Stan
dard
s have been
follo
wed,
subject
to
any
mat
erial
departures disclosed
and
explained
in the
parent
company
ﬁnancial stat
ement
s;
and
–
prepare the
ﬁnancial stat
ements on
a going
concern basis
unl
ess it i
s inap
propr
iate to pre
sume tha
t the Gro
up and th
e
par
ent co
mpany wi
ll cont
inue in bu
sine
ss.
The Directors are
responsible for
keeping
adequat
e account
ing
rec
ords t
hat are s
uf
ﬁcie
nt to show an
d expla
in the co
mpany’s
tra
nsac
tions a
nd disc
lose w
ith re
ason
able ac
cura
cy at any tim
e
the ﬁ
nanci
al pos
ition o
f the Gro
up and to en
able th
em to ensu
re
that th
e Grou
p ﬁnanc
ial st
atemen
ts and the R
emune
ratio
n
rep
or
t comp
ly with t
he Com
pani
es Act 20
06 and A
r
ticle 4 of
the I
AS Regu
lation
. They a
re also r
espo
nsib
le for saf
eguar
ding
the a
sset
s of the Gr
oup and h
ence fo
r tak
ing re
ason
able s
teps
for the
prev
ention
and det
ection of
fraud and
other
irregularities.
Th
e Group ﬁ
nanc
ial st
atement
s for the yea
r ende
d
3
1 De
cemb
er 202
1
, c
ompr
ising p
rinc
ipal st
atemen
ts and
sup
por
ting no
t
es
, are se
t out in the ‘
Fin
ancia
l state
ments’
on pa
ges 1
68 to 25
1 of t
his rep
or
t. The p
aren
t compa
ny
ﬁna
ncia
l statem
ents for t
he year e
nded 31 Dece
mber 2021
,
co
mpris
ing the b
alanc
e she
et and the s
tateme
nt of cha
nges in
equ
ity fo
r the year e
nded 31 Dec
embe
r 202
1 and sup
por
ting
note
s, are s
et out on p
ages 252 to 256.
Th
e resp
onsib
ilitie
s of the au
ditor in r
elatio
n to the ﬁna
ncial
st
atements a
re set o
ut in the I
ndep
endent A
uditor
’
s rep
ort o
n
pag
es 1
56 to 1
67
.
Th
e ﬁnanc
ial st
atement
s for the ye
ar ende
d 3
1 Dec
ember 2021
are i
nclud
ed in the A
nnua
l Repor
t, w
hich i
s publi
shed in p
rinted
for
m and mad
e availab
le on our we
bsite
. The Di
rector
s are
re
spons
ible fo
r the mai
ntenanc
e and inte
grit
y of the A
nnual
Rep
or
t on our web
site in ac
cord
anc
e with U
K legis
latio
n
governi
ng the
preparation an
d disseminatio
n of ﬁnancial
st
atements
. Acc
ess to t
he websi
te is availa
ble fr
om outs
ide
the UK, where comparable legislation
may
be different.
Ea
ch of the c
urren
t Dire
ctors
, who
se name
s and fu
nctio
ns are
lis
ted in the C
orp
orate Gove
rnan
ce sec
tion of t
he Annu
al
Rep
or
t 202
1 conﬁ
rms that
, to the be
st of his o
r her k
nowled
ge:
–
the G
roup ﬁn
anci
al state
ments
, whic
h have been p
repa
red
in ac
cord
ance w
ith I
FRS
, as is
sued by th
e IAS
B and in
co
nformi
ty wi
th the re
quire
ments of C
omp
anie
s Act 200
6,
give a t
rue and f
air vi
ew of the as
sets
, liab
ilitie
s, ﬁ
nanci
al
pos
itio
n and pro
ﬁt of the G
roup; and
–
the St
rategic r
epor
t an
d risk s
ectio
ns of the A
nnual R
epor
t,
which represent th
e management
report, include a fair
revie
w
of the d
evelop
ment an
d per
form
ance of t
he busi
nes
s and the
pos
itio
n of the co
mpany an
d the Gro
up take
n as a who
le,
togeth
er with a
description o
f the
principal risks
and
uncertain
ties
tha
t
it f
aces.
D
ire
ct
ors’
st
a
tem
ent
of re
sponsib
ilit
ies
GS
K Ann
ual R
epor
t 2021
15
5
Strategic report
Governance and remuneration
Financial statements
Investor information
Disc
losure of information to auditor
Th
e Dire
ctors i
n ofﬁ
ce at the d
ate of this A
nnua
l Repor
t have
eac
h conﬁ
rme
d that:
–
so fa
r as he or s
he is awar
e, ther
e is no rel
evant au
dit
info
rmati
on of whi
ch the co
mpany
’
s audito
r is unawar
e
; and
–
he or s
he has t
aken al
l the step
s that he or s
he ought to h
ave
ta
ken as a Di
recto
r t
o make h
imsel
f or her
self awa
re of any
rel
evant aud
it infor
matio
n and to es
tabli
sh that th
e comp
any’s
auditor
is a
ware o
f tha
t informa
tion.
Thi
s conﬁ
rmati
on is gi
ven and sh
ould be i
nterpr
eted in
acc
ord
ance w
ith the pr
ovisi
ons of se
ction 4
1
8 o
f the
Co
mpan
ies Ac
t 2006
.
Going co
ncern basis
Pag
es 56 to 8
1 cont
ain in
format
ion on th
e per
form
ance of
the G
roup, it
s ﬁnan
cial po
siti
on, ca
sh ﬂow
s, net de
bt pos
ition
and borrowing
facilities. Further inf
ormation, in
cluding T
reasur
y
risk managemen
t polic
ies, exposures t
o mark
et an
d credit
risk
and h
edgin
g activ
itie
s, is gi
ven in Note 4
3 to the ﬁna
ncia
l
state
ments, ‘Financia
l inst
ruments
and r
elat
ed disc
losures
’
.
Havi
ng as
ses
sed the p
rinci
pal ri
sks an
d other mat
ter
s
considered in
connection
with the
viability sta
tement,
the
Directors considered it
appropriate
to
adopt
the goi
ng concern
ba
sis of ac
coun
ting in pr
epar
ing the ﬁ
nanci
al state
ments
.
Internal control
Th
e Boar
d, thro
ugh the Au
dit & Ris
k Com
mit
tee, ha
s reviewe
d
the a
sse
ssm
ent of ri
sks and t
he intern
al con
trol fr
amewor
k that
ope
rates in G
SK an
d has c
onsid
ered th
e ef
fecti
venes
s of the
syste
m of inter
nal co
ntrol in o
perat
ion in the G
roup fo
r the yea
r
cove
red by thi
s Annua
l Repor
t an
d up to the date of i
ts app
roval
by the B
oard of D
irec
tors
. Fur
ther d
etail o
n the revi
ew of inter
nal
co
ntrols i
s set out i
n the Gover
nanc
e repo
rt o
n page 1
1
2.
The 2
0
1
8 UK Co
rporate G
ov
ernan
ce Co
de
Th
e Boar
d consi
der
s that Gla
xo
Smith
Kli
ne plc ap
plie
s the
pri
ncipl
es and c
ompli
es wi
th the prov
isio
ns of the U
K Cor
porate
Governance Code maintained by the Financial Reporting
Co
uncil
, as de
scri
bed in th
e Cor
porate G
overna
nce se
ctio
n
on pa
ges 83 to 1
1
8. Th
e Boar
d fur
ther c
onsid
ers th
at the
An
nual Re
por
t, ta
ken as a wh
ole, is f
air, balan
ced an
d
understandable, and pro
vides the in
formation
necessar
y for
shareholders to
asses
s
the Grou
p’
s
position and
performance,
business model
and stra
tegy
.
As r
equire
d by the Fi
nanci
al Co
nduct A
uthor
ity
’
s List
ing Rul
es,
the au
ditor ha
s cons
ider
ed the D
irecto
rs’ sta
tement of
co
mplia
nce in re
latio
n to those p
oints of th
e UK C
orpo
rate
Gove
rnanc
e Co
de whic
h are sp
eciﬁ
ed for th
eir rev
iew
.
Annual Repor
t
Th
e Annua
l Repor
t fo
r the year e
nded 31 Dec
embe
r 202
1
,
comprising the
Report of the Direct
ors, the Remunera
tion
report
,
the Financial
statemen
ts and
Additional i
nformation
for inve
stor
s, ha
s been a
pproved by t
he Boa
rd of Dir
ector
s
and s
igned o
n its be
half by
Sir Jonathan Symonds
Chairman
28 Feb
ruar
y 2022
Dire
ctors’ st
atement of re
sponsibilities
c
ontinued
15
6
GS
K Ann
ual R
epor
t 2021
Independent Auditor
’
s repor
t to t
he member
s
of Gla
x
oS
m
ithK
l
ine plc
Report on t
he au
dit of the ﬁnancial statement
s
1
. Opinion
In our opinion
:
–
Th
e ﬁnanc
ial st
atement
s of Gla
xoS
mith
Klin
e plc (
the ‘
Pare
nt
co
mpany’) a
nd its s
ubsid
iari
es (
the ‘G
roup’) gi
ve a true an
d
fai
r view of th
e state of th
e Group’s and of t
he Pare
nt
co
mpany’s af
fair
s as at 31 Dec
embe
r 202
1 and of the
Gr
oup’
s proﬁ
t for the ye
ar the
n ended;
–
Th
e Group ﬁ
nanc
ial st
atement
s have been p
roper
ly pre
pare
d
in ac
cord
ance w
ith Uni
ted Ki
ngdom ad
opted in
t
er
nationa
l
accounting standards and International Financial Repor
ting
Sta
ndar
ds (IF
RSs) as is
sued by t
he Inter
natio
nal Acc
ounti
ng
Standards Board
(IASB)
;
–
Th
e Parent c
ompa
ny ﬁnan
cial s
tateme
nts have bee
n prop
erly
prepared in
accordance with
United
Kingdom Generally
Acc
epted Ac
coun
ting Pr
acti
ce incl
uding F
RS 1
0
1 “Re
duced
Disclosure F
ramew
ork”
;
and
–
Th
e ﬁnanc
ial st
atement
s have been p
repa
red in ac
cor
danc
e
wit
h the req
uirem
ents of th
e Comp
anie
s Act 200
6.
We have audite
d the ﬁna
ncia
l statem
ents wh
ich co
mpris
e the:
Group
–
C
onso
lidate
d bala
nce sh
eet a
s at 3
1 Dec
embe
r 202
1
;
–
C
onso
lidate
d inco
me sta
tement fo
r the yea
r then e
nded;
–
Consolidated stat
ement o
f comprehensive
income fo
r the
year t
hen ended
;
–
C
onso
lidate
d statem
ent of c
hange
s in eq
uity f
or the ye
ar
then ended
;
–
C
onso
lidate
d cas
h ﬂow st
atemen
t for the ye
ar the
n ende
d
;
and
–
No
tes 1 to 4
7 to the ﬁn
anci
al sta
tement
s, wh
ich inc
lude
s the
accounting principles and policies.
Parent company
–
Ba
lanc
e she
et as at 31 Dec
embe
r 202
1
;
–
St
atemen
t of chan
ges in e
quit
y for th
e year th
en end
ed; and
–
No
tes A to L to the ﬁ
nanci
al st
atemen
ts, wh
ich in
clud
es the
accounting principles and policies.
Th
e ﬁnanc
ial re
por
ting fr
amewor
k that ha
s been a
ppli
ed in the
preparation of
the
Group ﬁnancial stat
ements
is applicable la
w
,
United Kingdom adopted
international accounting
standards
and I
FR
Ss as is
sued b
y the IAS
B. T
he ﬁna
ncial r
epor
tin
g
fr
amework t
hat has b
een ap
plie
d in the pre
para
tion of th
e
Parent compan
y ﬁnan
cial stat
ements
is appl
icable law
and
United Kingdom Accounting Standards, including FRS 1
01
“Reduced Disclosure
Frame
work”
(Unit
ed Kingdo
m Generally
Acce
pt
ed Accou
nting Practic
e
).
2
. Basis for opinion
We condu
cted our a
udit in a
ccor
danc
e with I
nterna
tiona
l
Sta
ndar
ds on Aud
iting (U
K) (
ISAs (U
K
)
) and app
lica
ble law.
Our responsibil
ities und
er those
standards are
further
de
scrib
ed in th
e auditor
’
s res
pons
ibilit
ies for t
he audi
t of the
ﬁna
ncia
l statem
ents se
ction o
f our rep
or
t.
We are ind
epen
dent of th
e Group a
nd the Pa
rent co
mpany i
n
acc
ord
ance w
ith the eth
ical r
equir
ement
s that ar
e relevan
t to
our au
dit of th
e ﬁnanc
ial st
atemen
ts in the U
K, i
nclud
ing the
Fi
nanci
al Repo
rt
ing Co
uncil’s (
the ‘
FRC
’
s’) Ethic
al Sta
ndar
d as
app
lied to li
sted pub
lic inter
est en
titie
s, and we h
ave fulﬁ
lled ou
r
other
ethical responsi
bilities
in accordance wit
h these
req
uirem
ents
. W
e conﬁ
rm that we h
ave not provi
ded any
non-audit
service
s
prohibit
ed b
y t
he FRC’
s E
thical Standard
to
the G
roup or t
he Pare
nt comp
any
, as no
ted in the Au
dit & Ri
sk
Co
mmit
tee rep
or
t withi
n the Co
rpor
ate Gover
nance s
ecti
on of
the A
nnual R
epor
t on pa
ge 1
1
1
.
We believe t
hat the au
dit evid
ence we h
a
ve obt
ained i
s
suf
ﬁcient
and appropriat
e t
o pro
vide a
basis for
our opin
ion.
3
. Audit scope and execution
We struc
tured o
ur appr
oach to th
e audit to re
ﬂec
t how the
Gr
oup is or
ganis
ed as we
ll as ens
uring o
ur audi
t was both
ef
fect
ive and r
isk foc
used
. Our aud
it appr
oach c
an be
sum
mari
sed into th
e follow
ing are
as that e
nabl
ed us to obt
ain
the ev
idenc
e requ
ired to for
m an opi
nion on th
e Grou
p and
Parent compan
y ﬁnan
cial stat
ements
:
–
Risk as
sessm
ent an
d audit pl
annin
g at a Grou
p level
. T
he
central control and common
systems
throughout
most of the
Gr
oup ena
bled us to s
truc
ture our au
dit ce
ntral
ly
. The u
se of
dat
a analy
ti
c tools al
lowed for a mo
re det
ailed u
nder
stan
ding
of the ﬂ
ow of tra
nsac
tions
, enab
ling us to fo
cus our r
isk
asses
sment
and design
targeted a
udit t
esting procedures.
Our risk assessment procedures considered, amongst o
ther
fac
tors
, the imp
act of the g
lobal p
ande
mic and c
limate
change on
the account
balances, disclosures and company
pr
actic
es. We app
ointed p
ar
tner
s from the G
roup a
udit tea
m
to lea
d the glo
bal aud
it of eac
h of the thr
ee bus
ines
s units
(pharmac
eut
icals, vaccines and consumer healthcare
)
, in
addition
to
partners responsible for
the
component
and legal
enti
ty au
dits in e
ach co
untr
y
. The
se glob
al bus
ines
s unit
partners met regularly
with seni
or business u
nit mana
gement
to unde
rst
and the s
trateg
y
, per
form
ance a
nd other m
atter
s
whi
ch aro
se thro
ughout t
he year th
at coul
d have impac
ted the
ﬁnancial reporting. In addition, w
e held
regular meet
ings with
mem
ber
s of the Inte
rnal Au
dit, t
he intern
al Leg
al Co
unsel a
nd
the G
loba
l Ethic
s & Com
plian
ce team
s to under
sta
nd their
work a
nd to revi
ew their re
por
ts to enh
ance o
ur risk
assessme
nt
;
–
Audit wo
rk per
form
ed at glo
bal sha
red ser
vi
ce cent
res
.
A sig
niﬁc
ant am
ount of th
e Group’s ope
ratio
nal pro
ces
ses
that c
over ﬁna
ncia
l repor
tin
g is unde
rt
aken in s
hared s
er
vic
e
ce
ntres
. Our G
roup au
dit team i
nclud
ed sen
ior indi
vidu
als
re
spons
ible fo
r each of t
he glob
al proc
ess
es wh
o
co
ordin
ated our aud
it work at t
he shar
ed ser
vi
ce ce
ntres
GS
K Ann
ual R
epor
t 2021
157
Strategic report
Governance and remuneration
Financial statements
Investor information
in-
scop
e for the G
roup aud
it to ensu
re we develo
ped a go
od
und
erst
andin
g of the en
d-to-en
d proc
ess
es that su
ppor
ted
mat
erial accoun
t balan
ces, classes of tran
sactions
and
dis
clos
ures w
ithin th
e Group ﬁ
nanc
ial st
atement
s. We then
evalu
ated the ef
fec
tiven
ess of i
nterna
l contr
ols over ﬁn
anci
al
reporting for these pr
ocesse
s
and considered
the
imp
licat
ions for t
he rema
inder o
f our audi
t work;
–
Audit wo
rk execut
ed at com
pone
nt level an
d indivi
dual
legal entities
. The fol
lowing c
ompo
nents we
re subje
ct to
aud
it proc
edur
es as we
ll as the a
sse
ssm
ent of the
ef
fect
ivene
ss of inte
rnal c
ontro
ls over ﬁna
ncia
l repor
ti
ng
:
Aus
trali
a; Belgi
um; Canad
a; China; F
ranc
e
; Ger
many; It
aly;
Japan
; Spai
n
; S
witzerland
;
United
Kingdom
;
and
the Un
ited
State
s. Th
e Grou
p audit te
am was i
n active di
alog
ue
thro
ughou
t the audi
t with th
e comp
onent a
udit tea
ms
responsible for
the aud
it work
under t
he direction
and
superv
ision
of t
he Group
audit t
eam. This included
deter
minin
g wheth
er the wor
k was pl
anned a
nd per
for
med
in ac
cord
ance w
ith the ove
rall G
roup au
dit str
ategy an
d the
req
uirem
ents of ou
r Grou
p audit in
stru
ction
s t
o the
co
mpone
nts. D
ue to res
trict
ions on ove
rse
as trave
l, we did
not vi
sit th
e compo
nents t
his year, con
sisten
t with the p
rior
yea
r
. T
o sati
sf
y ours
elves t
hat our over
sigh
t and sup
er
visio
n
was a
ppro
priate we pe
rf
orme
d remote rev
iews of au
dit
working papers using
videoconferencing t
echnology
,
inc
rea
sed the f
reque
ncy and l
ength o
f those r
eviews
dep
endin
g on the si
gniﬁ
canc
e and ri
sk of the c
ompo
nent an
d
co
ntinue
d t
o at
t
end t
he plan
ning and c
lea
ranc
e meetin
gs of
components
;
–
Audit p
roce
dures un
der
take
n at a Grou
p level and o
n the
parent c
ompan
y.
In ad
ditio
n to the above
, we also p
er
forme
d
aud
it work on t
he Gro
up and Pa
rent co
mpany ﬁ
nanci
al
st
atements
, inc
luding b
ut not lim
ited to the c
onsoli
datio
n
of the G
roup’s res
ults, t
he prep
arati
on of the ﬁ
nanci
al
st
atements
, cer
ta
in dis
closu
res wi
thin the D
irec
tors’
Remuneration
report, litigation pro
visions and
exposures in
add
ition to en
tity l
evel and ove
rsig
ht contr
ols re
levant to
ﬁnancial reporting. All
components
or legal
entit
ies with
ann
ual reven
ue gre
ater than 1.8% of th
e total G
roup reve
nue
were i
nclud
ed in our a
udit sc
ope. T
he co
mpone
nts or le
gal
enti
ties n
ot covere
d by our aud
it sco
pe were s
ubjec
t to
analytic
al
procedures to
conﬁrm our conclu
sion that
there
were n
o signi
ﬁca
nt ris
ks of mater
ial mi
ssta
tement in t
he
aggregated ﬁnancial information
;
and
–
Internal
controls testing appr
oach.
We teste
d the
ef
fect
ivene
ss of inte
rnal c
ontro
ls over ﬁna
ncia
l repor
ti
ng
acr
oss al
l in-sc
ope en
titie
s and enti
ty leve
l contr
ols at the
Gr
oup level
. Comm
on syste
ms allowe
d for rel
evant IT
co
ntrols to b
e tested c
entra
lly acr
oss al
l comp
onent
s. We
were able
to
place reliance on
controls
where planned
and
it wa
s more ef
ﬁ
cient
. Not
withs
tand
ing the I
T contr
ols
deﬁciencies disclosed in t
he ke
y aud
it matters section
of
this r
epor
t, m
itigat
ing con
trols ex
isted w
hich al
lowed us to
continue t
o tak
e reliance
on controls
where planned.
Our a
udit sc
ope ad
dres
sed 73% o
f the Gro
up’
s revenue
,
76% of the G
roup’s proﬁ
t befor
e ta
x and 85% o
f the Gr
oup’
s
total
assets.
The imp
act of c
limate ch
ange on our au
dit
Cli
mate chan
ge has t
he potenti
al to imp
act the G
roup in a
numb
er of ways a
s set out i
n the str
ategic re
por
t on pag
es
49 - 52 of the A
nnual R
epor
t and N
otes 1
7
, 1
9 and 20 of t
he
ﬁnancial statements. The Group
has set out t
heir environ
mental
goa
ls unde
r the Par
is Clim
ate Acco
rd to have a net zer
o impac
t
on cl
imate and a n
et posi
tive imp
act on n
ature by 203
0.
In th
e plan
ning of ou
r audit
, we have cons
ider
ed the pote
ntial
imp
act of cl
imate cha
nge on th
e Group’s bus
ines
s and its
ﬁnancial stat
ements.
We have sough
t to under
sta
nd the Gr
oup’
s ide
ntiﬁc
ation a
nd
as
ses
smen
t of the pote
ntial im
pact
s of climate c
hange
, how
the
se ris
ks inﬂ
uence t
he Gro
up’
s strate
gy and th
eir imp
licat
ions
on th
e ﬁnanc
ial st
atement
s.
The Group’
s
asses
sment
focused on t
he impacts of
more
frequent e
xtreme weather condit
ions, wat
er scarcity
, changes
in th
e politi
cal l
andsc
ape a
nd medi
a focus w
hich ha
s the
pro
pensi
ty to c
ause ch
ange
s in cons
umer a
nd marke
t
beh
aviour; vo
latilit
y in th
e cost
s and availa
bilit
y of mate
rial
s and
re
sourc
es that c
ould im
pact f
uture ﬁ
nanci
al per
for
manc
e and
asset valuation
s.
In consultation
with our
climat
e change
specialists, we
:
–
Conducted
detailed
risk assessment pr
ocedures ac
ross all
in-
scop
e bala
nces a
nd tra
nsact
ions to dete
rmine a
ny risk
s of
mater
ial mi
sst
atement in t
he ﬁna
ncial s
tateme
nts by app
lying
the ex
pecte
d impac
t of clim
ate chang
e to our und
erst
andin
g
of the
business;
–
Challenged the appropriat
eness of the
Group’
s
asses
sment
of the p
otentia
l impac
t of clim
ate chan
ge and the i
mpac
t of
the
se on the ﬁ
nanc
ial st
atement
s, inc
luding i
n the are
a of
int
angib
le as
sets as d
esc
ribed i
n sect
ion 6 to this r
epor
t; and
–
Use
d our own a
sse
ssm
ent of the i
mpact o
f climate c
hange
to cha
lleng
e the Gro
up’
s ass
ess
ment of g
oing co
ncer
n,
including
considering the
poten
tial impact
on futu
re
per
formance and a
vailability of ﬁnancing.
We have not bee
n engag
ed to prov
ide as
sura
nce over t
he
acc
uracy o
f climate c
hange d
iscl
osure
s set out o
n page
s 49
to 52 in the A
nnual Re
por
t. As p
ar
t of our au
dit pro
cedu
res,
we are
required t
o read
and consider
these disclosures t
o
consider whether
they
are mat
erially inconsist
ent
with the
ﬁna
ncia
l statem
ents or k
nowle
dge obt
aine
d in the au
dit.
We did not id
entif
y any m
aterial i
ncon
sisten
cies a
s a res
ult
of
these
pro
cedur
es.
4
. Our applica
tion of materialit
y
We deﬁn
e materia
lit
y as the m
agnitu
de of mis
statem
ent in th
e
ﬁna
ncia
l statem
ents that m
akes it p
roba
ble that t
he eco
nomic
decisions of
a reasonably knowledgeable person w
ould be
cha
nged o
r inﬂue
nced
. W
e use ma
terial
ity b
oth in pla
nning th
e
sc
ope of ou
r audit wor
k and in eva
luatin
g the res
ults of o
ur
wor
k.
Report on the audit of the ﬁnancial st
atements
continued
Independent Auditor’s report
co
ntinued
15
8
GS
K Ann
ual R
epor
t 2021
Based on our pro
fessional judgement,
we de
termined
mater
iali
ty for th
e ﬁnan
cial s
tateme
nts as a wh
ole as f
ollows:
Group ﬁnancial statements
Parent company
ﬁnancial statements
Materiality
£27
5
million
(2020 – £2
90 mil
lion)
£68 million
(2020 – £
68 mil
lion)
Basis for
determining
materiality
In determining our
benchmark for
materiality
,
we considered
the
met
ric
s use
d by inve
stor
s and ot
her
readers of t
he ﬁnancial
statement
s.
In particular
, w
e considered
:
Statutory proﬁt bef
ore tax, Adjusted
pr
oﬁt b
efor
e ta
x, Rev
enue a
nd Net
cash ﬂows from
operations.
Using prof
essional judgement,
we
have d
eter
mine
d mater
ial
ity t
o be
£27
5 mil
lion.
Metric
%
Statutory proﬁt bef
ore tax
5
.1%
Adjusted proﬁt
before tax*
4
.1
%
Revenu
e
0.8%
Ne
t cas
h inﬂ
ow fro
m
operating acti
vities
3.5%
*
A reconciliation between the St
atutory
proﬁt before tax and Adjusted proﬁt
before tax is det
ailed in the Adjusting
Items section of the strategic report.
Materiality w
as
determined using the
total
assets benchmark
ca
ppe
d at 25% of
Group materiality.
Our
materiality represent
s
0.
1
% of tot
al as
set
s.
Rationale
for the
benchmark
applied
Given the importance of the above
metrics used by investors and other
readers of the ﬁnancial statements,
we concluded Statutory proﬁt
before tax to be the primary
benchmark with Adjusted proﬁt
before tax, Revenue and Net cash
inﬂow from operating activities the
supporting benchmarks.
The component materiality
allocated to the in-scope
components ranged between
£83 million and £193 million.
The range of materiality allocated
across components in the audit
of the prior year’
s Group ﬁnancial
statements was between
£8
7 million and £203 million.
The Parent compan
y
holds the
Group’
s
inve
stm
ents a
nd is no
t
in itself
proﬁt
-oriented.
Th
e stre
ngt
h of the
balance sheet
is
the k
ey
measure of
ﬁnancial
health that
is important
to shareholders
since
the primary concern for
the Paren
t company
is
the p
ayme
nt of
dividends. Using
a
benchmark of
t
otal
assets is t
herefore t
he
appropriate
metric.
We set per
fo
rmanc
e materi
alit
y at a level l
ower than m
ateria
lity
to red
uce the p
roba
bilit
y that, i
n aggre
gate, unc
orr
ected a
nd
undet
ected
misstat
ements
ex
ceed the
mat
eriality f
or t
he
ﬁna
ncia
l statem
ents as a w
hole
. Grou
p and Par
ent com
pany
per
fo
rmanc
e materi
alit
y was s
et at 70% of Gr
oup and P
arent
mater
iali
ty re
spec
tively f
or the 2021 audit (2020 – 70%
). In
determini
ng performance materiality
,
we considered
factors
including:
–
Our r
isk a
sse
ssme
nt, inc
ludin
g our as
ses
sment o
f the
Gr
oup’
s overa
ll cont
rol envi
ronme
nt and that we c
onsi
der it
app
ropr
iate to rely o
n contr
ols over a num
ber of bu
sine
ss
processes
;
and
–
Our p
ast ex
peri
ence o
f the audi
t, whi
ch has i
ndic
ated a low
number
of correct
ed an
d uncorrect
ed m
isstatem
ents
identiﬁed in prior
periods.
We agree
d with th
e Audit & R
isk C
ommit
tee tha
t we would
rep
or
t to the Co
mmit
tee all au
dit dif
fer
ence
s in exce
ss of £1
0
mill
ion (2020 – £
1
0 m
illion) as we
ll as any di
ff
erenc
es be
low
this t
hres
hold, w
hich i
n our view, war
ranted r
epor
tin
g on
qua
litati
ve groun
ds. We als
o repo
rt to th
e Audit & R
isk
Committee on disclosure
matters tha
t we
identiﬁed when
as
ses
sing th
e overal
l pres
entati
on of the ﬁ
nanci
al st
atements
.
5
. Conclusions rel
ating to going conc
ern
In a
uditin
g the ﬁna
ncia
l statem
ents, we h
ave conc
luded t
hat the
dir
ector
s’ use of the g
oing c
oncer
n bas
is of acc
ounti
ng in the
preparation of
the
ﬁnancial statemen
ts is
appropriat
e.
Our eva
luati
on of the di
rector
s’ ass
ess
ment of t
he Grou
p
’s and
Par
ent com
pany’s abi
lity to c
ontinu
e to adopt th
e going c
once
rn
basis of accounting included:
–
Enquiries of
the
Group d
irectors an
d managemen
t regardin
g
the a
ssum
ptions u
sed in t
he going c
onc
ern mo
dels
, inclu
ding
the p
otentia
l impac
t of clim
ate chang
e
;
–
Evalu
ating the G
roup’s exis
ting ac
ces
s to sourc
es of
ﬁnancing, including undrawn committed bank facilities
;
–
Rea
ding an
alyst r
epor
ts
, indus
tr
y data an
d other ex
tern
al
info
rmati
on to determ
ine if i
t provid
ed cor
robo
rative o
r
contradictory evidence in
relation
to
assumptions used
;
–
Comparing f
orecasted sales
to
recent h
istorical
ﬁnancial
information
;
–
T
esting the underlying
data gen
erated
to
prepare the
forecast
scenarios and det
ermined wheth
er there
was adequa
te
support for the
assumptions underlying
the f
orecast; and
–
Evalu
ating the G
roup’s disc
losur
es on go
ing co
ncer
n again
st
the r
equire
ments o
f IAS 1
.
Ba
sed on t
he work we have p
er
forme
d, we have not i
denti
ﬁed
any mate
rial u
ncer
ta
intie
s relati
ng to events or c
ondit
ions th
at,
indi
vidu
ally or c
olle
ctivel
y
, may ca
st sig
niﬁc
ant do
ubt on the
Gr
oup’
s and Pa
rent c
ompany
’
s abil
ity to c
ontinue a
s a goin
g
co
ncer
n for a per
iod of at le
ast t
welve m
onths f
rom whe
n the
ﬁnancial statements
are authorised for
issue.
In r
elatio
n to the rep
or
ting on how t
he Grou
p has ap
plie
d the
UK C
orp
orate G
overna
nce C
ode, we have n
othing ma
terial to
add o
r draw at
tention to i
n relati
on to the Di
recto
rs’ state
ment in
the ﬁ
nanci
al sta
tements a
bout w
hether t
he Dir
ector
s cons
idere
d
it ap
prop
riate to ado
pt the goi
ng conc
ern b
asis o
f acco
unting
.
Our responsibil
ities and
the
responsibilities
of t
he Direct
ors with
re
spec
t to going c
once
rn are d
escr
ibed i
n the relev
ant sec
tions
of this
report.
Report on the audit of the ﬁnancial st
atements
continued
Independent Auditor’s report
co
ntinued
GS
K Ann
ual R
epor
t 2021
15
9
Strategic report
Governance and remuneration
Financial statements
Investor information
Key audit matter description
How the scope of our audit responded to the key audit matter
V
aluation of the V
iiV Healthcare Shionogi contingent
consideration liability
Th
e Grou
p has c
omple
ted a numb
er of si
gniﬁ
can
t tran
sact
ions
which resulted
in t
he recognition
of mat
erial conti
ngent
consideration
liabilities, wh
ich are
a k
ey so
urce of
estimation
unc
er
tai
nty. The m
ost si
gniﬁ
can
t of thes
e liab
iliti
es wa
s the
ViiV Healthcare Shionogi Contingen
t Consideration Liability
(ViiV CCL)
.
Th
e Grou
p comp
leted th
e acqu
isiti
on of th
e rema
ining 5
0%
inte
rest i
n the Sh
ionog
i-Vii
V Heal
thc
are joi
nt ventu
re in 201
2.
Upon completion, t
he Group
recognised a cont
ingent
co
nsid
erati
on lia
bilit
y for th
e fair va
lue of th
e expe
cted fu
ture
paym
ents to b
e made to S
hiono
gi. As a
t 3
1 Dec
embe
r 202
1
the l
iabil
ity w
as valu
ed at £
5,55
9 milli
on.
We iden
tiﬁe
d the Vi
iV CC
L as a key a
udit m
atter b
eca
use of th
e
signiﬁcant management estima
tes and
assumptions rela
ting
to
the s
ale
s forec
as
ts use
d in valu
ing the V
iiV C
CL an
d the
se
nsiti
vit
y of the va
luati
on to thes
e inpu
ts. T
he mos
t sign
iﬁc
ant
of th
ese re
late to sa
les fo
reca
sts i
n the Uni
ted Sta
tes (US) on
cer
tain products
in the
treatment
por
tfolio.
Such forecasts are
ba
sed on a
n as
ses
sment o
f the exp
ecte
d launc
h dates
, the
ability to
shift market
practice
and prescriber
behaviour
t
owards
long-acting
injectable treatmen
ts and
2-drug
regimens, the
co
ntinui
ng imp
act of C
OVID
-
1
9 re
lated r
estr
icti
ons on H
IV
prescriptions and
subsequent sales v
olumes and
pricing. The
forecasts also
required
signiﬁcant
audit
effort to perform
appropriate
audit procedures
to
challenge and
evalua
te
the
reasonableness of those f
orecasts
.
As s
et out in N
ote 4
7 ‘Po
st bal
ance s
heet eve
nts’ of th
e Grou
p
ﬁn
anci
al state
ment
s, the a
gree
ment re
ache
d with G
ile
ad to
settle the g
lobal pat
ent in
fringement lit
igation
relating
to
commercialisation of
Gilead’
s Biktar
vy increases the fut
ure
consideration pa
yable t
o Sh
ionogi and
therefore
impacts t
he fair
val
ue of the V
iiV C
CL
. As a r
esul
t, in ou
r audit we a
ss
ess
ed
management’
s estimat
e of
this
impact.
Contingent
consideration
liabilities, i
ncluding
the
ViiV CCL
, are
dis
clos
ed as a key s
ourc
e of es
timati
on unc
er
tain
ty in N
ote 3 of
the Group
ﬁnancial stat
ements with
further disclosures pro
vided
in N
otes 28, 32 a
nd 43
. The m
atter i
s also d
iscu
sse
d in the
Aud
it & Ris
k Com
mit
tee rep
or
t with
in the C
orpo
rate
Gove
rnan
ce se
ctio
n of the A
nnual R
epor
t.
Audit procedur
es performed
W
e performed the following
audit procedures, amongst others,
related
to
the sales f
orecasts:
–
Ob
tain
ed the G
roup’s as
ses
smen
t of the key in
puts an
d
as
sump
tions u
sed in t
he fore
ca
sts and e
valuate
d their
appropriateness
,
including through
enquiries of ke
y individuals
from the
senior leadership
team, commercial stra
tegy t
eam and
key
personnel inv
olved in
the budgeting
and f
orecasting proces
s,
and inspection
of
supporting eviden
ce;
–
Ch
alle
nged th
e US volu
me as
sumpt
ions ma
de by the G
roup to
estimat
e sales
forecasts. This
inv
olved
benchmarking
forecast
mar
ket sha
re dat
a agai
nst ex
tern
al dat
a, su
ch as tot
al
prescription v
olumes and
new pa
tient prescript
ion vol
umes, in
ord
er to as
ses
s for any s
ourc
es of c
ontra
dicto
ry ev
iden
ce;
–
Eval
uated th
e rea
sona
blen
ess of U
S pri
cing a
ssum
ption
s by the
Gr
oup, by co
mpar
ing th
e forec
aste
d Retur
ns and R
ebate
s rate
by pr
oduct a
gain
st the cu
rre
nt rate, a
nd as
ses
sing th
e fore
cas
ted
Returns and Rebates
against compar
able products and
exp
ecte
d chang
es in p
ayer poli
cy;
–
C
onsi
dere
d the re
sults o
f clini
cal s
tudie
s unde
rt
aken in t
he year
by the G
roup a
nd key co
mpeti
tors in o
rder to a
sse
ss w
hethe
r
these are corroborative
or contradictory to
assumptions used
in the
product port
folio
sales forecasts in the US
;
–
Be
nchm
arked t
he Gro
up’
s sa
les for
eca
sts ag
ains
t thos
e
included in
reports from 1
4 analysts
and considered sales
for
eca
sts on b
oth a tota
l Vii
V basi
s and an i
ndiv
idua
l prod
uct
basis, asses
sin
g again
st identiﬁed
contradict
ory data;
–
Inspected t
he ag
reement
with Gi
lead and
ev
aluat
ed
management’
s approach
to
ensure it
meets rele
vant
accounting
st
anda
rds re
quire
ment
s and tha
t the inp
uts use
d in es
timati
ng
the i
mpac
t on the fa
ir valu
e of the V
iiV C
CL ar
e cons
isten
t with
the a
gree
ment an
d exte
rna
l data; an
d
–
T
este
d the co
ntrol
s over the key in
puts a
nd as
sumpt
ions us
ed
in the
valua
tion o
f the
conting
ent considera
tion l
iability
, in
cluding
rev
iew con
trols ov
er the s
ales fo
rec
ast
s of the tr
eatme
nt prod
uct
por
t
folio u
sed to va
lue the V
iiV C
CL
.
Key observations communicated to the Audit & Risk Committee
Th
e sale
s fore
ca
sts use
d in the va
luati
on are r
eas
onab
le and i
n line
with relev
ant supporting in
formation.
W
e are
satisﬁed that
the sales
forecasts are reasonable appropriat
ely reﬂect tren
ds in t
he o
verall
HI
V tre
atmen
t marke
t inclu
ding c
hange
s in the c
omp
etiti
ve
environment
and shifts t
owards
both l
ong-acting
injectable
treatments
and 2
-drug regimens.
Th
e appr
oach to va
luing th
e Vii
V CC
L was co
nsis
tent wi
th prio
r
pe
riod
s and over
all we ar
e sati
sﬁe
d that the v
aluat
ion lia
bili
ty is
reasonable and consisten
t with
IFRS
.
6
. K
e
y audit mat
ters
Key audi
t matte
rs ar
e those m
atter
s that, i
n our prof
essi
onal j
udgem
ent, wer
e of mos
t signi
ﬁca
nce in o
ur audi
t of the ﬁna
ncia
l
st
atements o
f the cur
rent pe
riod a
nd incl
ude the m
ost si
gniﬁ
cant a
sse
sse
d risk
s of materi
al mis
statem
ent (
whe
ther or no
t due to
fr
aud) that we i
denti
ﬁed. T
hes
e matte
rs inc
luded t
hose w
hich ha
d the gre
atest ef
fec
t on the over
all au
dit str
ategy, the allo
cati
on of
re
sourc
es in th
e audit a
nd dire
cting th
e ef
for
ts of the en
gagem
ent team
.
Th
ese mat
ters we
re addr
ess
ed in the c
ontex
t of our a
udit of th
e ﬁnanc
ial st
atemen
ts as a wh
ole, an
d in form
ing our o
pinion o
n the
ﬁna
ncia
l statem
ents as a w
hole
, we do not pr
ovide a se
para
te opinio
n on the
se mat
ters
.
Independent Auditor’s report
co
ntinued
Report on the audit of the ﬁnancial st
atements
continued
16
0
GS
K Ann
ual R
epor
t 2021
Report on the audit of the ﬁnancial st
atements
continued
Independent Auditor’s report
co
ntinued
Key audit matter description
How the scope of our audit responded to the key audit matter
V
aluation of US Returns and Rebates (RAR) accruals
In the US
the Group
sells t
o cu
stomers under
various
commercial
and gov
ernment manda
ted
contracts and
reimbursement
arrangements that
include
rebates, chargebacks
and a
right o
f
return for
cert
ain
pharmaceutical products. As such, reven
ue
recognition reﬂects gross-
to-net
sales adjustments. These
adj
ustm
ents ar
e know
n as th
e Retur
ns and Re
bates (R
A
R)
ac
crua
ls and a
re a sou
rce of s
igni
ﬁca
nt est
imatio
n unce
rt
aint
y
whi
ch co
uld have a mate
ria
l impac
t on rep
or
ted reve
nue.
In t
he US Ph
arma
ceut
ica
ls bus
ines
s in 2021 $
1
7
,
2
1
5 m
illio
n of
R
AR d
educ
tions we
re mad
e to gros
s revenu
e of $3
3,5
98 mill
ion,
re
sulti
ng in net r
evenue o
f $
1
6,3
83 mil
lion. T
he ba
lanc
e shee
t
ac
crua
l at 3
1 Dec
embe
r 202
1 for th
e comb
ined U
S
Pharmaceutica
ls
and V
a
ccines businesses amounted t
o $6,
795
million.
Th
e three m
ost s
igni
ﬁca
nt payer ch
anne
ls (
als
o refe
rred to a
s
buy
ing gr
oups) to whic
h the R
AR a
ccr
ual re
lates ar
e mana
ged
healthcare organisat
ions, Medicaid, Ryan Whit
e and
Medicare
Par
t D.
Th
e two ma
in cau
ses o
f signi
ﬁc
ant es
timati
on unc
er
tain
ty ar
e
:
–
Th
e utili
sati
on rate, w
hich i
s the po
rti
on of tot
al sal
es tha
t will
be m
ade into e
ach paye
r chan
nel, e
stim
ated by the G
roup i
n
recording the accruals. The utilisation
assumption is the
most
cha
llen
ging of t
he key as
sumpt
ions us
ed to der
ive the a
ccr
ual
give
n that it i
s inﬂ
uenc
ed by mar
ket dem
and an
d other f
actor
s
out
side t
he cont
rol of th
e Grou
p
; and
–
Th
e time l
ag bet
ween th
e poin
t of sal
e and the p
oint at w
hich
exa
ct reb
ate amou
nts are k
now
n to the Gro
up upo
n rece
ipt of
a cla
im. T
hose p
ayer cha
nnel
s with th
e long
est ti
me lag re
sult
in a gr
eater a
ccru
ed per
iod
, and the
refo
re, a gre
ater leve
l of
es
timati
on unc
er
tain
ty in e
stim
ating th
e peri
od end a
ccr
ual.
Th
e level of e
stim
ation un
cer
ta
inty i
s als
o impac
ted by si
gniﬁ
cant
shi
ft
s in cha
nnel mi
x driv
en by cha
nges i
n the co
mpeti
tive
landscape, including compet
itor
and generic pr
oduct launches
and o
ther ma
croe
cono
mic fa
ctors
. As s
uch, we fo
cus on t
he
uti
lisat
ion a
ssum
ption
s for tho
se pro
ducts w
her
e we deem t
he
leve
l of est
imatio
n unce
rt
aint
y to be th
e most s
igni
ﬁca
nt.
Furthermore, auditing standards
presume that
a sign
iﬁcant fraud
risk exists
in re
venue
recognition. In lin
e with
this presumpt
ion, we
als
o focu
s on the p
erio
d-en
d adjus
tmen
ts made to t
he R
AR
ac
crua
ls. T
hes
e adjus
tment
s reﬂ
ected u
pdate
s made to th
e initi
al
as
sump
tions i
nclu
ded wi
thin th
e forec
as
ted R
AR ra
tes and
, in our
vi
ew
, pre
sent th
e greate
st op
por
tuni
ty for f
raud i
n revenu
e
recognition (
notwithstanding the exist
ence of in
ternal controls
).
US P
harm
aceu
tic
als ret
urns a
nd reb
ates are d
iscl
osed a
s a key
sou
rce of e
stim
ation u
ncer
ta
int
y in Note 3 of t
he Gro
up ﬁna
ncia
l
st
atemen
ts with f
ur
ther di
sclo
sure
s prov
ided i
n Note 28. T
he
mat
ter is a
lso dis
cus
sed in t
he Audi
t & Ris
k Com
mitte
e rep
ort
wi
thin the C
or
porate G
overn
ance s
ect
ion of th
e Annu
al Rep
ort
.
Audit procedur
es performed
W
e performed the following
audit procedures, amongst others,
rel
ated to es
timate
s in the R
A
R accr
ual
s
:
–
Challenged assumptions f
or a
selection of
utilisation
rates,
focusing on
certain products where we
concluded th
e accrual is
mos
t sens
itive to t
hese a
ss
umptio
ns. O
ur cha
llen
ge incl
uded
comparison to
historical uti
lisation ra
tes, consideration
of
his
toric
al ac
cura
cy and dr
iver
s of mar
ket cha
nges s
uch a
s the
impact of
ongoing gen
eric competition
and the
macroeconomic
imp
acts f
rom the C
OVI
D-
1
9 p
ande
mic;
–
Supplemented
this with
substantive
analytical procedures by
deve
lopin
g an ind
epen
dent ex
pect
atio
n of the ac
crua
l bal
ance
for e
ach of th
e key segm
ents
, bas
ed on hi
stori
cal c
laim
s rece
ived
adj
usted to r
eﬂe
ct mar
ket cha
nges i
n the per
iod i
nclud
ing an
as
ses
sme
nt of the ti
me lag b
etwe
en the i
nitia
l point o
f sal
e and
the claim
receipt. W
e
then compared t
his independent
exp
ect
ation to th
ose re
cor
ded to eval
uate the a
ppro
priate
nes
s of
the y
ear endin
g accrual posit
ion
;
–
Considered the
hist
orical accura
cy of
estima
tes
and e
valua
ted
whether f
orecast assumptions had been
appropriately
updat
ed in
a selection o
f cases where the
actual reba
te
claims differed to
the amount
accrued;
–
Challenged the
appropriateness of
, and
completeness o
f,
pe
riod
-end a
djust
ments to t
he lia
bilit
y mad
e as par
t of t
he
ong
oing r
eview of th
e esti
mated a
ccru
al; and
–
T
este
d the key co
ntrol
s over the e
stim
ation of R
A
R acc
rual
s
including the
controls associated with
the f
orecasting of
uti
lisat
ion ra
tes pro
ces
s and th
e month
-end a
ccru
al rev
iew
controls.
Key observations communicated to the Audit & Risk Committee
We are s
atisﬁ
ed tha
t the es
timate
d liabi
lit
y of the R
AR a
ccr
uals at
the ye
ar-en
d is app
ropr
iate. We obs
er
ved a level o
f prud
enc
e in
the e
stim
ate when a
ss
ess
ing aga
inst o
ur own in
depe
ndent
exp
ect
ations
, whi
ch is in a
cco
rdan
ce wit
h the req
uire
ments o
f IFR
S
1
5 Revenu
e from c
ontr
acts wi
th cus
tomer
s to limi
t the ris
k of a
signiﬁcant reversal of
rev
enue.
GS
K Ann
ual R
epor
t 2021
161
Strategic report
Governance and remuneration
Financial statements
Investor information
Report on the audit of the ﬁnancial st
atements
continued
Key audit matter description
How the scope of our audit responded to the key audit matter
V
aluation of other intangible assets
As at 31 De
cemb
er 2021
, th
e Gro
up held £
29,
1
1
5 mill
ion of
other in
tangible assets (
including
licences, patents,
trademarks
and b
ran
d name
s, but e
xclud
ing goo
dwil
l and co
mpute
r
soft
ware
). The recov
erable amount
of t
hese other
intangible
assets relies on certain assumptions and
estimates
of fut
ure
trading performance which creat
e estima
tion uncertainty.
Th
e ass
ets mo
st at ris
k of mater
ial im
pair
ment we
re ide
ntiﬁ
ed
usi
ng sen
siti
vit
y anal
ysis o
n key ass
umpti
ons an
d a review o
f
pote
ntial t
rigg
erin
g events th
at coul
d be ind
icati
ve of an
imp
airm
ent in t
he car
ry
ing val
ue of as
soc
iated a
sse
ts. As a
result of
this analysis,
we performed additional
audit procedures
on certain indeﬁnite lif
e Consumer Healthcare intangible
assets.
Key
assumptions applied
in de
termining
the reco
verable amoun
t
inc
lude th
e futur
e sal
es grow
th r
ates an
d proﬁ
t marg
in level
s, as
well a
s the li
keliho
od of su
cce
ssf
ul new pr
oduc
t innovat
ions
.
Ch
ange
s in the
se as
sumpt
ions c
ould le
ad to an im
pair
ment o
f
the c
arr
yi
ng valu
e of the oth
er int
angib
le as
sets
.
We iden
tiﬁe
d the val
uatio
n of othe
r inta
ngibl
e ass
ets as a key
aud
it mat
ter due to th
e inhe
rent ju
dgem
ents invo
lved in
es
timati
ng futu
re ca
sh ﬂow
s. Du
ring th
e year th
ere wa
s
increase
d
uncer
tainty brought about
by the
COVID
-
1
9
pandemic and
associated
lockdo
wns. Auditi
ng such
estimat
es
re
quire
d exte
nsive a
udit e
ffo
rt to ch
alle
nge an
d evalua
te the
reasonableness of forecasts.
The disclosures relat
ing t
o o
ther intangi
ble assets are
included
in N
ote 20 and 40 o
f the Gr
oup ﬁn
ancia
l state
ment
s. Th
e matte
r
is a
lso dis
cus
sed in t
he Audi
t & Risk C
omm
itte
e repo
rt w
ithi
n
the C
orp
orate G
overn
ance s
ecti
on of the A
nnua
l Repo
rt
.
Audit procedur
es performed
W
e performed the following
audit procedures, amongst others,
rel
ated to the f
uture s
ale
s grow
th, l
ikelih
ood of s
ucce
ss
ful new
pro
duct i
nnovati
ons an
d proﬁ
t marg
in level
s used i
n the as
ses
sme
nt
of oth
er int
angib
le as
sets fo
r impa
irme
nt:
–
M
et with t
he key indi
vidu
als fr
om the s
enior l
eade
rsh
ip team
,
pro
duct c
atego
ry l
eads
, and key p
ers
onnel i
nvolve
d in the
for
eca
stin
g proc
ess to di
scus
s and eva
luate th
e Grou
p’
s
evi
denc
e to supp
ort f
uture s
ale
s grow
th ra
tes and p
roﬁt
abil
ity
assumptions;
–
Eval
uated th
e Grou
p
’s risk a
ss
ess
ment of t
he impa
ct of cl
imate
change on
long t
erm forecasts which
focused on
the largest
pro
duct
s with m
ateria
l car
ry
ing val
ues an
d the le
ast h
eadr
oom
by co
mpar
ing to ex
tern
al dat
a point
s.
–
Eval
uated th
e busi
ness a
ss
umpti
ons app
lied i
n esti
matin
g sale
s
and gross proﬁt margin f
orecasts
,
including benchmarking of
for
eca
sts ag
ains
t exte
rnal m
arket d
ata an
d actua
l trad
ing
per
f
ormance costs. This included
independent mark
et research
of ex
pecte
d categ
or
y grow
th and a
ss
ess
ment of a
ny sour
ces of
contradict
ory evidence
;
–
C
ompa
red th
e forec
ast s
ale
s and gr
oss p
roﬁt m
argi
ns to the
Pl
an dat
a (
as
set by as
set in
terna
l fore
cas
ts
) app
roved by th
e
GS
K Lea
ders
hip T
eam a
nd the B
oard of D
ire
ctor
s
;
–
Assessed the hist
orical a
ccuracy o
f f
orecasts includ
ing
co
nsump
tion da
ta and e
stim
ates of new s
ale
s from i
nnovati
on;
–
Considered whether ev
ents
or transactions
that
occurred after
the b
alan
ce she
et date bu
t befo
re the re
por
ting d
ate af
fect t
he
co
nclus
ions r
each
ed on th
e car
ry
ing valu
es of th
e ass
ets an
d
associated
disclosures
;
and
–
T
es
ted revi
ew cont
rols ove
r the key inp
uts an
d ass
umpti
ons us
ed
in th
e valuat
ion of ot
her int
angi
ble as
set
s. Th
e contr
ols
encompass review
of
the v
aluation
models, which
contain
a
num
ber of a
ssu
mptio
ns such a
s the rev
enue gr
owt
h rates a
nd
proﬁt margins.
Key observations communicated to the Audit & Risk Committee
Our audit
challenged the
future
forecast performance of consumer
healthcare products, and we concluded
that t
he assumptions
underpinning
the impairment
review
of
intangible assets w
ere
re
ason
able a
nd in ac
cor
danc
e with I
FRS
.
Independent Auditor’s report
co
ntinued
16
2
GS
K Ann
ual R
epor
t 2021
Report on the audit of the ﬁnancial st
atements
continued
Independent Auditor’s report
co
ntinued
Key audit matter description
How the scope of our audit responded to the key audit matter
V
aluation of uncertain t
ax positions, including transfer
pricing
The Group operat
es in
numerous
jurisdictions and
there
are
ope
n ta
x and tr
ans
fer pri
cing m
atter
s and ex
pos
ures w
ith UK
,
US a
nd overs
ea
s ta
x autho
riti
es that g
ive ris
e to unce
rt
ain t
ax
positions. There is
a wide range
of possible o
utcomes for
provisions
and contingencies. Certain judgements in
respect of
estimates
of tax exposures and
contingencies are
required in
ord
er to as
ses
s the ad
equa
cy of ta
x prov
isio
ns, w
hich a
re
sometimes complex
as a result
of t
he considerations
required
over
multiple
tax laws and
regulation
s.
At 31 Dec
embe
r 202
1
, the Gro
up ha
s reco
rded p
rovis
ions o
f
£
858 mi
llion i
n resp
ect of u
ncer
t
ain ta
x po
siti
ons.
Valuati
on of un
cer
tai
n ta
x pos
ition
s is dis
clos
ed as a key s
ourc
e
of e
stimat
ion un
cer
tai
nty i
n Note 3 of th
e Grou
p ﬁnan
cial
st
atemen
ts with f
ur
ther di
sclo
sure
s incl
uded i
n Note 1
4. The
mat
ter is a
lso dis
cus
sed in t
he Audi
t & Ris
k Com
mitte
e rep
ort
wi
thin the C
or
porate G
overn
ance s
ect
ion of th
e Annu
al Rep
ort
.
Audit procedur
es performed
Wi
th the su
ppor
t of ta
x sp
eci
alis
ts, we a
sse
sse
d the
app
ropr
iaten
ess of t
he unc
er
tain t
ax p
rovis
ions by p
er
form
ing the
following
audit procedures amongst ot
hers:
–
Asses
sed
and ch
allenged pr
ovisions
for
uncertain ta
x
positions
thr
ough th
e evaluat
ion of p
oss
ible ou
tcome
s. O
ur pro
cedu
res
wer
e focus
ed on th
ose ju
risd
ictio
ns whe
re the G
roup h
as the
gre
atest p
otenti
al exp
osur
e and wh
ere th
e highe
st leve
l of
judgement is
required
;
–
As
ses
sed t
he as
sumpt
ions an
d judg
ement
s that ar
e requ
ired to
determine
the range
of possible
outcomes fo
r recognition
and
measurement of
uncertain ta
x
positions
in compl
iance with
the
re
quire
ments o
f IFR
IC 23;
–
Involv
ed ou
r tran
sfer pric
ing special
ists t
o
eval
uat
e the
transf
er
pricing methodology
of
the Group
and associated
approach t
o
provision recognit
ion and m
easurement;
–
Considered evidence such as
the act
ual results
from the
recent
ta
x
authority a
udits and
enquiries, t
hird-party ta
x
advice obtained
by the G
roup a
nd our t
ax s
peci
alis
ts’ own k
nowle
dge of m
arket
practice in rele
vant
jurisdictions
; and
–
T
este
d key cont
rols ove
r prepa
rati
on, rev
iew and r
epor
ti
ng of
judgmental tax balances and transactions, which
include
provisions
for uncertain tax provisions.
Key observations communicated to the Audit & Risk Committee
We are s
atisﬁ
ed tha
t the es
timate
s in rel
ation to un
cer
ta
in ta
x
po
sitio
ns and t
he rela
ted dis
clos
ures a
re in ac
cord
anc
e with I
FRS
.
Fro
m our wor
k we conc
lude
d that a co
nsis
tent ap
proac
h has b
een
applied t
o estimati
ng uncertain ta
x
provisions
which, whilst
co
ntinui
ng to be pr
udent a
s req
uire
d by IFR
IC 23
, are a
ppro
priate
and supportable.
GS
K Ann
ual R
epor
t 2021
16
3
Strategic report
Governance and remuneration
Financial statements
Investor information
Report on the audit of the ﬁnancial st
atements
continued
Key audit matter description
How the scope of our audit responded to the key audit matter
IT systems which impact ﬁnancial r
eporting
Th
e IT sys
tems wi
thin th
e Grou
p form a cr
itic
al co
mpon
ent of
the G
roup’s ﬁna
ncia
l repo
rt
ing act
ivit
ies an
d impa
ct all a
ccou
nt
balances.
We iden
tiﬁe
d the I
T system
s that im
pact ﬁ
nanc
ial re
por
ting a
s a
key aud
it mat
ter be
caus
e of the:
–
Pervasive reliance on complex
techn
ology tha
t is in
tegral t
o
the o
pera
tion of key b
usin
ess p
roce
sse
s and ﬁ
nanc
ial
repor
tin
g;
–
Re
lianc
e on tec
hnolo
gy whi
ch co
ntinue
s to incr
eas
e in line
wi
th the bu
sine
ss str
ategy, suc
h as the i
ncre
ase i
n the use o
f
automation
across the Group
;
–
Impor
tance of t
he IT controls
in maintaining
an effective
control en
vironment. A
ke
y int
erdependency e
xists between
the a
bilit
y to rel
y on IT c
ontro
ls and t
he abi
lity to r
ely on
ﬁnancial da
ta, syst
em conﬁgured
aut
omat
ed con
trols
and
system
reports;
–
Continued remediation of
IT controls supporting the
application sy
stems
relevant
to
the
Group’
s
ﬁnancial
reporting activities
; and
–
The implementation
of applicat
ion syst
ems in
ke
y business
ar
eas du
ring th
e year.
IT s
ystems w
hich i
mpac
t ﬁnan
cial r
epor
ti
ng are di
scus
sed i
n
the A
udit & R
isk C
ommi
ttee r
epor
t wi
thin th
e Cor
porate
Gove
rnan
ce se
ctio
n of the A
nnual R
epor
t.
Audit procedur
es performed
Our I
T aud
it sco
pe is dr
iven by th
e level of r
elia
nce pl
ace
d on
technology
to
obtain
sufﬁcient audit e
vidence within
a b
usiness
process
.
The t
echnology deemed rel
evant
to
the a
udit is
based on
the ﬁ
nanc
ial da
ta, s
ystem c
onﬁg
ured a
utomate
d cont
rols an
d/or key
ﬁn
anci
al rep
or
ts that re
sid
e withi
n it. We use
d IT sp
ecia
list
s to
sup
por
t our eva
luati
on of the r
isks a
ss
ociate
d with te
chno
logy a
nd
wi
th the tes
ting of t
he des
ign an
d oper
ation o
f IT co
ntrol
s.
T
es
t
ing o
ver
the t
echnology deemed
relevant
to
the
audit included
the follo
wing areas:
–
Ge
ner
al IT c
ontro
ls, in
clud
ing use
r acc
ess a
nd cha
nge
management cont
rols;
–
Key ﬁn
anci
al rep
or
ts and sy
stem co
nﬁg
ured au
tomated c
ontr
ols;
–
Controls to
provide
assurance over
the complet
eness and
accuracy of relevant data migrations
; and
–
T
e
stin
g of
remediation
of pre
viously identiﬁed deﬁciencies.
Our r
isk a
sse
ssm
ent pr
oced
ures i
nclu
ded an a
sse
ssm
ent of th
e
imp
act of a
ll unre
medi
ated IT c
ontr
ol deﬁ
cien
cie
s to determ
ine the
impact on
our audit
plan. Where rel
evant,
the aud
it plan w
as
adj
usted to i
nclud
e the tes
ting of a
ddit
ional m
anua
l busi
nes
s
pro
ces
s con
trols to m
itiga
te the una
ddre
sse
d IT ri
sk.
Key observations communicated to the Audit & Risk Committee
We are s
atisﬁ
ed tha
t IT co
ntrol
s impac
ting th
e Gro
up’
s ﬁna
ncia
l
reporting activities are designed
and operatin
g effectively or
control
deﬁciencies identiﬁed w
ere remed
iated
by
year
end or
mitiga
ted
by
compensating controls.
Si
gniﬁ
cant p
rogr
ess wa
s mad
e in the ye
ar in re
media
ting co
ntrol
deﬁciencies relating
to
user access and change
management. The
Gr
oup ha
s many laye
rs of bu
sine
ss pr
oce
ss con
trols to m
itig
ate the
risk associated
with
the remain
ing IT
control d
eﬁciencies.
Independent Auditor’s report
co
ntinued
16
4
GS
K Ann
ual R
epor
t 2021
Report on the audit of the ﬁnancial st
atements
continued
7
. Ot
her i
nformation
Th
e other in
formati
on com
pris
es the in
forma
tion inc
lude
d in the An
nual Re
por
t, othe
r than th
e ﬁnan
cial st
atemen
ts and ou
r auditor
’
s
report thereon. The Directors are
responsible for
the o
ther inf
ormation
contained within
the Annual
Report. Our opinion on
the
ﬁna
ncia
l statem
ents do
es not cove
r the othe
r infor
mation a
nd, exc
ept to the ex
tent oth
er
wise ex
plic
itly st
ated in ou
r repor
t, we d
o
not e
xpress any f
orm of assurance conclusion
thereon.
Our responsibility is t
o read
the o
ther in
formation
and, in do
ing so,
consider whether
the
other i
nformation
is mat
erially i
nconsistent
wit
h the ﬁna
ncia
l statem
ents or ou
r know
ledge o
btai
ned in co
urse o
f the audi
t or othe
rw
ise ap
pear
s to be mater
iall
y miss
tated.
If we iden
tify such mat
erial inconsisten
cies or apparent
mat
erial misstatemen
ts, we
are required
to
determine
whether
this giv
es rise
to a mater
ial mis
state
ment in t
he ﬁnan
cial s
tateme
nts them
selve
s. I
f, base
d on the wor
k we have per
for
med, we c
oncl
ude that th
ere
is a mate
rial m
isst
atemen
t of this oth
er infor
matio
n, we are r
equir
ed to repo
rt th
at fact
.
W
e summarise
below our
work
in relat
ion t
o areas of
the ot
her inf
ormation in
cluding t
hose areas upon which
we
are speciﬁcally
required t
o report:
Matters we are speciﬁcally requir
ed to report
Our responsibility
Our reporting
Principal risks and viability statement
Revi
ew the c
onﬁr
matio
n and de
scr
iptio
n in the li
ght of the k
now
ledg
e
gath
ere
d durin
g the aud
it, su
ch as th
roug
h cons
ider
ing the d
irec
tors’
processes to support the stat
ements
made, challeng
ing k
ey j
udgements
and estim
ates,
considerati
on of
hist
orical fo
recasting accu
racy and
ev
aluat
ing
macro-economic assumptions.
Consider if the
statements
are alig
ned with
the rele
vant
provisions
of the
Code.
As s
et out in t
he “C
orpo
rate gove
rnan
ce st
atement
”
se
ction
, we have not
hing mate
ria
l to repor
t
, add or dr
aw
at
tentio
n to in res
pec
t of thes
e mat
ters
.
Directors’
Remuneration report
Rep
or
t whet
her the p
ar
t of the D
irec
tors’ Re
muner
ation r
epor
t to be a
udite
d
is properly prepared
and the
disclosures speciﬁed by
the
Companies Act
have be
en mad
e.
As s
et out in t
he ‘Op
inion
s on othe
r matte
rs pr
escr
ibe
d by
the C
omp
anie
s Act 20
06’ se
ctio
n, in ou
r opini
on, th
e par
t
of th
e direc
tors’ r
emune
ratio
n repo
rt to b
e audi
ted has
been prepared
in accordance wit
h the
Companies Act
200
6.
Strategic report and directors’
report
Rep
or
t whet
her they a
re co
nsis
tent wit
h the aud
ited ﬁn
anci
al sta
tement
s and
are prepared in
accordance with applicable
legal requirements.
Rep
or
t if we have id
enti
ﬁed a
ny materi
al mis
state
ment
s in eith
er rep
or
t in the
lig
ht of the k
nowl
edge a
nd unde
rst
andi
ng of the G
roup a
nd of the P
aren
t
co
mpany a
nd thei
r envir
onmen
t obta
ined i
n the cou
rse o
f the aud
it.
As s
et out in t
he “Op
inion
s on othe
r matte
rs pr
esc
ribe
d
by the C
omp
anie
s Act 20
06” se
ctio
n, in ou
r opini
on,
ba
sed on t
he work u
nder
ta
ken in the c
our
se of the a
udit
,
the i
nform
ation i
n thes
e repo
rt
s is con
siste
nt with t
he
audit
ed ﬁnancial
stat
ements
and
has been
prepared i
n
accordance with
applicable legal
requirements.
Independent Auditor’s report
co
ntinued
GS
K Ann
ual R
epor
t 2021
16
5
Strategic report
Governance and remuneration
Financial statements
Investor information
Other repor
ting
on other i
nformation
Our responsibility
Our reporting
Alternative performance measures (APMs)
AP
Ms a
re mea
sure
s that a
re not de
ﬁned b
y gener
all
y acce
pted ac
coun
ting
pr
actic
e (
GA
A
P) and th
erefo
re are n
ot typ
ica
lly inc
lude
d in the ﬁ
nanc
ial
st
atemen
t par
t of the A
nnua
l Repo
rt
. The G
roup us
e AP
Ms, s
uch a
s adjus
ted
pro
ﬁt, f
ree c
ash ﬂ
ow and co
nsta
nt cur
renc
y grow
th rate
s in its r
epor
tin
g of
ﬁnancial performance.
We have revi
ewed an
d ass
ess
ed the c
alcu
latio
n and re
por
ting o
f thes
e
met
ric
s to ass
ess c
onsi
stenc
y with th
e Grou
p
’s publi
she
d deﬁn
ition
s and
policies fo
r these
items.
We have als
o cons
ider
ed and a
ss
ess
ed whe
ther th
e use of A
PM
s in the
Group’
s
reporting results is
consistent
with the
guidelines
produced by
re
gulator
s suc
h as the E
urope
an Se
curi
ties a
nd Ma
rkets Au
thor
ity (E
SM
A)
gui
delin
es on th
e use of A
PM
s and th
e FRC A
ltern
ative Per
fo
rman
ce
Me
asu
res T
hemat
ic Revi
ew publi
shed i
n Octob
er 2021
.
W
e also considered
whether
there was
an appropriat
e balance be
tween the
us
e of statu
tor
y metri
cs an
d AP
Ms, i
n addi
tion to wh
ether c
lea
r deﬁn
itio
ns and
reconciliation f
or APMs used in
ﬁnancial reporting hav
e been
provided.
In our opinion
:
–
the use, calcula
tion and
disclosure of
APMs is
co
nsis
tent wit
h the Gr
oup’s publi
shed d
eﬁni
tions a
nd
policies;
–
the u
se of A
PMs i
n the Gr
oup’s repo
rti
ng res
ults i
s
co
nsis
tent wit
h the gui
delin
es pr
oduc
ed by ES
MA an
d
FRC;
and
–
the
re is an a
ppro
pria
te bala
nce be
twe
en the us
e of
st
atutor
y met
rics a
nd AP
Ms
, togeth
er wi
th cle
ar
deﬁnitions and
reconciliation
for APMs used in
ﬁnancial
repor
tin
g.
Dividends and distribution policy
Consider whether
the
dividends pol
icy is
transparent,
and the
dividends
paid
ar
e cons
istent w
ith th
e polic
y
, as ou
tline
d in the st
rategi
c repo
rt o
n page 6
9.
In our opin
ion the
dividends polic
y is appro
priately
disclosed, and
dividends paid
are con
sistent
with t
he
policy
.
Report on the audit of the ﬁnancial st
atements
continued
Independent Auditor’s report
co
ntinued
8
. Responsibiliti
es of directors
As ex
plain
ed mor
e fully in t
he dire
ctors’ r
espo
nsibi
litie
s
statement,
the di
rectors are responsible
for
the preparat
ion of
the ﬁ
nanci
al sta
tements a
nd for be
ing sat
isﬁe
d that they g
ive a
tru
e and fai
r view, and for s
uch inter
nal c
ontrol a
s the dir
ector
s
determine
is necessar
y t
o en
able the
preparation o
f ﬁnancial
statement
s that
are free
from mat
erial misstat
ement, wheth
er
due to fr
aud or e
rror.
In p
repar
ing the ﬁ
nanc
ial st
atement
s, the di
recto
rs are
re
spons
ible fo
r ass
ess
ing the G
roup’s and the Pa
rent
co
mpany’s abi
lit
y t
o co
ntinue a
s a going c
once
rn, di
sclo
sing a
s
applicable, matters relat
ed t
o goi
ng concern and
using the
goi
ng conc
ern b
asis o
f acco
unting un
les
s the dire
ctors e
ither
inten
d to liquid
ate the Gr
oup or the P
arent c
ompa
ny or to cea
se
ope
ratio
ns, or h
a
ve no re
alis
tic alte
rnative b
ut to do so.
9. Auditor
’
s responsibilit
ies for the audit of th
e
ﬁnancial statements
Our o
bjec
tives a
re to obta
in rea
sona
ble as
sura
nce ab
out
whe
ther the ﬁ
nanc
ial st
atement
s as a who
le are f
ree fro
m
mater
ial mi
sst
atement
, wheth
er due to fr
aud or er
ror, and to
issue an audit
or’
s report that
includes our
opinion.
Reasonable
as
sura
nce is a h
igh level o
f ass
uranc
e but is n
ot a guar
antee
that a
n audit c
onduc
ted in ac
cord
ance w
ith IS
As (UK
) wi
ll
alw
a
ys dete
ct a mater
ial mi
ssta
tement w
hen it ex
ists
.
Misstatements can arise
from fraud o
r error and
are considered
mater
ial if, i
ndivi
duall
y or in the a
ggreg
ate, they c
ould re
ason
ably
be ex
pecte
d to inﬂue
nce the e
cono
mic de
cisio
ns of use
rs ta
ken
on th
e basi
s of thes
e ﬁnan
cial s
tateme
nts.
A fur
the
r desc
ripti
on of our r
espo
nsibi
litie
s for the au
dit of
the ﬁ
nanci
al sta
tements i
s loc
ated on the F
RC’s webs
ite at:
w
ww
.frc.org.uk/audit
orsresponsibilities. This description
forms
par
t of o
ur audito
r’s repor
t.
16
6
GS
K Ann
ual R
epor
t 2021
1
0. E
xtent to whi
ch the audit was considered
cap
able of detec
ting irregul
arities
, including
fraud
Irregularities, including fraud, are
instances of n
on-compliance
wit
h laws and r
egulat
ions
. W
e desi
gn pro
cedur
es in li
ne with
our responsib
ilities, outl
ined abo
ve,
to
det
ect mat
erial
misstatemen
ts in
respect of
irregularities, inclu
ding frau
d. The
ex
tent to whi
ch our pr
oced
ures a
re cap
able o
f detecti
ng
irregularities, including
fraud is de
tailed below
.
Identifying and assessing potential risks related to
irregularities
In i
denti
fyi
ng and a
sse
ssin
g the ris
ks of mater
ial mi
sst
atement in
respect of irregularities, includi
ng fraud and
non-compliance
with la
ws and
regulations, w
e considered
the f
ollowing
:
–
the na
ture of the i
ndust
ry a
nd sec
tor
, contr
ol envir
onmen
t and
business per
formance including the design of
the Group
’
s
remuneration
policies, ke
y drivers f
or direct
ors’ rem
uneration,
bon
us levels a
nd per
for
manc
e targ
ets;
–
re
sults of o
ur enqui
rie
s of the sen
ior le
ader
ship tea
m, inter
nal
aud
it and th
e Audit & R
isk C
ommit
tee, i
ncludi
ng obta
ining
and revie
wing supporting documen
tation, concerning
the
Group’
s
policies and
procedures relatin
g t
o
:
–
ide
ntif
ying
, evaluat
ing and c
ompl
ying wi
th laws and
reg
ulatio
ns and wh
ether th
ey were awar
e of any ins
tanc
es
of non-compliance;
–
dete
cting a
nd res
pondin
g to the ris
ks of fr
aud and w
hethe
r
they h
a
ve kn
owled
ge of any ac
tual, s
uspe
cted or a
llege
d
fraud;
and
–
the int
ernal cont
rols established t
o mitiga
te
risks relat
ed t
o
fraud or non
-compliance with la
ws and
regulation
s;
and
–
the m
atter
s discu
sse
d among t
he enga
gemen
t t
ea
m inclu
ding
sig
niﬁc
ant c
ompon
ent audi
t teams a
nd involv
ing rel
evant
internal
specialists, including
tax
,
valuatio
ns, pensions, IT and
industry specialists regarding ho
w and
where fraud mig
ht
oc
cur in the ﬁ
nanc
ial st
atement
s and any po
tential i
ndic
ators
of fraud.
We obtai
ned an u
nder
stan
ding of the l
egal a
nd regu
lator
y
frameworks tha
t the
Group operates in,
focusing on
provisions
of tho
se laws a
nd regu
lation
s that had a di
rect e
ffe
ct on the
determina
tion of
mat
erial amounts
and d
isclosures in the
ﬁna
ncia
l statem
ents
. The key laws a
nd regu
lation
s we
considered in t
his cont
ext included the
provisions
of t
he UK
Companies Act, pensions legisla
tion and
tax legislation. W
e
have al
so cons
ider
ed key laws an
d regul
ations t
hat had a
fun
damen
tal ef
fec
t on the op
erati
ons of the G
roup, i
ncludi
ng
the G
ood Cl
inica
l Pra
ctic
e, the FDA re
gulati
ons, G
ener
al Dat
a
Protection
requirements, Anti-bribery and corruption
policy and
the F
oreig
n Cor
rupt P
racti
ces Ac
t.
Independent Auditor’s report
co
ntinued
Report on the audit of the ﬁnancial st
atements
continued
Audit response to risks identiﬁed
As a r
esult o
f per
form
ing the ab
ove, we ide
ntiﬁ
ed the Valuati
on
of US R
eturns a
nd Rebate
s accr
uals a
s a key audi
t matte
r
rel
ated to the po
t
enti
al ris
k of fra
ud. Th
e key audit m
atter
s
se
ction of o
ur rep
ort e
xplai
ns the mat
ter in mo
re det
ail and a
lso
de
scrib
es the s
peci
ﬁc pro
cedu
res in r
espo
nse to that key a
udit
mat
ter
. In co
mmon w
ith all a
udits un
der I
SAs (UK
), we ar
e also
req
uired to p
er
form sp
eci
ﬁc pro
cedur
es to res
pond to th
e risk
of managemen
t ov
erride.
In a
dditio
n to the above
, our pro
cedu
res to re
spon
d t
o ris
ks
ide
ntiﬁ
ed incl
uded th
e follow
ing:
–
revi
ewing th
e ﬁnan
cial s
tateme
nt discl
osur
es and te
sting to
suppor
t
ing documentation
to
asses
s
compliance with
provisions
of rele
vant
laws
and regula
tions described as
havi
ng a direc
t ef
fect on t
he ﬁna
ncial s
tateme
nts;
–
enq
uirin
g of the sen
ior le
ader
ship tea
m, the Au
dit & Ri
sk
Commit
t
ee and in-house and e
xternal legal counsel
concerning actual
and pot
ential l
itigation
and claims
;
–
per
fo
rming a
naly
tic
al pro
cedu
res to ide
ntif
y any unu
sual or
unexpected
relationships
that
may
indicat
e risks of
mat
erial
mis
state
ment due to f
raud;
–
re
ading mi
nutes of m
eeting
s of thos
e charg
ed wit
h
gover
nanc
e, revi
ewing in
ternal a
udit re
por
ts and
correspondence with regulat
ors;
and
–
in ad
dres
sing th
e risk o
f fraud t
hrough m
anage
ment over
ride
of co
ntrol
s, test
ing the ap
prop
riatene
ss of j
ourna
l entri
es and
other adjustment
s;
asses
sing
whether the
judgements made
in ma
king a
ccou
nting e
stimate
s are ind
icati
ve of a potent
ial
bia
s; and eval
uating th
e busin
ess r
ationa
le of any si
gniﬁ
cant
tra
nsac
tions th
at are un
usual o
r outsi
de the no
rmal c
ours
e of
business
.
W
e also commu
nicated
relevan
t identiﬁed la
ws and
regulat
ions
and p
otentia
l frau
d risk
s t
o all e
ngage
ment tea
m memb
ers an
d
sig
niﬁc
ant c
ompon
ent audi
t teams a
nd rem
ained a
ler
t to any
indi
cati
ons of fr
aud or no
n-co
mplia
nce wi
th laws and
regulations
througho
ut the
audit.
Report on other legal and regulatory requir
ements
1
1. Opinions on othe
r mat
ters prescribed by
the C
ompanies Ac
t 200
6
In o
ur opini
on, the p
ar
t of the Di
recto
rs’ Remu
nerati
on rep
or
t t
o
be au
dited ha
s bee
n prope
rly pr
epar
ed in acc
ord
ance w
ith the
Co
mpan
ies Ac
t 2006
.
In o
ur opini
on, ba
sed on t
he work un
der
take
n in the co
urse o
f
th
e au
di
t:
–
the in
forma
tion give
n in the st
rategi
c repor
t an
d the dire
ctor
s
’
rep
or
t for the ﬁ
nanci
al year fo
r whic
h the ﬁna
ncia
l statem
ents
are prepared is
consistent
with the
ﬁnancial stat
ements
; and
–
the s
trategi
c repo
rt an
d the dir
ector
s’ repor
t have be
en
prepared in
accordance with
applicable legal
requiremen
ts.
GS
K Ann
ual R
epor
t 2021
167
Strategic report
Governance and remuneration
Financial statements
Investor information
Report on the audit of the ﬁnancial st
atements
continued
In th
e light of t
he know
ledg
e and und
ers
tandi
ng of the G
roup
and o
f the Par
ent com
pany and t
heir env
ironm
ent obt
ained i
n
the c
ours
e of the aud
it, we have no
t identi
ﬁed a
ny materi
al
mis
state
ments in t
he stra
tegic re
por
t or the di
rector
s’ repo
rt
.
1
2
. Corporate gover
nance st
atement
Th
e Listi
ng Rule
s requi
re us to revi
ew the dir
ector
s’ statem
ent in
relation t
o g
oing concern, longer
-
term
viability and tha
t part of
the c
orpo
rate gover
nanc
e statem
ent rel
ating to the G
roup’s
co
mplia
nce wi
th the prov
isio
ns of the U
K Cor
porate
Gove
rnanc
e Co
de spe
ciﬁe
d for our r
eview.
Ba
sed on t
he work un
der
taken a
s par
t of ou
r audit
, we have
co
nclud
ed that ea
ch of the fo
llowin
g eleme
nts of the C
orp
orate
Gove
rnanc
e Statem
ent is ma
t
eri
ally c
onsis
tent wi
th the ﬁna
ncia
l
st
atements a
nd our k
nowle
dge obt
aine
d durin
g the audi
t
:
–
the di
rectors
’ stat
ement
with regards
to
the
appropriat
eness
of ad
opting th
e going c
once
rn ba
sis of ac
count
ing and a
ny
mater
ial un
cer
tai
nties i
denti
ﬁed se
t out on pa
ge 1
5
4
;
–
the di
recto
rs’ expl
anatio
n as to its a
sse
ssm
ent of the G
roup’s
pro
spec
ts, th
e peri
od this a
sse
ssm
ent cover
s and w
hy the
period is appropriat
e is
set ou
t on pa
ge 53
;
–
the d
irecto
rs’ sta
tem
ent on
fair
, balanced and
understandable
An
nual Re
por
t set out o
n page 1
1
5
;
–
the b
oard’s co
nﬁrm
ation th
at it has c
arr
ied ou
t a robus
t
as
ses
smen
t of the eme
rging a
nd pri
ncipa
l risk
s set out o
n
pag
es 46 to 48;
–
the s
ectio
n of the A
nnual Re
por
t that de
scr
ibes th
e review o
f
ef
fect
ivene
ss of ri
sk man
ageme
nt and inte
rnal c
ontro
l
syste
ms set ou
t on page
s 1
1
1 to 1
1
2
; and
–
the s
ectio
n desc
ribi
ng the wor
k of the aud
it and ri
sk
co
mmit
tee set ou
t on page
s 1
1
1 to 1
1
5.
1
3
. Mat
ters on whi
ch w
e are require
d to repor
t b
y
exception
Adequacy of explanations received and accounting r
ecor
ds
Und
er the C
ompa
nies Ac
t 2006 we a
re req
uired to r
epor
t to
you if
, in our
opinion
:
–
we have not r
ecei
ved all th
e infor
mation a
nd expl
anatio
ns we
req
uire for o
ur audi
t
; or
–
ade
quate ac
counti
ng rec
ords have n
ot been ke
pt by the
Par
ent com
pany, or retur
ns ade
quate for ou
r audit h
a
ve not
be
en rec
eived f
rom bra
nche
s not vis
ited by us; or
–
the Paren
t compan
y ﬁnancial
stat
ements
are not
in a
greement
wit
h the acc
ounti
ng reco
rds an
d return
s.
W
e have nothing to r
eport in respect of these matters.
Directors’
r
emuneration
Und
er the C
ompa
nies Ac
t 2006 we a
re als
o requi
red to rep
or
t
if in ou
r opinion
cert
ain
disclosures of
directors
’ remunera
tion
have not b
een mad
e or the pa
rt o
f the dire
ctor
s
’ rem
unera
tion
rep
or
t to be audi
ted is not in a
gree
ment wi
th the ac
counti
ng
records and ret
urns.
W
e have nothing to r
eport in respect of these matters.
1
4
. Ot
her mat
ters which we are require
d to
address
Auditor tenure
Fol
lowing t
he rec
ommen
dation o
f the Audi
t & Ris
k Comm
itte
e,
wit
h eff
ect fr
om 1 Janu
ar
y 20
1
8 we we
re appo
inted by the
Bo
ard of Di
recto
rs to audi
t the ﬁna
ncia
l statem
ents for t
he year
ended 3
1 December 20
1
8
and su
bsequent
ﬁnancial
periods.
Th
e perio
d of total u
ninter
rupted e
ngage
ment of th
e ﬁrm is fo
ur
yea
rs.
Consistency of the audit report with the additional report to
the Audit & Risk Committee
Our a
udit op
inion i
s cons
istent w
ith the ad
ditio
nal rep
or
t to the
Audi
t & Ris
k Comm
itte
e we are re
quired to p
rovid
e in
acc
ord
ance w
ith ISA
s (UK
).
1
5
. Use of our repor
t
This report is made solely
to
the P
arent company’
s members
,
as a b
ody, in acc
orda
nce wi
th Chap
ter 3 of Par
t 1
6 of the
Co
mpan
ies Ac
t 2006
. Our aud
it work ha
s bee
n under
ta
ken so
that we m
ight st
ate to the Par
ent com
pany’s mem
bers t
hose
mat
ters we a
re requ
ired to st
ate to them in a
n audito
r’s repor
t
and fo
r no othe
r purpo
se. T
o the full
est ex
tent pe
rmit
ted by law,
we do not a
cce
pt or as
sume re
spon
sibil
ity to anyo
ne other t
han
the Pa
rent c
ompa
n
y and t
he Pare
nt comp
any’s memb
ers a
s a
bod
y
, for our a
udit wor
k, for t
his rep
or
t, or for t
he opini
ons we
hav
e formed.
In d
ue cour
se, a
s requi
red by the F
inan
cial C
ondu
ct Auth
orit
y
(FCA)
Disclosure Guidance
and T
ransparency
Rule (
DTR
)
4.
1
.
1
4R
, the
se ﬁna
ncial s
tateme
nts wil
l form pa
rt of t
he
European Single
Electronic Format
(ESEF)-prepared Annual
Fi
nanci
al Repo
rt ﬁ
led on th
e Natio
nal Stor
age Me
chan
ism of the
UK F
CA in ac
cord
ance w
ith the E
SEF Re
gulator
y T
echni
cal
Sta
ndar
d (ESEF R
TS). This a
uditor
’
s repo
rt p
rovide
s no
as
sura
nce over w
hethe
r the annu
al ﬁna
ncia
l repor
t ha
s bee
n
pre
pare
d using t
he singl
e elec
troni
c format s
peci
ﬁed i
n the
ESEF RTS.
Th
e Parent c
ompa
ny has pa
ss
ed a res
oluti
on in acc
orda
nce
wit
h sect
ion 506 o
f the Co
mpani
es Act 20
06 th
at the sen
ior
st
atutor
y audi
t
or’s na
me shou
ld not be s
tated.
Delo
itte LLP
Statut
ory Auditor
London, Unit
ed Kingdom
28 Feb
ruar
y 2022
Independent Auditor’s report
co
ntinued
168
GS
K Ann
ual R
epor
t 2021
C
on
solidated income s
tatement
for t
he y
ear ended 3
1 December 20
21
Notes
2021
£m
2020
£m
2019
£m
T
urnover
6
34,114
34,099
33,754
Cost of sales
(11,603)
(11,704)
(11,863)
Gross proﬁt
22,511
22,395
21,891
Selling, general and administration
(10,975)
(11,456)
(11,402)
Research and development
(5,278)
(5,098)
(4,568)
Royalty income
419
318
351
Other operating (expense)/income
7
(476)
1,624
689
Operating proﬁt
8
6,201
7,783
6,961
Finance income
11
28
44
98
Finance expense
12
(784)
(892)
(912)
Share of after tax proﬁts of associates and joint ventures
13
33
33
74
Loss on disposal of interest in associates
(36)
–
–
Proﬁt befor
e taxation
5,442
6,968
6,221
T
axation
14
(346)
(580)
(953)
Proﬁt after taxation for the year
5,096
6,388
5,268
Proﬁt attributable to non-controlling interests
711
639
623
Proﬁt attributable to shareholders
4,385
5,749
4,645
5,096
6,388
5,268
Basic earnings per share (pence)
15
87.6
p
115.5p
93.9p
Diluted earnings per share (pence)
15
86.6p
114.1p
92.6p
C
on
solidated st
atement of comprehensiv
e income
for t
he y
ear ended 3
1 December 20
21
Notes
2021
£m
2020
£m
2019
£m
Proﬁt for the year
5,096
6,388
5,268
Other comprehensive income/(expense) for the year
Items that may be subsequently reclassiﬁed to income statement:
Exchange movements on overseas net assets and net investment hedges
37
(239)
(59)
(832
)
Reclassiﬁcation of exchange movements on liquidation or disposal of overseas subsidiaries and associates
37
(25)
36
(75
)
Fair value movements on cash ﬂow hedges
5
(19)
(20
)
T
ax on fair value movements on cash ﬂow hedges
(8)
(18)
16
Reclassiﬁcation of cash ﬂow hedges to income statement
12
54
3
(255)
(6)
(908
)
Items that will not be reclassiﬁed to income statement:
Exchange movements on overseas net assets of non-controlling interests
37
(20)
(34)
(75
)
Fair value movements on equity investments
(911)
1,348
372
T
ax on fair value movements on equity investments
131
(220)
(95
)
Remeasurement gains/(losses) on deﬁned beneﬁt plans
941
(187)
(1,050
)
T
ax on remeasurement of deﬁned beneﬁt plans
(223)
69
189
(82)
976
(659
)
Other comprehensive (expense)/income for the year
37
(337)
970
(1,567
)
T
otal comprehensive income for the year
4,759
7,358
3,701
T
otal comprehensive income for the year attribut
able to:
Shareholders
4,068
6,753
3,153
Non-controlling interests
691
605
548
T
otal comprehensive income for the year
4,759
7,358
3,701
GS
K Ann
ual R
epor
t 2021
169
Strategic report
Governance and remuneration
Financial statements
Investor information
C
ons
olidated b
alance sheet
as at 3
1 December 20
21
Notes
2021
£m
2020
£m
Non-current assets
Property
, plant and equipment
17
9,932
10,176
Right of use assets
18
740
830
Goodwill
19
10,552
10,597
Other intangible assets
20
30,079
29,824
Investments in associates and joint ventures
21
88
364
Other investments
22
2,126
3,060
Deferred tax assets
14
5,218
4,287
Derivative ﬁnancial instruments
43
18
5
Other non-current assets
23
1,676
1,041
T
otal non-current assets
60,429
60,184
Current assets
Inventories
24
5,783
5,996
Current tax recoverable
14
486
671
T
rade and other receivables
25
7,860
6,952
Derivative ﬁnancial instruments
43
188
152
Liquid investments
29
61
78
Cash and cash equivalents
26
4,274
6,292
Assets held for sale
27
22
106
T
otal current assets
18,674
20,247
T
otal assets
79,103
80,431
Current liabilities
Short-term borrowings
29
(3,601)
(3,725)
Contingent consideration liabilities
32
(958)
(765)
T
rade and other payables
28
(17,554)
(15,840)
Derivative ﬁnancial instruments
43
(227)
(221)
Current tax payable
14
(489)
(545)
Short-term provisions
31
(841)
(1,052)
T
otal current liabilities
(23,670)
(22,148)
Non-current liabilities
Long-term borrowings
29
(20,572)
(23,425)
Corporation tax payable
14
(180)
(176)
Deferred tax liabilities
14
(3,556)
(3,600)
Pensions and other post-employment beneﬁts
30
(3,113)
(3,650)
Other provisions
31
(630)
(707)
Derivative ﬁnancial instruments
43
(1)
(10)
Contingent consideration liabilities
32
(5,118)
(5,104)
Other non-current liabilities
33
(921)
(803)
T
otal non-current liabilities
(34,091)
(37,475)
T
otal liabilities
(57,761)
(59,623)
Net assets
21,342
20,808
Equity
Share capital
36
1,347
1,346
Share premium account
36
3,301
3,281
Retained earnings
37
7,944
6,755
Other reserves
37
2,463
3,205
Shareholders’
equity
15,055
14,587
Non-controlling interests
6,287
6,221
T
otal equity
21,342
20,808
Th
e ﬁnanc
ial st
atement
s on page
s 1
6
8 to 25
1 were a
pprove
d by the Boa
rd on
28 February
2022 and s
igne
d on its be
half by
Sir Jonathan Symond
s
Chairman
170
GS
K Ann
ual R
epor
t 2021
Consol
idat
ed st
atem
ent of c
hanges i
n equity
for t
he y
ear ended 3
211 December 20
Shareholders’
equity
Share
capital
£m
Share
premium
£m
Retained
earnings
£m
Other
reserves*
£m
T
otal
£m
Non-controlling
interests
£m
T
otal
equity
£m
At 31 December 20
18, as revised
1,345
3,091
(2,716)
2,061
3,781
(109)
3,672
Implementation of I
FR
S 16
–
–
(93)
–
(93)
–
(93)
At 31 December 20
18, as adjusted
1,345
3,091
(2,809)
2,061
3,688
(109)
3,579
Proﬁt for the year
–
–
4,645
–
4,645
623
5,268
Other comprehensive (expense)/income for the year
–
–
(1,766)
274
(1,492)
(75)
(1,567)
T
otal comprehensive income for the year
–
–
2,879
274
3,153
548
3,701
Distributions to non-controlling interests
–
–
–
–
–
(364)
(364)
Changes in non-controlling interests
–
–
–
–
–
(10)
(10)
Dividends to shareholders
–
–
(3,953)
–
(3,953)
–
(3,953)
Recognition of interest in Consumer Healthcare JV
–
–
8,082
–
8,082
6,887
14,969
Realised losses on disposal of equity investments
–
–
(4)
4
–
–
–
Shares issued
1
50
–
–
51
–
51
Shares acquired by ES
OP T
rusts
–
33
295
(328)
–
–
–
W
rite-down of shares held by ESO
P T
rusts
–
–
(344)
344
–
–
–
Share-based incentive plans
–
–
365
–
365
–
365
T
ax on share-based incentive plans
–
–
19
–
19
–
19
At 31 December 20
19
1,346
3,174
4,530
2,355
11,405
6,952
18,357
Proﬁt for the year
–
–
5,749
–
5,749
639
6,388
Other comprehensive (expense)/income for the year
–
–
(133)
1,137
1,004
(34)
970
T
otal comprehensive income for the year
–
–
5,616
1,137
6,753
605
7,358
Distributions to non-controlling interests
–
–
–
–
–
(1,208)
(1,208)
Contributions from non-controlling interests
–
–
–
–
–
3
3
Changes in non-controlling interests
–
–
–
–
–
(131)
(131)
Dividends to shareholders
–
–
(3,977)
–
(3,977)
–
(3,977)
Shares issued
–
29
–
–
29
–
29
Realised proﬁts on disposal of equity investments
–
–
163
(163)
–
–
–
Share of associates and joint ventures realised proﬁts
on disposal of equity investments
–
–
44
(44)
–
–
–
Shares acquired by ES
OP T
rusts
–
78
531
(609)
–
–
–
W
rite-down of shares held by ESO
P T
rusts
–
–
(529)
529
–
–
–
Share-based incentive plans
–
–
381
–
381
–
381
T
ax on share-based incentive plans
–
–
(4)
–
(4)
–
(4)
At 31 December 2020
1,346
3,281
6,755
3,205
14,587
6,221
20,808
Proﬁt for the year
–
–
4,385
–
4,385
711
5,096
Other comprehensive (expense)/income for the year
–
–
454
(771)
(317)
(20)
(337)
T
otal comprehensive income for the year
–
–
4,839
(771)
4,068
691
4,759
Distributions to non-controlling interests
–
–
–
–
–
(642)
(642)
Contributions from non-controlling interests
–
–
–
–
–
7
7
Dividends to shareholders
–
–
(3,999)
–
(3,999)
–
(3,999)
Realised proﬁts on disposal of equity investments
–
–
132
(132)
–
–
–
Share of associates and joint ventures realised proﬁts
on disposal of equity investments
–
–
7
(7)
–
–
–
Shares issued
1
20
–
–
21
–
21
W
rite-down of shares held by ESO
P T
rusts
–
–
(168)
168
–
–
–
Share-based incentive plans
–
–
367
–
367
–
367
T
rans
actions with non-controlling interests
–
–
–
–
–
10
10
T
ax on share-based incentive plans
–
–
11
–
11
–
11
At 31 December 2021
1,347
3,301
7,944
2,463
15,055
6,287
21,342
* an analysis of Other reserves is presented as part of Note 3
7
, ‘Movements in equity’.
GS
K Ann
ual R
epor
t 2021
171
Strategic report
Governance and remuneration
Financial statements
Investor information
C
on
solidated cash ﬂ
o
w
st
atement
for t
he y
ear ended 3
1 December 20
21
Notes
2021
£m
2020
£m
2019
£m
Cash ﬂow from operating activities
Proﬁt after tax
ation for the year
5,096
6,388
5,268
Adjustments reconciling proﬁt after tax to operating cash ﬂows
41
4,147
3,708
4,264
Cash generated from operations
9,243
10,096
9,532
T
axation paid
(1,291)
(1,655)
(1,512)
Net cash inﬂow from operating activities
7,952
8,441
8,020
Cash ﬂow from investing activities
Purchase of property
, plant and equipment
(1,172)
(1,226)
(1,265)
Proceeds from sale of property, plant and equipment
143
68
95
Purchase of intangible assets
(1,759)
(1,013)
(898
)
Proceeds from sale of int
angible assets
772
1,255
404
Purchase of equity investments
(162)
(411)
(258)
Proceeds from sale of equity investments
202
3,269
69
Contingent consideration paid
(114)
(120)
(113)
Purchase of businesses, net of cash acquired
40
–
15
(3,571)
Disposal of businesses, net of cash disposed
40
(17)
259
104
Investments in associates and joint ventures
40
(1)
(4)
(11)
(Increase)/decrease in liquid investments
18
(1)
1
Interest received
27
39
82
Proceeds from disposal of associates and joint ventures
277
–
–
Dividends from associates, joint ventures and equity investments
9
31
7
Net cash inﬂow/(outﬂow)
from investing activities
(1,777)
2,161
(5,354
)
Cash ﬂow from ﬁnancing activities
Issue of share capital
36
21
29
51
Purchase of non-controlling interests
–
–
(7)
Increase in long-term loans
–
3,298
4,794
Repayment of short-term Notes
(2,313)
(3,738)
(4,160)
(Repayment of)/increase in other short-term loans
318
(3,567)
3,095
Repayment of lease liabilities
(215)
(227)
(214
)
Interest paid
(786)
(864)
(895)
Dividends paid to shareholders
(3,999)
(3,977)
(3,953)
Distributions to non-controlling interests
(642)
(1,208)
(364)
Contributions from non-controlling interests
7
3
–
Other ﬁnancing cash ﬂows
20
119
(187)
Net cash outﬂow from ﬁnancing activities
(7,589)
(10,132)
(1,840)
(Decrease)/incr
ease in cash and bank overdrafts
42
(1,414)
470
826
Cash and bank overdrafts at beginning of year
5,262
4,831
4,087
Exchange adjustments
(29)
(39)
(82)
(Decrease)/increase in cash and bank overdrafts
(1,414)
470
826
Cash and bank overdrafts at end of year
3,819
5,262
4,831
Cash and bank overdrafts at end of year comprise:
Cash and cash equivalents
4,274
6,292
4,707
Cash and cash equivalents reported in assets held for sale
–
–
507
4,274
6,292
5,214
Overdrafts
(455)
(1,030)
(383)
3,819
5,262
4,831
17
2
GS
K Ann
ual R
epor
t 2021
Notes
to th
e ﬁnan
cial s
t
atement
s
1
. Presenta
tion of the ﬁ
nancial st
atement
s
Des
cription of business
GS
K is a maj
or glob
al hea
lthc
are gro
up whic
h is eng
aged
in th
e creati
on and di
scover
y, develo
pment
, manuf
actur
e and
marketing
of pharmaceutical products, vaccines, over
-
the-
counter
(
O
TC
)
medicines and
health-relat
ed consumer
products. GSK
’
s
principal pharmaceutical products include
medicines in the
following
therapeutic areas: respirat
ory,
HI
V
, immuno
-inﬂ
ammat
ion, o
ncolo
gy as we
ll as met
abol
ic,
anti-bacterials
and dermat
ology
.
Compliance with applicable law a
nd IFRS
Th
e ﬁnanc
ial st
atement
s have been p
repa
red in ac
cor
danc
e
wit
h intern
ationa
l acco
unting s
tand
ards i
n confor
mit
y with th
e
req
uirem
ents of th
e Com
panie
s Act 20
06 and th
e Inter
nation
al
Fi
nanci
al Repo
rt
ing Sta
ndard
s as is
sued by th
e IAS
B.
Composition of ﬁnancial st
atements
Th
e conso
lidate
d ﬁnanc
ial st
atement
s are dr
awn up in Ste
rling
,
the f
uncti
onal cu
rrenc
y of Gla
xoS
mith
Klin
e plc, a
nd in
acc
ord
ance w
ith IF
RS acc
ounti
ng pre
sentat
ion. T
he ﬁna
ncial
statement
s comprise
:
–
Consolidated
income
statemen
t
–
Consolidated sta
tement
of comprehensiv
e income
–
Consolidat
ed balan
ce sheet
–
Co
nsoli
dated st
atemen
t of chan
ges in e
quit
y
–
Consolidated
cash ﬂow
statemen
t
–
Note
s to the ﬁna
ncia
l statem
ents.
Composition of the Group
A lis
t of the sub
sidi
arie
s and as
soc
iates wh
ich, i
n the opin
ion
of the D
irec
tors
, prin
cipal
ly af
fected t
he amou
nt of proﬁ
t or net
as
sets of t
he Gro
up is give
n in Note 45
, ‘Pr
incip
al Gro
up
companies’
.
Financial
period
Th
ese ﬁn
ancia
l state
ments c
over the ﬁn
ancia
l year fr
om
1 Jan
uar
y to 3
1 Dec
embe
r 202
1
, wi
th com
parat
ive ﬁgur
es for
the ﬁ
nanci
al year
s fro
m 1 Janua
ry to 31 Dec
embe
r 2020 and,
whe
re app
ropri
ate, fro
m 1 Janua
ry to 31 Dec
embe
r 20
1
9.
Accounting principles and policies
Th
e ﬁnanc
ial st
atement
s have been p
repa
red us
ing the
his
toric
al cos
t conven
tion mo
diﬁe
d by the reva
luatio
n of cer
tai
n
item
s, as s
tated in t
he acc
ounting p
olic
ies
, and on a go
ing
concern basis.
Th
e ﬁnanc
ial st
atement
s have been p
repa
red in ac
cor
danc
e
wit
h the Gro
up’
s acc
ountin
g polic
ies ap
proved by th
e Boar
d
and described in Note 2, ‘
Accounting principles and policies’
.
Information o
n the
application o
f these account
ing policies,
inc
luding a
rea
s of est
imatio
n and jud
gemen
t is given i
n Note 3,
‘Cr
itic
al acc
ounti
ng judge
ments a
nd key sour
ces of e
stim
ation
uncer
tainty’
.
Th
e prepa
ratio
n of the ﬁn
ancia
l statem
ents in c
onfor
mit
y with
generally accepted
accounting
principles requires
management
to make e
stima
t
es a
nd ass
umpti
ons that af
fec
t the re
por
ted
amo
unts of a
sset
s and lia
biliti
es and d
iscl
osure o
f contin
gent
as
sets a
nd liab
ilitie
s at the date o
f the ﬁna
ncial s
tateme
nts and
the r
epor
ted am
ounts of r
evenues a
nd expe
nses d
uring t
he
reporting period. Actual results
could differ from
those estimat
es.
Parent company ﬁnancial s
tatement
s
The ﬁnancial
statemen
ts of
the
parent compan
y
,
Gl
axo
Smith
Kli
ne plc
, have been p
repa
red in ac
cord
ance w
ith
UK G
A
AP an
d with U
K acc
ounting p
res
entati
on. Th
e comp
any
bal
ance s
heet i
s pres
ented on p
age 252 and the a
ccou
nting
pol
icie
s are give
n on pag
es 253 to 256.
Consolidation
The consolida
ted
ﬁnancial stat
ements
include
:
–
the a
sset
s and lia
bilit
ies
, and the r
esult
s and ca
sh ﬂows
, of
the compan
y and
its s
ubsidiaries, includin
g ESOP T
rusts
–
the G
roup’s shar
e of the re
sults a
nd net as
sets o
f ass
ociate
s
and joint v
entures
–
the G
roup’s shar
e of ass
ets, l
iabil
ities
, revenu
e and exp
ense
s
of joint operations.
The ﬁnancial
statemen
ts of
entit
ies consolida
ted
are made
up
to 3
1 Dec
embe
r each ye
ar
.
Enti
ties ove
r which t
he Gro
up has th
e power to dir
ect the
rel
evant act
iviti
es so a
s to affe
ct the r
eturns to th
e Grou
p,
gen
eral
ly throu
gh cont
rol over th
e ﬁnanc
ial an
d oper
ating
policies, are accoun
ted
for as
subsidiaries.
Wh
ere the G
roup ha
s the ab
ilit
y to exerci
se joint c
ontro
l over
,
and r
ights to, t
he net as
sets o
f entiti
es, th
e entiti
es are
acc
ounted f
or as jo
int ventur
es. W
here th
e Grou
p has the a
bilit
y
to exerc
ise jo
int con
trol over a
n arra
ngeme
nt, but h
as ri
ghts to
spe
ciﬁ
ed as
sets a
nd oblig
ations f
or spe
ciﬁe
d liab
ilitie
s of the
ar
range
ment
, the arr
ange
ment is a
ccou
nted for a
s a joint
operation. Where t
he Group
has the abil
ity to
exercise
sig
niﬁc
ant in
ﬂuen
ce over ent
ities
, they ar
e acco
unted for a
s
as
soci
ates. T
he re
sults a
nd as
sets an
d liabil
itie
s of ass
ociate
s
and j
oint ventu
res ar
e inco
rpor
ated into the c
onso
lidated
ﬁna
ncia
l statem
ents us
ing the eq
uit
y method o
f acco
unting
.
Th
e Group’s righ
ts to ass
ets, l
iabil
itie
s, revenu
e and exp
ense
s
of jo
int oper
ation
s are inc
lude
d in the co
nsoli
dated ﬁn
ancia
l
st
atements i
n acc
ordan
ce wit
h those r
ights a
nd obli
gation
s.
Inte
rest
s acqui
red in e
ntitie
s are co
nsoli
dated fr
om the date th
e
Gr
oup acq
uires c
ontro
l and inter
ests s
old ar
e de-c
onso
lidated
fro
m the date c
ontrol c
eas
es.
2
. Accounting princi
ples and policies
GS
K Ann
ual R
epor
t 2021
17
3
Strategic report
Governance and remuneration
Financial statements
Investor information
Notes to t
he ﬁnancial s
tateme
nts
conti
nued
T
ransactions and balan
ces between subsidiaries
are eli
minat
ed
and n
o proﬁ
t befor
e ta
x is take
n on sal
es bet
ween s
ubsid
iari
es
until t
he products are
sold to
customers outside
the Group.
Th
e relevan
t propo
rti
on of pr
oﬁts on t
rans
actio
ns with j
oint
ventu
res
, joint op
erati
ons and a
sso
ciates i
s also d
eferr
ed until
the p
roduc
ts are s
old to thir
d par
ties
. T
r
ans
actio
ns with no
n-
controlling
int
erests are recorded di
rectly in equ
ity.
Deferred
ta
x rel
ief on un
reali
sed in
tra-
Group p
roﬁt i
s acco
unted for o
nly
to
the extent
that
it is
considered recoverable.
Business c
ombinations
Bu
sines
s com
binati
ons are a
ccou
nted for us
ing the ac
quis
ition
acco
unting method. Ide
ntiﬁable a
ssets, lia
bilities and conti
ngent
lia
biliti
es ac
quired a
re me
asure
d at fair va
lue at ac
quisi
tion date
.
The consideration
transferred is measured a
t fair
value
and
includes the
fair v
alue of
any
contingent
consideration.
The fair
value
of cont
ingent
consideration
liabil
ities are
reassessed at each
balance shee
t da
te
with c
hanges
rec
ogni
sed in th
e inco
me state
ment. P
a
yme
nts of co
ntinge
nt
co
nside
ratio
n reduc
e the ba
lanc
e sheet li
abili
ty an
d as a re
sult
are n
ot rec
orded i
n the inc
ome st
atement
.
Th
e par
t of eac
h paymen
t relati
ng to the ori
ginal e
stim
ate of the
fair valu
e of
the contin
gent considerat
ion on a
cquisition is
rep
or
ted with
in invest
ing act
iviti
es in the c
ash ﬂ
ow state
ment an
d
the p
ar
t of each p
ayment r
elatin
g to the incr
eas
e in the lia
bilit
y
sin
ce the ac
quisi
tion d
ate is repo
rte
d withi
n oper
ating ca
sh ﬂow
s.
Where the considera
tion transferred, t
ogether
with t
he non-
co
ntrolli
ng intere
st, exc
eed
s the fai
r value of th
e net as
sets
,
liabilities
and cont
ingent
liabilit
ies acquired,
the e
xcess is
rec
orde
d as go
odwil
l. The c
osts o
f eff
ectin
g an acqu
isiti
on
are c
harg
ed to the inc
ome st
atemen
t in the pe
riod in w
hich
they a
re incu
rred
.
Go
odwi
ll is ca
pita
lised a
s a sepa
rate item i
n the ca
se of
sub
sidi
arie
s and as p
ar
t of the co
st of inve
stment i
n the ca
se
of jo
int ventur
es and a
sso
ciates
. Goo
dwil
l is deno
minated i
n
the c
urren
cy of the op
erati
on acq
uired
.
Wh
ere the c
ost of ac
quis
ition i
s below th
e fair val
ue of the ne
t
assets acquired, the
difference is recognised directly
in the
income statement.
Wh
ere not al
l of the eq
uity o
f a subsi
diar
y is ac
quire
d the
non
-cont
rollin
g intere
st is re
cogni
sed ei
ther at fa
ir valu
e or at the
non
-cont
rollin
g intere
st’s sha
re of the n
et ass
ets of the s
ubsi
diar
y
,
on a c
ase
-by-c
ase b
asis
. Cha
nges in t
he Grou
p
’s owner
ship
percentage of
subsidiaries are
account
ed f
or withi
n equity
.
Foreign currency translation
Foreign currency
transactions are
booked i
n the
functional
cur
rency o
f the Gro
up com
pany at the exc
hang
e rate ruli
ng
on th
e date of tra
nsac
tion. F
orei
gn curr
ency mo
netar
y a
sset
s
and l
iabil
ities a
re retr
ansl
ated into the f
uncti
onal cu
rren
cy at
rate
s of excha
nge ruli
ng at the ba
lanc
e shee
t date. E
xchan
ge
dif
fer
ence
s are in
clude
d in the in
come s
tateme
nt.
On consolidation,
assets and liabil
ities, including
related
goodwill, of
ov
erseas subsidiaries, associates
and join
t
ventu
res
, are tra
nslate
d into Sterli
ng at rate
s of exchan
ge
rul
ing at the b
alanc
e shee
t date. Th
e resu
lts and c
ash ﬂ
ows
of over
sea
s subs
idiar
ies
, ass
ocia
t
es a
nd joint ve
nture
s are
tra
nslate
d into Sterli
ng usin
g average r
ates of exc
hange
.
E
xchan
ge adju
stmen
ts aris
ing wh
en the op
ening ne
t ass
ets
and t
he proﬁ
ts for the ye
ar ret
aine
d by overse
as su
bsidi
arie
s,
as
soci
ates and j
oint vent
ures a
re tran
slated i
nto Sterlin
g, les
s
exchange
differences arising on relat
ed f
oreign currency
bor
rowin
gs whic
h hedg
e the Gro
up’
s net inve
stment i
n thes
e
ope
ratio
ns, ar
e taken to a s
epar
ate comp
onent of e
quit
y withi
n
Retained Earnings
.
Wh
en tran
slatin
g into Sterl
ing the a
sset
s, lia
biliti
es, r
esul
ts
and c
ash ﬂ
ows of over
sea
s subs
idiar
ies
, ass
ociate
s and joi
nt
ventu
res which are
reported in currencies of
hyper
-inﬂat
ionary
economies, adjustments are
made where
mat
erial to
reﬂect
cur
rent pr
ice leve
ls. A
ny loss o
n net mon
etar
y as
sets i
s char
ged
to the c
onsol
idated in
come s
tateme
nt.
Reve
nue
T
urnover
Th
e Group r
ecei
ves reven
ue for sup
ply of go
ods to ex
tern
al
cus
tomer
s again
st ord
ers re
ceive
d. Th
e major
ity o
f contr
acts
that G
SK ente
rs into re
late to sal
es ord
ers c
ontai
ning si
ngle
per
f
ormance obligation
s for
the del
ivery of pharmaceutical,
vaccine and
consumer healthcare prod
ucts. The av
erage
dur
ation of a s
ale
s order i
s les
s than 1
2 months
.
Pr
oduct r
evenue is r
ecog
nise
d when c
ontrol o
f the goo
ds is
pa
sse
d t
o the cu
stome
r
. T
he poi
nt at whic
h contr
ol pas
ses i
s
determined
by
each customer
arrangement, but
generally occurs
on deliv
er
y
to
the c
ustomer
.
Pr
oduct r
evenue re
pres
ents ne
t invoice va
lue inc
ludin
g ﬁxed an
d
variable consideration.
V
ariable considera
tion arises on
the sale o
f
goo
ds as a r
esult o
f disc
ounts an
d allowan
ces gi
ven and a
ccru
als
for e
stimate
d futur
e return
s and reb
ates. R
evenue is n
ot
rec
ogni
sed in fu
ll until i
t is high
ly prob
able th
at a signi
ﬁc
ant rever
sal
in th
e amount o
f cumula
tive revenu
e reco
gnis
ed will n
ot occu
r
.
The methodology and
assumptions used to
estimate
rebates
and r
eturns a
re moni
tored a
nd adju
sted reg
ular
ly in the li
ght of
contractual and
legal obliga
tions, hist
orical trends, past experience
and project
ed market
conditions. Estimat
es associated
with
retu
rns and r
ebates a
re revi
sited at e
ach re
por
ting date o
r when
they a
re res
olved a
nd revenu
e is adju
sted acc
ordi
ngly. Ple
ase re
fer
to Note 3 fo
r the det
ails on r
ebates
, disc
ounts a
nd allowa
nce
s.
Th
e Group h
as ente
red into c
ollab
orati
ve agree
ments
, ty
pica
lly
with other
pharmaceuticals or biotechnology companies t
o
devel
op, prod
uce an
d market d
rug c
andid
ates and va
ccine
s that
do not q
uali
fy a
s joint a
rran
gemen
ts. Wh
en GS
K has c
ontrol ove
r
the commercialisation
activities, the
Group recognises tu
rnover
and c
ost of s
ale
s on a gros
s bas
is. P
roﬁt s
hari
ng amou
nts and
royal
ties d
ue to the cou
nterpa
rt
y are r
ecor
ded wi
thin co
st of sa
les
.
Co
st of s
ales i
nclud
es pro
ﬁt sha
ring co
sts of £
640 mil
lion (2020
– £
4 millio
n
; 20
1
9 – £
54 mi
llion). Whe
n the cou
nterpa
rt
y cont
rols
the commercialisation
activities and
records the
sale, the Group
is
not de
emed p
rinc
ipal in th
e custo
mer con
tract a
nd ins
t
ead r
ecor
ds
its s
hare of g
ross p
roﬁt a
s co-
promo
tion in
come
, on a net ba
sis
,
wit
hin turn
over
. The na
ture of co
-pro
motion a
ctivi
ties i
s such th
at
the G
roup re
cord
s no cos
ts of sa
les
. Phar
mace
utic
al turn
over
inc
lude
s co-p
romoti
on revenu
e of £7 millio
n (
2020 – £
1
2 mi
llion;
201
9 – £1
6 mi
llion). Reim
burs
ement
s t
o and f
rom the c
ounter
par
ty
in our
collaborations
for ‘
selling, gen
eral and admi
nistration
’ an
d
‘re
sear
ch and d
evelopm
ent’ c
osts a
re rec
orde
d net in the
re
spec
tive line
s in the C
onso
lidate
d incom
e statem
ent.
2. Accounting principles and policies
continued
174
GS
K Ann
ual R
epor
t 2021
Other operating income and royalty income
GS
K enter
s into develo
pment a
nd mar
keting c
ollab
orati
ons
and o
ut-lice
nces o
f the Gro
up’
s com
pound
s or prod
ucts to
othe
r par
tie
s. Th
ese co
ntrac
ts give ri
se to ﬁxe
d and var
iable
consideration from
upfront
payment
s, develo
pment milest
ones,
sales-based milest
ones and
ro
yalties.
In
come de
pend
ent on the a
chievem
ent of a deve
lopme
nt
milestone
is recognised when
it is h
ighly probable
that
a
sig
niﬁc
ant reve
rsa
l in the am
ount of cu
mulati
ve revenue
rec
ogni
sed wi
ll not oc
cur
, whic
h is usu
ally wh
en the re
lated even
t
oc
curs
. Sal
es-b
ased m
iles
tone inc
ome is re
cogn
ised w
hen it i
s
highly probable tha
t the
sales threshold will be reached.
Sa
les-
base
d royalti
es on a li
cenc
e of intell
ectu
al prop
er
ty ar
e
not re
cogn
ised u
ntil the re
levant p
roduc
t sale o
ccur
s.
For a
ll revenu
e, if the t
ime bet
ween t
he rec
ogniti
on of reve
nue
and p
ayment f
rom the c
ustome
r is expe
cted to be m
ore tha
n
one ye
ar and th
e impac
t is mater
ial, t
he amou
nt of con
sider
ation
is discount
ed using
appropriat
e discount
rates.
V
alu
e added t
ax a
nd othe
r sale
s ta
xes ar
e exclud
ed from r
evenue.
E
xpenditure
E
xpen
diture i
s rec
ognis
ed in re
spec
t of good
s and se
rv
ices
rec
eive
d when su
pplie
d in acc
orda
nce wi
th cont
ractu
al term
s.
Provision is
made when an
obligat
ion exists
for a
future
liability
in re
spec
t of a pa
st event an
d wher
e the amou
nt of the
obligation
can be reliably
estimated.
Manufacturing start-up
co
sts bet
ween va
lidat
ion and t
he achieve
ment of n
orma
l
production are
expensed as incu
rred.
Advertising and promo
tion e
xpenditure
is charged t
o t
he income
st
atement a
s incur
red
.
Shipment costs
on int
er
-company t
ransfers are charged t
o cost
of s
ales; dis
trib
ution c
osts on s
ale
s to custom
ers ar
e inclu
ded in
selling, general and administrative
expenditure.
Restructuri
ng costs
are recog
nised an
d pro
vided f
or
, where
app
ropr
iate, in re
spe
ct of the di
rect ex
pend
iture of a b
usine
ss
reorganisation where
the plans
are sufﬁciently detailed and
well
advanced, and where
appropriat
e communication
to
those
affected has
been un
dertaken.
Research and dev
elopment
Research and dev
elopment
expenditure
is charged
to
the
inc
ome st
atement i
n the per
iod in w
hich i
t is incur
red
.
Deve
lopme
nt expe
nditur
e is cap
ital
ised w
hen the c
riteri
a for
rec
ogni
sing an a
sse
t are met
, usua
lly whe
n a regul
ator
y ﬁling
has been made i
n a major
market
and appro
val is
considered
highly probable. Propert
y
,
plant and
equipment used f
or
research and dev
elopment is
capitalised and deprecia
ted
in ac
cord
ance w
ith the G
roup’s poli
cy
.
Environ
mental expenditu
re
Environmental
expenditure
relat
ed t
o exist
ing condition
s
resulting from
past or curren
t operations
and from
which no
current or
future
beneﬁt is discernible
is charged t
o th
e income
statemen
t. The Group
recognises it
s liabil
ity on a
site-b
y-site
ba
sis wh
en it ca
n be rel
iably e
stim
ated.
Thi
s liab
ilit
y inclu
des the G
roup’s por
tion o
f the tota
l cost
s and
also a po
rtion of ot
her pot
ential
ly responsible
parties’ costs
whe
n it is pr
obabl
e that they w
ill not b
e able to s
atisf
y thei
r
re
spec
tive sha
res of th
e clea
n-up ob
ligati
on. Re
coveri
es of
rei
mbur
semen
ts are re
cor
ded as a
sse
ts when v
ir
tually c
er
tai
n.
Leg
al and oth
er dispute
s
Pr
ovisio
n is mad
e for the ant
icipa
t
ed s
ettle
ment c
osts of l
egal o
r
othe
r dispu
tes aga
inst the G
roup w
here a
n out
ﬂow of re
sourc
es
is considered probable
and a
reliable estimat
e can be
made of
the lik
ely out
come. In respect o
f product l
iability claims relat
ed
to
cer
tain
products, provision
is made
when there
is sufﬁcient
his
tor
y of clai
ms made a
nd set
tleme
nts to ena
ble man
ageme
nt
to
make a
reliable estima
te
of the
provision
required t
o co
ver
unasser
ted
claims.
In c
er
tain c
ase
s, an i
ncurr
ed but n
ot repo
rted (
IBN
R) actu
aria
l
technique
is used t
o de
termine
this estima
te.
In addition,
provision is
made f
or legal or
other
expenses arising
from
cla
ims re
ceive
d or othe
r dispu
t
es
.
Th
e Group m
ay beco
me involve
d in leg
al proc
eedi
ngs, i
n
re
spec
t of whic
h it is not p
ossi
ble to me
aning
fully a
sse
ss
whether the
outcome will
result in a
probable outﬂow
, or t
o
qua
ntif
y or rel
iabl
y estim
ate the lia
bilit
y
. In th
ese c
ase
s,
appropriate
disclosure about
such cases woul
d be incl
uded
but no
provision w
ould
be made.
Co
sts a
ssoc
iated wi
th clai
ms made by t
he Gro
up agai
nst thir
d
par
ti
es are c
harge
d to the inc
ome st
atement a
s they ar
e incur
red.
Pensions
and o
ther post-emplo
yment beneﬁts
Th
e cost
s of provi
ding pe
nsion
s under d
eﬁne
d beneﬁ
t sche
mes
are c
alc
ulated us
ing the pr
ojec
ted unit c
redit m
ethod a
nd spre
ad
over th
e perio
d duri
ng whic
h bene
ﬁt is exp
ected to b
e deri
ved from
the e
mployee
s’ ser
vic
es, c
onsi
stent wi
th the ad
vice of q
uali
ﬁed
actuaries.
Pension obl
igations
are measured as the
present val
ue of
es
timated f
uture c
ash ﬂ
ows disc
ounted at r
ates re
ﬂecti
ng the
yields of
high-quality corporate
bonds. Pension scheme
assets are
me
asur
ed at fair va
lue at the b
alan
ce she
et date.
Th
e cost
s of other p
ost-emp
loyme
nt liab
ilitie
s are c
alcul
ated in
a sim
ilar way to de
ﬁned b
eneﬁ
t pensi
on sch
emes a
nd spr
ead
over th
e perio
d duri
ng whic
h bene
ﬁt is exp
ected to b
e deri
ved
fro
m the emp
loyees’ s
er
vice
s, in ac
cor
danc
e with the a
dvic
e of
qualiﬁed actuaries. The
servic
e
cost of
provid
ing ret
irement
ben
eﬁts to e
mployee
s duri
ng the yea
r
, togethe
r with th
e cost o
f
any cu
rt
ailme
nt, is ch
arge
d to oper
ating pro
ﬁt in th
e year.
Actu
aria
l gain
s and los
ses a
nd the ef
fec
t of chan
ges in a
ctuar
ial
assumptions are recognised
in the
statemen
t of
comprehensive
inc
ome in th
e year in w
hich th
ey aris
e.
The Group
’
s contribut
ions t
o deﬁned cont
ribution plan
s are
cha
rged to th
e inco
me state
ment as i
ncurr
ed.
Employee share plans
In
centi
ves in the f
orm of sh
ares a
re prov
ided to em
ployee
s
under share
option and
share a
ward schemes.
Th
e fair val
ues of th
ese opt
ions an
d awards a
re cal
culate
d at their
gra
nt dates u
sing a B
lack-Sch
oles op
tion pr
icing m
odel a
nd
cha
rged to th
e inco
me state
ment over th
e releva
nt vesti
ng peri
ods
.
2. Accounting principles and policies
continued
Notes to the ﬁnancial st
atements
c
ontinued
GS
K Ann
ual R
epor
t 2021
17
5
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e Group p
rovide
s ﬁna
nce to ESO
P T
r
usts to pu
rcha
se
co
mpany sh
ares to m
eet the ob
ligati
on to provi
de sha
res wh
en
emp
loyees ex
ercis
e their o
ptions o
r awards
. Co
sts of ru
nning th
e
ESO
P T
r
usts ar
e char
ged to the i
ncome s
tateme
nt.
Sha
res he
ld by the ES
OP T
rusts a
re ded
ucted fr
om othe
r
re
ser
ves
. A trans
fer is ma
de bet
ween ot
her re
ser
ves an
d retai
ned
ea
rning
s over the ves
ting pe
riod
s of the re
lated sha
re opti
ons or
awards
to
reﬂect the ul
timat
e proceeds receivable
from
employees
on ex
ercise.
Propert
y
, plant
and equipment
Pr
oper
ty, pla
nt and eq
uipme
nt (PP&E) i
s state
d at the cos
t of
purchase or construction,
less provisions
for deprecia
tion and
impairment.
Financing
costs
are capitalised
within
the
cost of
qualifying assets in construction.
Depreciation is
calculated
to
write o
ff the cost less residual
valu
e of PP&E
, exclu
ding fre
ehol
d land, u
sing th
e stra
ight-line
ba
sis over th
e expec
ted use
ful life
. Resi
dual va
lues a
nd lives a
re
review
ed, and where
appropriat
e adjust
ed annually
. The normal
exp
ected u
seful li
ves of th
e major c
ategor
ies of P
P
&E a
re:
Freehold buildings
20 to 50 years
Leasehold land and buildings
Lease term or 20 to 50 years
Plant and machinery
1
0 to 20 years
Equipment and vehicles
3 to 1
0 years
On di
spos
al of P
P
&E
, the co
st and r
elated ac
cumul
ated
depreciation and
impairments
are remov
ed from
the ﬁnancial
st
atements a
nd the ne
t amount
, les
s any pro
ceed
s, is t
aken
to the in
come s
tateme
nt.
Lease
s
Th
e Group r
ecog
nise
s right o
f use as
sets u
nder le
ase
ar
range
ments i
n whic
h it is the l
esse
e, exce
pt for sho
rt-term
le
ases (deﬁ
ned as l
eas
es wi
th a lea
se term of 1
2 month
s or
le
ss
) and le
ase
s of low val
ue as
sets
. Right
s to use as
sets
owned b
y th
ird parties under
lease agreements
are capitalised
at the i
ncept
ion of the l
eas
e and re
cogni
sed on th
e cons
olida
t
ed
balance shee
t.
Th
e corr
espo
nding li
abili
ty to the l
ess
or is rec
ogni
sed as a l
eas
e
obligation
within short and lon
g-t
erm borrowings. The
carr
ying
amo
unt is su
bsequ
ently i
ncre
ased to r
eﬂec
t intere
st on th
e
le
ase li
abili
ty and r
educ
ed by lea
se pay
ments ma
de.
For c
alc
ulating t
he disc
ounted l
eas
e liabi
lity o
n lea
ses wi
th annua
l
paym
ents of £2 m
illion o
r more
, the imp
licit r
ate in the le
ase i
s
use
d. If t
his is not ava
ilabl
e, the in
creme
ntal b
orrow
ing rate w
ith a
le
ase sp
eci
ﬁc adju
stmen
t is use
d. If ne
ither o
f these i
s availab
le,
and fo
r lea
ses wi
th annu
al payme
nts of le
ss tha
n £2 milli
on, the
incremental borrowing rat
e is
used. The incremental borrowing
rate i
s calc
ulated at th
e rate of inter
est at w
hich GS
K would h
ave
be
en able to b
orrow fo
r a simil
ar term a
nd with a s
imila
r secur
ity
the f
unds ne
ces
sar
y to obt
ain a sim
ilar a
sset i
n a simil
ar mar
ket.
Fi
nance c
osts a
re cha
rged to th
e incom
e statem
ent so a
s to
produce a constant
periodic rat
e of
charge on
the remain
ing
balance of the
obligat
ions for
each account
ing period.
V
ari
able r
ents ar
e not par
t of th
e leas
e liab
ilit
y and the r
ight of u
se
as
set. T
hes
e paymen
ts are ch
arge
d to the inc
ome st
atement a
s
incurred.
Short-
term
and l
ow-v
alue
leases are no
t capitalised
and
le
ase re
ntals a
re als
o char
ged to the in
come s
tateme
nt as in
curre
d.
Non-lease components are a
ccounted f
or separat
ely from
the
le
ase co
mpon
ents in pl
ant and e
quipm
ent le
ase
s but are n
ot
sep
aratel
y acc
ounted for i
n land a
nd build
ings or ve
hicle l
eas
es.
If m
odiﬁ
catio
ns or re
ass
ess
ments of l
eas
e oblig
ations o
ccur, the
le
ase li
abili
ty and r
ight of u
se as
set ar
e re-me
asu
red.
Ri
ght of use a
ss
ets whe
re title i
s expe
cted to pa
ss to GS
K at
a point
in the
future
are depreciat
ed on
a basis consist
ent with
sim
ilar ow
ned as
sets
. In oth
er ca
ses
, right of u
se as
sets a
re
dep
reci
ated over the s
hor
ter of the u
seful l
ife of the a
sse
t or
the l
ease te
rm.
Goodwill
Go
odwi
ll is sta
t
ed at c
ost le
ss imp
airm
ents
. Good
will is
dee
med to have an i
ndeﬁ
nite use
ful life a
nd is tes
ted for
imp
airm
ent at lea
st an
nuall
y
.
Wh
ere the fa
ir valu
e of the inter
est ac
quir
ed in an en
tity
’
s
assets, liabilities
and cont
ingent
liabilities
exceeds
the
consideration paid,
this e
xcess is recognised immed
iately
as a g
ain in th
e incom
e statem
ent.
Ot
her intangib
le assets
Int
angi
ble as
sets a
re state
d at cost l
ess p
rovisi
ons for
amor
tisat
ion and impairments.
Licences, patent
s, know-how
and
marketi
ng right
s separat
ely
acq
uired o
r acqui
red a
s par
t of a bus
ines
s comb
inatio
n are
amo
rti
sed over t
heir es
timate
d usefu
l lives
, gene
rally n
ot
exce
eding 3
0 year
s, us
ing the st
raig
ht
-lin
e basi
s, fr
om the
tim
e they are avai
labl
e for use
. The es
timated u
seful l
ives for
determini
ng the
amortisation charge take
int
o account
paten
t
live
s (
exclus
ivit
y per
iod), whe
re app
lica
ble, a
s well as t
he value
obtained fro
m periods o
f non-e
xclusivity
.
For Pharmaceutical
intangible assets, depending
on th
e characteristics, competitiv
e
envi
ronme
nt and es
timate
d long-ter
m proﬁ
ts of the a
sset
,
bet
ween 8
0% to 9
0% of the b
ook val
ue is amo
rt
ised over t
he
exclusivity period
on a
straight
-l
ine basis an
d the
remaining
boo
k value i
s amor
tis
ed over a non
-exclu
sivi
ty pe
riod of 5
-
1
5
yea
rs on a st
raigh
t
-lin
e basi
s. Fo
r V
accin
es int
angib
le ass
ets,
co
st is usu
ally a
mor
tise
d over the excl
usiv
ity p
erio
d plus 1
0
yea
rs, o
r 30 year
s if no exc
lusiv
ity p
erio
d is gra
nted, on a
str
aight-li
ne bas
is. A
sset l
ives ar
e reviewe
d, and w
here
appropriate
adjust
ed, annually
.
Co
ntinge
nt mile
stone p
a
yme
nts are r
ecog
nise
d at the poi
nt
that th
e conti
ngent eve
nt bec
omes p
robab
le. Any d
evelopm
ent
co
sts inc
urre
d by the Gro
up and a
ssoc
iated wi
th acqu
ired
lic
ence
s, pate
nts, k
now-h
ow or mar
keting ri
ghts ar
e writ
ten of
f
to the in
come s
tateme
nt when i
ncurr
ed, un
less t
he cri
t
eri
a for
recognition of
an int
ernally-generat
ed intangi
ble asset are met,
usu
ally w
hen a reg
ulator
y ﬁli
ng has b
een mad
e in a majo
r marke
t
and approv
al is
considered highly
probable.
Acq
uired b
rand
s are val
ued ind
epend
ently a
s par
t of the f
air val
ue
of bu
sines
ses a
cquir
ed fro
m third pa
rt
ies wh
ere the b
rand h
as a
value which
is substantial
and long-
t
erm and where
the brands
eit
her are c
ontr
actua
l or lega
l in natur
e or can b
e sold s
epar
ately
fro
m the res
t of the bu
sine
sse
s acqui
red. B
rand
s are am
ort
ised
over th
eir est
imated us
eful li
ves of up to 20 ye
ars us
ing the
straight
-line
basis, except where
it is considered
that
the usefu
l
economic life
is indeﬁnit
e.
2. Accounting principles and policies
continued
Notes to the ﬁnancial st
atements
c
ontinued
17
6
GS
K Ann
ual R
epor
t 2021
Th
e cost
s of acqui
ring a
nd develo
ping co
mputer s
oft
ware f
or
inter
nal us
e and inte
rnet si
tes for ex
tern
al use a
re cap
ital
ised a
s
int
angib
le ﬁxed a
sse
ts whe
re the sof
t
ware or s
ite supp
or
ts a
sig
niﬁc
ant bu
sine
ss syste
m and the ex
pendi
ture le
ads to the
cre
ation o
f a durab
le as
set. E
RP sys
t
ems s
oft
war
e is amor
ti
sed
over seve
n to ten year
s and oth
er com
puter so
ft
ware over t
hree
to ﬁve ye
ars us
ing the s
trai
ght-line ba
sis
.
Impairment of non-
current a
ssets
Th
e carr
yi
ng value
s of all no
n-cu
rrent a
sse
ts are rev
iewed for
imp
airm
ent, ei
ther on a s
tand
-alon
e basi
s or as pa
rt o
f a larg
er
ca
sh gen
erati
ng unit
, when th
ere is a
n indic
ation th
at the as
sets
might
be impa
ired. Add
itional
ly
,
goodwill,
intangi
ble assets
with
ind
eﬁnite u
seful l
ives an
d intan
gible a
sse
ts whic
h are not ye
t
avail
able for u
se are te
sted for i
mpair
ment a
nnual
ly
. Any
provision f
or impairment
is charged
to
the income
statemen
t
in th
e year co
ncer
ned.
Im
pair
ments of g
oodw
ill are n
ot rever
sed. I
mpai
rment l
osse
s on
othe
r non-c
urre
nt ass
ets ar
e only reve
rsed i
f ther
e has be
en a
cha
nge in e
stimate
s used to d
etermi
ne recove
rabl
e amoun
ts
and o
nly to the ex
tent th
at the revi
sed re
cover
able am
ounts d
o
not exc
eed th
e carr
yi
ng value
s that woul
d have exis
ted, net o
f
depreciation or
amortisation, had no
impairments been
recognised.
Invest
ment
s in associ
ates
, joint vent
ures and jo
int
operations
Inve
stmen
ts in as
soci
ates and j
oint vent
ures ar
e car
ried i
n the
co
nsolid
ated bal
ance s
heet at th
e Grou
p
’s share o
f their ne
t
as
sets at d
ate of acqu
isiti
on and of t
heir po
st-acqui
siti
on
ret
aine
d proﬁt
s or los
ses a
nd other c
ompr
ehens
ive inc
ome
toget
her wi
th any goo
dwill a
risi
ng on the ac
quisi
tion
. The Gr
oup
rec
ogni
ses it
s right
s t
o as
sets
, liab
ilitie
s, reve
nue and ex
pens
es
of joint operations.
Inv
entories
Inve
ntorie
s are inc
lude
d in the ﬁn
ancia
l statem
ents at th
e lower
of co
st (inc
luding r
aw materi
als
, direc
t labo
ur
, other di
rect c
osts
and relat
ed production
ov
erheads
)
and net
realisable value.
Co
st is ge
nera
lly dete
rmine
d on a ﬁr
st in, ﬁ
rst ou
t basi
s.
Pr
e-lau
nch inven
t
or
y is he
ld as an a
sse
t when th
ere is a h
igh
probability of regulat
ory approval for
the product. Before
that
poi
nt a provi
sion is m
ade aga
inst th
e car
ry
ing valu
e to its
rec
overa
ble amo
unt; the prov
isio
n is then r
everse
d at the po
int
when a hig
h probability of
regulat
ory approval is
det
ermined.
Financ
ial instrume
nts
Financial assets
Financial assets
are m
easured at
amortised cost, f
air v
alue
thro
ugh othe
r comp
rehe
nsive in
come (F
V
TOC
I) or fa
ir value
thro
ugh pro
ﬁt or lo
ss (F
V
TP
L). The me
asu
remen
t basi
s is
deter
mine
d by refer
ence to bo
th the bus
ines
s mode
l for
man
aging th
e ﬁnanc
ial a
sset a
nd the co
ntrac
tual c
ash ﬂ
ow
cha
racte
risti
cs of th
e ﬁnanc
ial a
sset
. For ﬁnanci
al assets
othe
r than tr
ade re
ceiva
bles a 1
2-month e
xpec
ted cre
dit los
s
(ECL)
allow
ance is recorded on
initial
recognition. If there
is
sub
sequ
ent evid
ence of a s
igni
ﬁca
nt incr
ease i
n the cre
dit ri
sk
of an a
sse
t, the al
lowanc
e is incr
eas
ed to reﬂ
ect the f
ull life
time
ECL
. I
f there i
s no rea
listi
c prosp
ect of r
ecover
y, the as
set is
written off.
Expected credit
losses are recog
nised in
the
income
stat
ement
on ﬁnancial
assets m
easured at
amortised cost an
d at
fair
valu
e
through
other comprehensiv
e income
apart from equity
inve
stme
nts
.
Other investments
Ot
her inves
tment
s comp
rise e
quit
y investm
ents an
d
inves
tment
s in limite
d life fu
nds. T
he Gr
oup has e
lecte
d to
de
signate th
e majo
rit
y of its eq
uity i
nvestme
nts as m
easu
red at
F
V
TOCI
. Th
ey are ini
tiall
y reco
rded at f
air valu
e plus tr
ansa
ction
co
sts and t
hen rem
eas
ured at s
ubseq
uent re
por
ting d
ates to
fair v
alue.
Unrealised
gains
and losses ar
e recognised
in
other
comprehensive in
come.
On di
spos
al of th
e equit
y inves
tment
, gains a
nd los
ses th
at have
been deferred in
Other comprehensive
income are
transferred
dir
ectly to r
etain
ed ear
nings
. Inve
stmen
ts in limi
ted life f
unds ar
e
me
asur
ed at F
V
TPL
. T
hey are in
itial
ly rec
orde
d at fair va
lue and
the
n reme
asur
ed at sub
seque
nt repo
rti
ng dates to f
air valu
e.
Unrealised g
ains an
d losses are
recognised
in t
he in
come
statemen
t.
Dividends on equity in
vestments
and d
istributions
from funds
are r
ecog
nise
d in the inc
ome st
atemen
t when th
e Group’s rig
ht
to rec
eive pay
ment is e
sta
blish
ed.
Pu
rcha
ses an
d sale
s of Oth
er inves
tments a
re acc
ounted f
or
on th
e trade d
ate.
T
rade receivables
T
rade re
ceiv
able
s are me
asur
ed in acc
orda
nce w
ith the
business model under
which each portfolio of t
rade receivables
is he
ld. Th
e Grou
p has po
rt
folio
s in eac
h of the thr
ee bus
ines
s
mod
els und
er IF
RS 9: to coll
ect the c
ontr
actua
l cas
h ﬂows
whe
re ther
e is no fac
toring a
gree
ment in pl
ace (mea
sure
d at
amo
rti
sed c
ost), to sell th
e contr
actua
l ca
sh ﬂows w
here th
e
tra
de rec
eivab
les wi
ll be sol
d under a f
actori
ng agre
ement
(mea
sured at F
V
T
PL), and b
oth to col
lect a
nd to sell th
e
co
ntrac
tual ca
sh ﬂow
s where t
he trad
e rece
ivabl
es may be s
old
und
er a facto
ring ar
rang
ement (me
asur
ed at F
V
TOCI). T
rad
e
receivables
measured at
amortised cost
are carried a
t th
e
original
inv
oice
amount
less allo
wances
for
expected
credit
losses.
Expected credit
losses are calcu
lat
ed in
accordance wit
h th
e
simpliﬁed approach permitted
by IFRS 9,
using a
provision
matrix
app
lying l
ifetim
e histor
ica
l credi
t loss e
xper
ienc
e to the trad
e
receivables. The
expect
ed credit
loss ra
te
varies
dependin
g
on wh
ether, and th
e exten
t to which
, set
tleme
nt of the tr
ade
rec
eiva
bles i
s overdue a
nd it is a
lso adj
usted a
s appro
priate to
reﬂect current economic
conditions and
estimat
es of fu
ture
co
nditio
ns. Fo
r the pur
pose o
f determ
ining cr
edit l
oss ra
tes,
cus
tomer
s are cl
ass
iﬁe
d into group
ings th
at have simil
ar los
s
pat
terns
. The key d
river
s of the lo
ss rate a
re the natu
re of the
bus
ines
s unit an
d the loc
ation a
nd ty
pe of cus
tomer.
Wh
en a trad
e rece
ivabl
e is deter
mined to h
a
ve no re
aso
nable
exp
ectat
ion of re
cover
y it is w
rit
ten of
f, ﬁrs
tly aga
inst any
exp
ected c
redit l
oss a
llowanc
e availab
le and th
en to the
income statement.
Sub
sequ
ent rec
overie
s of amo
unts prev
ious
ly provi
ded for o
r
wr
itten o
ff a
re cred
ited to the in
come s
tateme
nt. Lo
ng-term
receivables are discount
ed where
the effect is ma
terial.
Notes to t
he ﬁnancial s
tateme
nts
conti
nued
2. Accounting principles and policies
continued
GS
K Ann
ual R
epor
t 2021
17
7
Strategic report
Governance and remuneration
Financial statements
Investor information
Cash and cash equivalents
Ca
sh hel
d in depo
sit ac
count
s is mea
sure
d at amor
tis
ed co
st.
Inve
stmen
ts in mon
ey market f
unds ar
e held at f
air valu
e throug
h
pro
ﬁt or lo
ss be
caus
e the fund
s fail th
e sole
ly payme
nts of
principal and interest (
SPPI) test.
Borrowings
All b
orrow
ings a
re initi
ally r
ecor
ded at the a
mount of p
roce
eds
rec
eive
d, net of tr
ans
actio
n cost
s. Bor
rowin
gs are s
ubseq
uentl
y
carried at
amortised cost, with
the
difference between
the
pro
ceed
s, net o
f trans
acti
on cos
ts, an
d the amo
unt due on
redemption bein
g recognised as a
charge t
o the
income
st
atement ove
r the per
iod of th
e relevan
t borr
owing.
Derivative ﬁnancial instruments
De
rivati
ve ﬁnanc
ial in
strum
ents ar
e used to ma
nage ex
posur
e
to mar
ket ris
ks. Th
e prin
cipal d
erivat
ive inst
rume
nts use
d by
GS
K are for
eign cu
rren
cy swaps
, inter
est rate s
waps
, foreig
n
exch
ange for
wa
rd cont
racts a
nd opti
ons. T
he Gro
up doe
s not
hol
d or iss
ue der
ivative ﬁ
nanci
al ins
trume
nts for tr
ading or
speculat
ive
purposes.
De
rivati
ve ﬁnanc
ial a
ssets a
nd lia
biliti
es, i
ncludi
ng der
ivative
s
emb
edde
d in hos
t contr
acts w
hich have b
een sep
arate
d from
the h
ost co
ntrac
t, are c
las
siﬁe
d as he
ld-for-trad
ing and a
re
me
asur
ed at fair va
lue. C
hange
s in the fa
ir valu
e of any der
ivative
ins
trume
nts that d
o not qual
if
y for hedg
e acco
unting a
re
recognised immediat
ely in
the in
come statemen
t.
Hedge accounting
De
rivati
ves des
ignated a
s hed
ging ins
trume
nts are c
las
siﬁ
ed
at incept
ion of
hedge relat
ionship as cash ﬂow
hedges, net
investment
hedges or fair
value hedges.
Cha
nges i
n the fai
r value of d
erivat
ives de
sign
ated as c
ash ﬂow
hedges are recognised in
other
comprehensive
income t
o the
ex
tent that t
he hedg
es are e
ffe
ctive
. Inef
fec
tive por
ti
ons are
recognised in proﬁt
or loss immedia
tely
.
Amounts
deferred in
other comprehensiv
e income
are reclassiﬁed to the
income
st
atement w
hen the h
edge
d item af
fect
s proﬁt o
r los
s.
Net i
nvestm
ent hed
ges ar
e acco
unted for i
n a simila
r way to
ca
sh ﬂow h
edge
s.
Cha
nges i
n the fai
r value of d
erivat
ives de
sign
ated as fa
ir value
hed
ges ar
e reco
rded i
n the inc
ome st
atement
, togeth
er with th
e
cha
nges i
n the fai
r value of th
e hedge
d as
set or li
abilit
y.
Ta
x
a
t
i
o
n
Cur
rent t
ax i
s provid
ed at the a
mounts ex
pec
t
ed to be p
aid,
app
lying t
ax r
ates tha
t have been e
nacted o
r subs
tanti
vely
ena
cted by the b
alan
ce she
et date.
Deferred tax is provided i
n full,
on t
emporar
y
differences arising
bet
ween t
he ta
x bas
es of a
sset
s and lia
biliti
es and t
heir c
arr
ying
amo
unts in th
e ﬁnanc
ial st
atemen
ts. De
ferre
d ta
x as
sets ar
e
rec
ogni
sed to the ex
tent t
hat it is pr
obab
le that fu
ture ta
xa
ble
proﬁts will
be a
vailab
le against
which t
he t
emporary differences
ca
n be util
ised
. Defer
red ta
x is p
rovide
d on temp
orar
y
differences arising on
inv
estments
in subsid
iaries, associates
and j
oint ventu
res
, except w
here th
e timin
g of the rever
sal o
f the
temp
orar
y di
ffe
renc
e can be c
ontro
lled an
d it is pr
obabl
e that
the tem
pora
ry d
if
ferenc
e will n
ot rever
se in the fo
rese
eabl
e
futu
re. De
ferre
d ta
x is prov
ided u
sing rate
s of ta
x that have b
een
ena
cted or su
bsta
ntivel
y enac
t
ed by th
e bala
nce sh
eet date.
Where an uncertain ta
x
position is
identiﬁed, management
will
make a j
udgem
ent as to w
hat the pr
obab
le outco
me will b
e,
as
sumi
ng the rel
evant ta
x aut
horit
y ha
s full k
nowle
dge of the
sit
uation
. Wher
e it is as
ses
sed th
at an ec
onomi
c out
ﬂow is
pro
babl
e t
o ari
se, a pr
ovisi
on is mad
e for the be
st es
timate of
the li
abili
ty. In es
timati
ng any suc
h liabi
lity G
SK ap
plies a
risk
-based approach which
takes in
to
account, as appropriat
e,
the probability that
the Group
would be
able t
o obtain
compensatory adjustments
under in
ternat
ional tax treaties.
Th
ese es
timate
s take into ac
coun
t the spe
ciﬁ
c circu
msta
nces
of ea
ch disp
ute and re
levant ex
ter
nal adv
ice.
Discounting
Wh
ere the ti
me value o
f money is m
ateria
l, bal
ance
s are
dis
counte
d to curre
nt value
s usin
g appro
priate di
scou
nt rates
.
Th
e unwindi
ng of the di
scou
nts is re
cord
ed in ﬁna
nce in
come
and ﬁnance
expense.
2. Accounting principles and policies
continued
Notes to t
he ﬁnancial s
tateme
nts
conti
nued
3
. Critical accounting judgements and ke
y so
urces of estimation uncer
taint
y
In preparing the
ﬁnancial stat
ements, managemen
t is requ
ired
to make ju
dgem
ents ab
out whe
n or how ite
ms shoul
d be
recognised i
n the
ﬁnancial
stat
ements
and
estimat
es an
d
as
sumpt
ions tha
t affe
ct the a
mounts o
f ass
ets, li
abili
ties
,
reven
ue and ex
pense
s repo
rte
d in the ﬁn
ancia
l state
ments
.
Actu
al amo
unts and r
esul
ts coul
d dif
fer fro
m thos
e estim
ates.
Th
e followi
ng are c
onsid
ered to b
e the cri
tica
l acco
unting
judgements an
d ke
y sources o
f estimatio
n uncertaint
y
.
Tu
r
n
o
v
e
r
Rep
or
ted Grou
p turnove
r for 202
1 was £
34,
1
1
4 millio
n
(2020 – £34
,099 m
illion).
Estimates
Gr
oss tur
nover is r
educe
d by reba
t
es
, disc
ounts
, allowa
nces
and p
roduc
t retur
ns given o
r expec
ted to be gi
ven, whi
ch
var
y by pro
duct a
rran
gemen
ts and bu
ying gr
oups
. Thes
e
arrangements with
purchasing organisation
s are dependen
t
upo
n the sub
miss
ion of cl
aims s
ome time a
fter th
e initi
al
rec
ogni
tion of th
e sale
. Accr
uals a
re made a
t the time of s
ale
for th
e estim
ated reb
ates, d
isco
unts or al
lowanc
es payab
le or
returns
to be
made, based on
av
ailable mark
et inf
ormation and
histo
rical experience.
17
8
GS
K Ann
ual R
epor
t 2021
Notes to t
he ﬁnancial s
tateme
nts
conti
nued
The US Pharmaceuticals business has the largest and most
co
mplex ar
rang
ement
s for reb
ates, di
scou
nts and a
llowanc
es
.
Th
e US Pha
rmac
eutic
als tur
nover for 2021 of £
8,442 mil
lion
(2020 – £
7
,4
5
1 mill
ion) was af
ter rec
ordi
ng dedu
ctions o
f
£1
1
,486 m
illio
n (
2020 – £
1
2,
584 mi
llion) for reb
ates, d
isco
unts,
all
owance
s and re
turns
. The ba
lanc
e shee
t accr
uals fo
r rebate
s,
dis
count
s, all
owance
s and re
turns for t
he US Ph
arma
ceuti
cal
s
and Vacc
ines bu
sine
sse
s are ma
naged o
n a comb
ined ba
sis
.
At 3
1 De
cemb
er 202
1
, the total a
ccru
al amo
unted to
£
5,04
4 millio
n (
2020 – £4
,686 mi
llion). Bec
ause of t
he natur
e
of the
se ac
crua
ls it is not p
ract
icab
le to give me
aning
ful
sen
sitiv
ity e
stim
ates due to th
e large vo
lume of va
riab
les that
contribute
to
the o
verall
rebat
es, chargebacks, returns
and
othe
r revenue a
ccru
als
.
As th
ere ca
n be sig
niﬁc
ant var
iabi
lity i
n ﬁnal o
utcome
s, th
e
group app
lies a
constraint when
measuring t
he v
ariable element
wit
hin reven
ue, so th
at revenue i
s reco
gnise
d at a suit
ably
ca
utious a
mount
. The ob
ject
ive of the c
onstr
aint is to e
nsure
that i
t is high
ly prob
able th
at a signi
ﬁc
ant rever
sal o
f revenue w
ill
not oc
cur wh
en the un
cer
tai
nties a
re res
olved
. The c
onstr
aint is
app
lied by m
akin
g suita
bly c
autiou
s esti
mates of th
e inputs a
nd
assumptions used in
estimating
the
variable consideratio
n.
Be
caus
e the amo
unts are e
stim
ated they may n
ot fully r
eﬂec
t
the ﬁ
nal outc
ome, a
nd the am
ounts ar
e subje
ct to cha
nge
dependent upon,
amongst ot
her thin
gs, the types of buyin
g
gro
up and pr
oduct s
ale
s mix. T
he co
nstra
ints ap
plied i
n
rec
ogni
sing reve
nue mea
n that the r
isk of a m
ateria
l downwar
d
adj
ustme
nt to revenue i
n the nex
t ﬁna
ncial ye
ar is lo
w
.
Th
e level of ac
crua
l for reb
ates and r
eturns i
s reviewe
d and
adj
usted re
gular
ly in the l
ight of c
ontra
ctual a
nd lega
l
obligations, h
istorical trends, past e
xperience and project
ed
market cond
itions. Market condit
ions are e
valua
ted
using
wholesaler and other
third-party analyses
,
market
research data
and int
ernally-generat
ed info
rmation. It is
reasonably possible
that th
ere co
uld be a si
gniﬁ
cant a
djus
tment wi
thin the n
ext 1
2
mon
ths to rec
ognis
e additi
onal r
evenue, i
f actua
l outco
mes ar
e
bet
ter tha
n the ca
utious c
onst
raine
d esti
mates
. Revenue i
s not
rec
ogni
sed in fu
ll until i
t is high
ly prob
able th
at a signi
ﬁc
ant
rever
sal i
n the amo
unt of cum
ulative r
evenue re
cogn
ised w
ill
not oc
cur. The am
ount of tur
nover re
cogni
sed in th
e year fr
om
per
f
ormance obligation
s satisﬁed in
previous periods
is set
out
in No
te 6, ‘T
urnover a
nd seg
ment inf
ormati
on’
, a
nd is an
indi
cati
on of the leve
l of sens
itiv
ity in t
he est
imate.
Futu
re events c
ould c
ause th
e ass
umptio
ns on whi
ch the
acc
rual
s are ba
sed to ch
ange
, which c
ould m
aterial
ly af
fect
the f
uture re
sults o
f the Gro
up.
Ta
x
a
t
i
o
n
Th
e ta
x charg
e for the ye
ar was £
346 mi
llion (2020 –
£
580 mil
lion). At Dec
ember 2021
, curre
nt ta
x payab
le was
£
489 mil
lion (2020 – £5
45 milli
on
), non-
curr
ent cor
pora
tion
ta
x payab
le was £1
80 mill
ion (2020 – £
1
7
6 mill
ion) and cur
rent
ta
x re
covera
ble was £
48
6 millio
n (
2020 – £67
1 milli
on
).
Estimates
Th
e Group h
as ope
n ta
x iss
ues wi
th a numbe
r of revenu
e
authorities. Management makes a judgement
of whether
there is
suf
ﬁcient
informat
ion t
o be able
to
make
a reliable
estimate
of
the out
come of
the disp
ute.
If insufﬁ
cien
t informa
tion is
av
ailable,
no pro
vision is mad
e.
If s
uf
ﬁcie
nt infor
matio
n is availa
ble, in e
stim
ating a pote
ntial t
ax
liability GSK applies
a risk
-bas
ed
approach
which tak
es int
o
account, as appropriate,
the probability that
the Group w
ould
be able t
o obtain
compensatory adjustments
under
interna
tional
ta
x tre
aties
. The
se es
timates t
ake into ac
count t
he spe
ciﬁc
cir
cumst
anc
es of eac
h disp
ute and re
levant ex
tern
al adv
ice,
are inherent
ly judgemental
and could
change substantially
ov
er
time as each
dispute
progresses and ne
w facts
emerge.
At 3
1 De
cemb
er 202
1
, the Gro
up had re
cogni
sed pr
ovisio
ns
of £
858 mi
llion in r
esp
ect of un
cer
tai
n ta
x posi
tions (2020 –
£
856 mill
ion). Due to the nu
mber of u
ncer
ta
in ta
x pos
itions h
eld
and t
he numbe
r of juri
sdic
tions to w
hich the
se rel
ate, it is n
ot
pr
actic
able to gi
ve mea
ningfu
l sensi
tivi
ty es
timate
s. No
unc
er
tain t
ax p
ositi
on is in
divid
ually s
igni
ﬁca
nt to the Gro
up.
Fac
tors af
fec
ting the t
ax c
harg
e in futur
e year
s are set o
ut in
Note 1
4, ‘T
ax
ation’
. GSK c
ontin
ues to bel
ieve that it h
as mad
e
adequat
e provision
for
the liabi
lities lik
ely t
o arise fr
om open
as
ses
smen
ts. Wh
ere op
en iss
ues exi
st, th
e ultima
te liabil
ity
for su
ch mat
ters may va
ry f
rom the a
mounts p
rovid
ed and is
dep
ende
nt upon th
e outcom
e of nego
tiatio
ns with th
e releva
nt
ta
x aut
horit
ies or, if nec
ess
ar
y
, liti
gation p
roce
eding
s.
Leg
al and oth
er dispute
s
Le
gal co
sts for th
e year wer
e £52 mill
ion (2020 – £23
1 milli
on
).
At 3
1 De
cemb
er 202
1 provi
sions f
or lega
l and oth
er disp
utes
amo
unted to £1
96 m
illio
n (
2020 – £320 mi
llion).
Estimates
Management makes
a judgement
of whet
her there
is sufﬁcient
info
rmati
on to be abl
e to make a rel
iable e
stim
ate of the like
ly
outc
ome of th
e dispu
te and the le
gal an
d other ex
pens
es ari
sing
from claims a
gainst the
Group. If in
suf
ﬁcient
informat
ion is
avai
lable, no pr
ovision is
made and
disclosure o
f the
claim is
give
n.
Th
e estim
ated prov
ision
s take into ac
coun
t the spe
ciﬁ
c
cir
cumst
anc
es of eac
h disp
ute and re
levant ex
tern
al adv
ice, a
re
inherently
judgemental and
could change
substantially o
ver
time
as e
ach dis
pute pro
gres
ses a
nd new fac
ts emer
ge. De
tail
s of
the s
tatus an
d vario
us unce
rt
ainti
es invol
ved in the s
igniﬁ
can
t
unr
esol
ved disp
utes ar
e set out i
n Note 46, ‘
Leg
al proc
eedi
ngs’
.
The company’
s Directors, having
taken
legal advice,
hav
e
established provisions
after taking int
o account
the rele
vant
fac
ts and ci
rcums
tanc
es of e
ach mat
ter and in a
cco
rdanc
e with
accounting
requiremen
ts. In respect of
product
liability claims
related
to
cert
ain
products, there
is sufﬁcient history of claims
mad
e and set
tlem
ents to en
able ma
nagem
ent to make a r
eliab
le
estimate
of t
he pro
vision required
to
cover
unasser
t
ed claims.
3. Critical accounting judgements and key sources of estimation uncertainty
continued
GS
K Ann
ual R
epor
t 2021
17
9
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e Group p
reviou
sly ac
counte
d for Sa
aS (
sof
tw
are as a
ser
vice
) conﬁguration and cust
omisation
costs as intangible
as
sets
. Foll
owing th
e IFR
S IC (I
nterpr
etatio
n Com
mitte
e
)
age
nda dec
isio
n on Sa
aS in Ap
ril 202
1
, the Gr
oup has a
dopted
the tr
eatme
nt set ou
t in the I
FRS I
C agend
a deci
sion an
d
expensed conﬁguration
and cust
omisation
costs where the
enti
ty do
es not c
ontrol t
he sof
twa
re bei
ng conﬁ
gure
d. The
imp
acts of th
e chan
ge were an i
mpai
rment o
f £68 mil
lion fr
om
prev
ious
ly cap
itali
sed in
tangi
ble as
sets a
nd an inc
rea
se in 202
1
exp
ense
s of £4
0 millio
n pres
ented in S
elling
, gene
ral an
d
administrat
ion and R
esearch and dev
elopment.
Wh
ere the r
etirem
ent ben
eﬁt to wh
ich an e
mployee i
s entit
led is
ca
pped at a s
peci
ﬁed nu
mber of c
onse
cutive ye
ars
, the G
roup
prev
ious
ly acc
ounted fo
r these e
mploye
e beneﬁ
ts fro
m the
employment commencement dat
e. Follo
wing the
IFRS IC
agenda decision
on Attributing
Beneﬁt to
Periods o
f Service in
May 2021
, the Gro
up has a
dopted th
e treatm
ent set o
ut in the
IF
RS I
C agend
a decis
ion to ac
count fo
r the emp
loyee be
neﬁts
dur
ing the la
st sp
eciﬁ
ed num
ber of yea
rs wh
ere the e
mploye
e
ea
rn the be
neﬁt
. The im
pact o
f the cha
nge was a r
educt
ion of
exp
ense
s of £42 mill
ion pre
sente
d in Co
st of sa
les
, Sellin
g,
general and adm
inistration
and Research and
dev
elopment.
Dur
ing the ye
ar
, the G
roup imp
leme
nted ‘I
ntere
st Rate
Be
nchma
rk Refo
rm Pha
se 2 - Am
endme
nts to IF
RS 9, I
AS 39,
IF
RS 7
, I
FRS 4 a
nd IF
RS 1
6
’ which wa
s iss
ued in Au
gust 2020
and a
dopted by th
e UK En
dors
ement B
oard o
n 5 Janua
ry 2021
.
The amendments address issues that
arise from implementation
of the
reforms, includi
ng the
replacement of
one benchmark
wit
h an alter
native o
ne. A pr
actic
al exp
edien
t is provi
ded su
ch
that th
e chan
ge to contr
actua
l ca
sh ﬂows fo
r ﬁnanc
ial a
ssets
and liabi
lities (
includin
g lease liabil
ities
)
is accoun
ted
for
pro
spec
tivel
y by revisi
ng the ef
fec
tive inte
rest r
ate. In ad
ditio
n,
hedge a
ccounting
will
not
be d
iscontin
ued solely
because o
f
the I
BOR r
eform
. Fur
ther in
format
ion is pr
ovide
d in Note 43
.
Cer
tain new accounting
standards
,
amendments to
accounting
st
andar
ds and i
nterpr
etatio
ns have bee
n publi
shed th
at are not
man
dator
y for 31 Dece
mber 2021 repo
rt
ing per
iods a
nd have
not b
een ea
rly ado
pted by the gr
oup. T
hese s
tand
ards
,
ame
ndmen
ts or inter
pret
ations a
re not exp
ected to h
ave a
mater
ial im
pact on t
he Gro
up in the cu
rrent o
r futur
e repor
tin
g
periods.
4
. New accounting requirement
s
3. Critical accounting judgements and key sources of estimation uncertainty
continued
Notes to t
he ﬁnancial s
tateme
nts
conti
nued
Th
e Group m
ay beco
me involve
d in leg
al proc
eedi
ngs, i
n resp
ect
of wh
ich it is n
ot pos
sibl
e t
o mea
ningf
ully a
sse
ss whe
ther the
outc
ome wil
l resu
lt in a pro
bable o
ut
ﬂow
, or to qua
ntif
y or rel
iabl
y
es
timate the l
iabil
ity. In th
ese ca
ses
, app
ropri
ate disc
losur
e abou
t
suc
h cas
es woul
d be provi
ded, b
ut no prov
isio
n would be m
ade
and n
o conti
ngent li
abili
ty c
an be qua
ntiﬁ
ed.
Th
e ultimate l
iabil
ity fo
r legal c
laim
s may var
y from t
he amou
nts
provided and
is dependen
t upon t
he out
come of
litigation
proceedings, inv
estigations
and possible settlement
negotiat
ions.
Th
e posit
ion co
uld cha
nge over tim
e and, t
herefo
re, the
re ca
n be
no a
ssur
ance th
at any los
ses t
hat res
ult fro
m the outc
ome of any
leg
al pro
ceed
ings wi
ll not exce
ed the a
mount of t
he provi
sions
rep
or
ted in the G
roup’s ﬁnan
cial s
tatemen
ts by a materi
al amo
unt.
Contingent consideration
Th
e 202
1 incom
e statem
ent cha
rge for c
onting
ent
co
nside
ratio
n was £1
,0
63 mil
lion (2020 – £
1
,27
5 milli
on
).
At 3
1 De
cemb
er 202
1
, the liab
ilit
y for con
tinge
nt cons
ider
ation
amo
unted to £6
,07
6 milli
on (
2020 – £5
,869 m
illion). Of t
his
amo
unt, £
5,5
59 millio
n (
2020 – £5
,359 mi
llion) rela
t
ed to the
acquisition of
the
former Shionog
i-
ViiV Healthcare joint v
enture
in 201
2.
Estimates
Any contin
gent considerat
ion included
in the
consideration
payab
le for a bu
sines
s com
binati
on is rec
orde
d at fair va
lue at
the d
ate of acqui
siti
on. Th
ese fa
ir value
s are ge
nera
lly ba
sed on
risk
-adjust
ed futu
re cash ﬂows
discounted
using appropria
te
pos
t
-ta
x dis
count r
ates. T
he fai
r value
s are revi
ewed on a
reg
ular ba
sis
, at lea
st ann
ually, and a
ny chang
es are r
eﬂec
ted in
the income
statement.
See Not
e 3
2, ‘Contingent
consideration
liabilities
’
.
Pensions
and o
ther post-emplo
yment beneﬁts
Judgement
Wh
ere a sur
plus on a d
eﬁne
d bene
ﬁt sch
eme ar
ises
, or the
re
is po
tential f
or a surp
lus to ari
se fro
m commi
tted f
uture
co
ntribu
tions
, the ri
ghts of the Trustee
s to prevent t
he Gro
up
obt
ainin
g a refun
d of that sur
plus in t
he futur
e are co
nsid
ered in
deter
minin
g wheth
er it is ne
ces
sar
y to re
stri
ct the am
ount of th
e
sur
plus th
at is rec
ognis
ed. T
hree U
K sche
mes ar
e in sur
plus
, with
a co
mbine
d surpl
us of £6
06 milli
on at 3
1 De
cemb
er 202
1 (
2020
– £
7
7 mil
lion
)
. There are
further recognised pension surpluses
tota
lling £1
3
5 milli
on spre
ad acr
oss 6 c
ountri
es (2020 – £
1
0
6
mill
ion acr
oss 6 c
ountri
es
). GS
K has ma
de the ju
dgeme
nt that
the
se amo
unts mee
t the req
uirem
ents of re
cover
abili
ty.
Estimates
Th
e cost
s of provi
ding pe
nsion
s and othe
r post-e
mploym
ent
ben
eﬁts a
re as
ses
sed on th
e bas
is of as
sumpt
ions se
lecte
d by
management. These assumptions
include fut
ure earnings
and
pen
sion in
crea
ses
, disc
ount r
ates, ex
pecte
d long-ter
m rates o
f
retu
rn on as
sets a
nd mor
ta
lity r
ates, a
nd are di
sclo
sed in N
ote
30, ‘
Pens
ions an
d other po
st-emp
loymen
t bene
ﬁts’
.
Di
scoun
t rates ar
e deri
ved fro
m AA r
ated co
rpor
ate bond yi
elds
exce
pt in cou
ntrie
s wher
e there i
s no dee
p market i
n corp
orate
bonds where go
vernment
bond yields
are used. A
sensitivity
ana
lysis i
s provi
ded in N
ote 30, ‘P
ensio
ns and oth
er pos
t
-
emp
loyme
nt bene
ﬁts’
, a 0.25% r
educt
ion in th
e disc
ount rate
woul
d lead to an i
ncre
ase in t
he net pe
nsion d
eﬁci
t of
approximat
ely £
7
7
2
million
and an in
crease in the
annual pension
co
st of app
roxima
tely £1
7 m
illio
n. Simi
larl
y
, a 0.25% in
crea
se in
the di
scou
nt rate woul
d lead to a de
crea
se in th
e net pen
sion
deﬁcit of appro
ximat
ely £
7
29 m
illion an
d a decrease in
the ann
ual
pension cost of
approxima
tely £
1
9 mi
llion. The
selection of
dif
fer
ent as
sumpt
ions c
ould af
fect t
he futur
e resu
lts of the G
roup.
18
0
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
6
. T
urn
o
ver a
nd segment inf
ormation
Op
eratin
g segm
ents ar
e repor
ted b
ased o
n the ﬁna
ncia
l infor
mation p
rovid
ed to the Chi
ef E
xecuti
ve Of
ﬁc
er and th
e resp
onsib
iliti
es
of the G
SK Le
ader
ship T
eam (GL
T
). GSK r
epor
ts re
sults u
nder fou
r segme
nts: Pha
rmac
eutic
als; Ph
arma
ceuti
cal
s R&D; V
acc
ines
and C
ons
umer He
alth
care
, and ind
ivid
ual mem
ber
s of the GLT are re
spons
ible for e
ach se
gment
.
Th
e Group’s mana
geme
nt repo
rti
ng proc
ess a
lloc
ates intr
a-G
roup pr
oﬁt on a p
roduc
t sal
e to the mar
ket in whi
ch that s
ale is
rec
orde
d, and t
he proﬁ
t anal
yses b
elow have be
en pre
sente
d on that ba
sis
.
Co
rpor
ate and oth
er unal
locate
d turnove
r and co
sts inc
lude
s the res
ults of c
er
tain C
onsu
mer He
althc
are p
roduc
ts whic
h are be
ing
hel
d for sa
le in a numb
er of ma
rkets in or
der to me
et anti-tr
ust ap
proval r
equir
ement
s, toget
her wit
h the co
sts of co
rpor
ate funct
ions
.
Revenu
e rec
ognis
ed in the ye
ar fro
m per
form
ance o
bligat
ions s
atisﬁ
ed in pr
evious p
erio
ds total
led £1
,
558 mil
lion (2020 – £
1
,207
mill
ion) and inc
luded £1
,069 m
illion (2020 – £6
49 millio
n
) impac
ting tur
nover ar
ising f
rom ch
anges to p
rior ye
ar est
imates of R
A
R
(retur
ns and re
bates) accr
uals
, £6
1 mill
ion (2020 – £238 mil
lion) of mile
stone in
come a
nd £428 mill
ion (2020 – £320 mil
lion) of
royal
ty in
come r
ecog
nised i
n the cur
rent yea
r
.
T
urnover by segment
2021
£m
2020
£m
2019
£m
Pharmaceuticals
1
7,
7
2
9
17
,056
1
7
,554
V
accines
6
,778
6,982
7
,15
7
Consumer Healthcare
9,607
1
0,033
8,9
95
Segment turnover
34,1
14
3
4,0
71
33,
7
06
Corporate and other unallocated turnover
–
28
48
34,1
14
34,099
33,
754
GS
K has r
eviewed th
e pres
entati
on of its p
harm
aceu
tica
ls prod
ucts an
d from 1 J
anuar
y 2021 has move
d sale
s of
Arnuity Ellipta
,
Incruse Ellipta
and
R
elvar
/Breo Ellipta
from t
he Respiratory therapeutic area t
o the
Established Phar
maceuticals therapeutic
area
.
Co
mpar
ative inf
ormati
on has b
een rev
ised o
n to a cons
istent b
asis
.
Pharmaceuticals turnover by therapeutic area
2021
£m
2020
(revised)
£m
20
19
(revised)
£m
Respiratory
2,863
2,3
60
1,800
H
IV
4
,777
4
,876
4,85
4
Immuno-inﬂammation
885
727
613
Oncology
489
372
230
Pandemic
958
–
–
New and Specialty
9,9
72
8,335
7,
4
9
7
Established Pharmaceuticals
7
,757
8,
7
21
1
0,05
7
1
7,
7
2
9
17,
0
5
6
17,
5
5
4
V
accines turnover by category
2021
£m
2020
£m
2019
£m
Meningitis
9
61
1,029
1,0
18
Inﬂuenza
679
73
3
541
Shingles
1,
7
21
1,9
89
1,81
0
Established V
accines
2,9
70
3,231
3
,7
8
8
6,331
6,982
7
,157
Pandemic V
accines
4
47
–
–
6
,778
6,982
7
,15
7
Th
e Group u
ses th
e a
vera
ge of exch
ange ra
tes preva
iling dur
ing the p
erio
d to trans
late the re
sults a
nd ca
sh ﬂows o
f overse
as
sub
sidi
arie
s, joi
nt venture
s and a
ssoc
iates in
to Sterlin
g and per
iod en
d rates to tr
ansla
te the net as
sets o
f those e
ntitie
s. T
he
cur
renci
es wh
ich mos
t inﬂu
ence th
ese tr
ansl
ations a
nd the re
levant exch
ange r
ates were:
5
. Exchange rates
2021
2020
2019
Average rates:
US$/£
1.38
1.29
1.28
Euro/£
1.1
6
1.13
1.14
Yen/£
15
1
1
37
13
9
2021
2020
2019
Period end rates:
US$/£
1.35
1.36
1.32
Euro/£
1.1
9
1.11
1.18
Yen/£
15
5
141
143
GS
K Ann
ual R
epor
t 2021
181
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
6. T
urnover and segment information
continued
Dur
ing 2021
, th
e US ope
ration
s of the Ph
arma
ceuti
cal
s and V
acc
ines b
usine
sse
s made s
ales to t
hree wh
oles
aler
s of
£
3,
159 millio
n (
2020 – £2,928 mil
lion, 201
9 – £2,8
35 mill
ion)
, £
3,081 mill
ion (2020 – £3
,085 m
illion
, 20
1
9 – £
3,
1
46 mi
llion)
and £
2,67
0 milli
on (
2020 – £2,795 mill
ion, 201
9 – £
2,820 mil
lion) resp
ecti
vely, after a
lloc
ating ﬁ
nal-c
ustom
er disc
ounts to th
e
wholesaler
s.
Consumer Healthcare turnover by category
2021
£m
2020
£m
2019
£m
Oral health
2
,732
2,
753
2
,673
Pain relief
2,
276
2,219
1,
781
Vitamins
,
minerals and supplements
1,51
2
1,50
6
611
Respiratory health
1,1
33
1,209
1,18
6
Dige
stive
health and other
1,803
1,824
1,6
46
9,45
6
9,511
7,
8
9
7
Brands divested/
under
review
15
1
522
1,0
98
9,607
1
0,033
8,9
95
Segment proﬁt
2021
£m
2020
£m
20
19
£m
Pharmaceuticals
8,1
7
0
7,
7
2
3
7
,964
Pharmaceuticals R&D
(3,489)
(3,53
8)
(3,3
69)
Pharmaceuticals, including R&D
4,681
4,185
4,595
V
accines
2,256
2,
713
2,96
6
Consumer Healthcare
2,23
9
2,213
1,87
4
Segment proﬁt
9,1
76
9,111
9,435
Corporate and other unallocated costs
(370
)
(205)
(4
63)
Other reconciling items between segment proﬁt and operating proﬁt
(2,605)
(1,123)
(2,0
11)
Operating proﬁt
6,201
7,
7
8
3
6,961
Finance income
28
44
98
Finance costs
(784)
(8
92)
(912)
Loss on disposal of interest in associates
(36)
–
–
Share of after-tax proﬁts of associates and joint ventures
33
33
74
Proﬁt before tax
ation
5,442
6,96
8
6,221
T
axation
(34
6)
(5
80)
(953)
Proﬁt after tax
ation for the year
5,09
6
6,38
8
5,268
Ot
her rec
onci
ling item
s bet
ween se
gment p
roﬁt a
nd oper
ating p
roﬁt c
ompr
ise item
s not spe
ciﬁ
call
y alloc
ated to se
gment pr
oﬁt
.
Th
ese inc
lude i
mpair
ment an
d amor
tis
ation o
f intan
gible a
sset
s
; maj
or res
truc
turing c
osts
, whic
h inclu
de imp
airme
nts of ta
ngibl
e
assets and comput
er software; transaction-rela
ted
adjustments
relat
ed t
o signiﬁcant acquisition
s;
proceeds and costs
of disposals
of a
ssoc
iates
, produ
cts and b
usin
esse
s, si
gniﬁ
cant l
egal c
harg
es and ex
pens
es on the s
ettl
ement o
f litig
ation an
d governm
ent
inves
tigati
ons, o
ther op
eratin
g inco
me other t
han royal
ty in
come a
nd other i
tems, a
nd sep
arati
on cos
ts. P
leas
e refer to t
he deta
il of
“O
ther re
conc
iling ite
ms bet
ween s
egmen
t proﬁ
t and ope
ratin
g proﬁt
” in the a
nalys
is of adj
ustin
g items (Grou
p ﬁnan
cial rev
iew
).
Depreciation and amortisation by segment
2021
£m
2020
£m
20
19
£m
Pharmaceuticals
553
5
57
606
Pharmaceuticals R&D
325
29
8
230
Pharmaceuticals, including R&D
878
855
83
6
V
accines
4
16
404
418
Consumer Healthcare
226
235
224
Segment depreciation and amortisation
1,520
1,4
94
1
,478
Corporate and other unallocated depreciation and amortisation
54
82
79
Other reconciling items between segment depreciation and amortisation and
total depreciation and amortis
ation
802
77
5
777
T
otal depreciation and amortis
ation
2,
376
2,351
2,33
4
18
2
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
6. T
urnover and segment information
continued
PP&E, int
angible asset and goodwill impairment by segment
2021
£m
2020
£m
20
19
£m
Pharmaceuticals
11
38
1
37
Pharmaceuticals R&D
54
37
16
Pharmaceuticals, including R&D
65
75
153
V
accines
20
49
33
Consumer Healthcare
12
5
–
Segment impairment
97
129
186
Corporate and other unallocated impairment
63
5
19
Other reconciling items between segment impairment and total impairment
4
16
680
621
T
otal impairment
576
814
826
PP&E and int
angible asset impairment r
eversals by segment
Pharmaceuticals
(5)
(12)
(6)
Pharmaceuticals R&D
(2)
(4)
–
Pharmaceuticals, including R&D
(7)
(16)
(6)
V
accines
(3)
(2)
(1)
Consumer Healthcare
–
–
–
Segment impairment reversals
(1
0)
(18)
(7)
Corporate and other unallocated impairment reversals
–
(1)
(3)
Other reconciling items between segment impairment reversals and tot
al impairment reversals
(38)
(53)
(15)
T
otal impairment revers
als
(48)
(72)
(25)
Net operating assets by segment
2021
£m
2020
£m
Pharmaceuticals
(1
49)
78
9
Pharmaceuticals R&D
3
,79
5
3,345
Pharmaceuticals, including R&D
3,646
4,13
4
V
accines
8,429
8,9
95
Consumer Healthcare
25,1
85
25,17
6
Segment net operating assets
3
7
,260
38,3
05
Corporate and other unallocated net operating assets
2,353
2,25
0
Net operating assets
39,61
3
40,555
Net debt
(1
9,83
8)
(20,
7
80)
Investments in associates and joint ventures
88
364
Derivative ﬁnancial instruments
(22)
(7
4)
Current and deferred tax
ation
1,47
9
6
37
Assets held for sale (excluding cash and cash equivalents)
22
10
6
Net assets
21,342
20,80
8
The Pharmaceuticals segment includes
the Shion
ogi-
ViiV Healthcare contingent
consideration
liability of £5,559 m
illion
(2020 – £5,
359 mil
lion) and the P
ﬁ
zer put o
ption of £1
,00
8 millio
n (
2020 – £96
0 millio
n
).
GS
K Ann
ual R
epor
t 2021
18
3
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
6. T
urnover and segment information
continued
Geographical information
Th
e UK is re
gard
ed as b
eing the G
roup’s coun
try o
f domic
ile.
T
urnover by loc
ation of customer
2021
£m
2020
£m
20
19
£m
UK
975
980
942
US
1
5,093
14,556
13,89
0
Rest of W
orld
1
8,04
6
18,563
18,922
External turnover
34,1
14
34,099
33,
754
Non-current assets by location of subsidiary
2021
£m
2020
(revised)
£m
UK
6,61
8
6,27
9
US
1
7
,8
52
1
7
,899
Belgium
5,065
5,43
7
Switzerland
6,
552
6,133
Rest of W
orld
1
5,39
0
16,142
Non-current assets
51,47
7
51,89
0
No
n-cur
rent a
sset
s by locat
ion excl
udes a
mounts r
elatin
g to other inve
stmen
ts, de
ferre
d ta
x ass
ets, d
eriva
tive ﬁna
ncia
l instr
uments
,
pension assets, amounts
receivable under
insurance contracts
and certain other non-current
receivables. There are no
other
cou
ntrie
s with i
ndivi
duall
y materi
al ex
ternal r
evenue or n
on-c
urren
t ass
ets.
GSK has revised th
e presentation
of its
non-current
assets by locat
ion t
o include
Belgium and
Switzerland independen
tly from
the
re
st of the wor
ld.
7
. O
ther operat
in
g income/
(
expense
)
2021
£m
2020
£m
20
19
£m
Fair value remeasurements of equity investments
37
(6)
(14)
Disposal of businesses and assets
591
2
,
779
5
41
Fair value remeasurements on contingent consideration recognised in business combinations
(1,0
58)
(1,28
6)
(92)
Remeasurement of V
iiV Healthcare put option liabilities and preferential dividends
(48)
52
234
Fair value adjustments on derivative ﬁnancial instruments
(4)
20
–
Other income
6
65
20
(4
76)
1,624
689
Di
spos
al of bus
ines
ses a
nd as
sets in 2021 incl
uded a ne
t gain on d
ispo
sal of th
e right
s to the royal
ty str
eam fo
r cabo
zanti
nib and
a net g
ain on di
spos
al of the c
epha
losp
orin an
tibiot
ic bra
nds to San
doz.
Di
spos
al of bus
ines
ses a
nd as
sets in 2020 i
nclud
ed a net pro
ﬁt on di
spos
al of the H
orli
cks an
d other C
onsum
er He
althc
are
nutr
ition
al bra
nds an
d two sub
sidi
arie
s in Ind
ia and B
anglad
esh of £
2,81
5 mi
llion
, which r
eﬂe
cted rever
sal o
f £2
40 mil
lion of
emb
edde
d deri
vative ga
ins on the v
alue of th
e shar
es take
n in prio
r year
s. Th
is was pa
rt
ly of
fset by th
e relate
d £47
6 millio
n los
s
on th
e share
s in Hin
dust
an Unil
ever Limi
ted, inc
ludin
g fair va
lue rem
easu
reme
nt loss
es bet
wee
n their ac
quisi
tion a
s cons
ider
ation
for th
e dives
tment of G
SK C
onsum
er Hea
lthc
are Li
mited in I
ndia a
nd their s
ubse
quent d
ispos
al. O
ther o
perat
ing inc
ome als
o
inc
luded a
n incr
ease i
n proﬁ
t and mil
eston
e incom
e from a nu
mber of a
sse
t dispo
sal
s.
Fair value
remeasurements on
contingent
consideration
recognised as business combinat
ions includ
ed £
1
,026
million
related
to
the ac
quis
ition o
f the form
er Shio
nogi-Vi
iV He
althc
are jo
int ventu
re and £27 mill
ion payab
le to Novar
tis r
elated to th
e V
acci
nes
acquisition, t
ogether
with fair
value
mov
ements on
relat
ed hedging
contracts.
18
4
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
8
. Operating proﬁt
The following items have been included in operating pr
oﬁt:
2021
£m
2020
£m
20
19
£m
Employee costs (Note 9)
9,003
1
0,24
9
9,855
Advertising
1,80
6
1
,
777
1,5
6
7
Distribution costs
379
408
3
93
Depreciation of property
, plant and equipment
982
989
1,01
7
Impairment of property
, plant and equipment, net of reversals
10
3
4
43
669
Depreciation of right of use assets
2
13
225
214
Impairment of right of use assets
7
3
2
Amortisation of int
angible assets
1,1
81
1,13
7
1,1
03
Impairment of intangible assets, net of revers
als
4
16
2
57
126
Impairment of property
, plant and equipment held for sale, net of revers
als
1
3
–
Impairment of intangible assets held for s
ale, net of reversals
1
20
1
Impairment of goodwill allocated to a disposal group, net of revers
als
–
16
4
Net foreign exchange (gains)/losses
(2)
1
10
(3
7)
Inventories:
Cost of inventories included in cost of sales
9,1
92
9,4
80
9,482
W
rite-down of inventories
946
699
578
Reversal of prior year write-down of inventories
(38
4)
(27
4)
(23
0)
Short-term lease charge
7
11
12
Low-value lease charge
3
5
4
V
ariable lease payments
10
11
13
Fees payable to the company’
s auditor and its associates in relation to the Group (see below)
31.
7
29.9
3
0.4
Th
e revers
als of p
rior ye
ar wri
te-dow
ns of invento
ries p
rinci
pall
y aris
e from the r
eas
ses
smen
t of usag
e or dem
and exp
ectat
ions
pri
or to inventor
y ex
pirati
on.
Net f
oreig
n exchan
ge (ga
ins
)/l
osse
s incl
ude a net g
ain of £
35 mil
lion (2020 – £3
6 millio
n loss; 201
9 – £75 mill
ion gai
n
) aris
ing
fro
m the rec
ycling of ex
chang
e on liqui
datio
n or disp
osa
l of overs
eas su
bsid
iari
es. T
he recyc
ling of exc
hang
e on disp
osal o
f
over
sea
s ass
ociate
s of a los
s of £
1
0 millio
n (
2020 – £nil) i
s repo
rted t
hrough l
oss o
n dispo
sal of i
nteres
t in as
soci
ates.
In
clude
d withi
n oper
ating pr
oﬁt ar
e Majo
r rest
ructu
ring ch
arge
s of £626 mill
ion (2020 – £
1
,
532 mill
ion; 20
1
9 – £1
,
1
05 mill
ion)
,
see Not
e 1
0, ‘Major restruct
uring
costs
’
.
Fees payable to the company’
s auditor and its associates:
2021
£m
2020
£m
20
19
£m
Audit of parent company and consolidated ﬁnancial statements including attest
ation under s.404
of Sarbanes-Oxley Act 2002
1
3.2
13.8
15.6
Audit of the company’
s subsidiaries
1
4.5
14.5
13.5
T
otal audit services
2
7.
7
28.3
29.1
Audit related and other assurance services
4.0
1.6
1.2
All other services
–
–
0.1
T
otal audit-related and non-audit services
4.0
1.6
1.3
31.
7
29.9
3
0.4
Th
e other a
ssur
ance s
er
vice
s provi
ded by the a
uditor r
elated to ag
reed up
on pro
cedu
res and o
ther a
ssur
ance s
er
vice
s outs
ide of
st
atutor
y audi
t requir
ement
s. In a
dditi
on to the ab
ove, fees p
aid to the a
uditor i
n resp
ect of th
e GSK p
ensio
n sche
mes wer
e
:
2021
£m
2020
£m
20
19
£m
Audit
0.2
0.2
0.2
Other services
–
–
–
Th
ere was n
o materi
al fee pa
id in 202
1 to othe
r auditor
s in re
spec
t of audi
ts of cer
ta
in of the c
ompa
ny’
s sub
sidia
rie
s acqui
red
dur
ing the ye
ar (
2020 – £0
.2 milli
on, 201
9 – £
0.8 mi
llion).
Audi
t fees i
nclud
e £0.9 m
illion i
n relati
on to incr
ement
al aud
it work p
er
forme
d in 202
1 for aud
it opin
ions is
sued c
ompli
ant wi
th
PCAOB aud
iting standards in
preparation
for t
he Consumer Healthcare demerger
.
Audit rela
ted and
other
assurance ser
vices include
£2.4 mil
lion due
to
reporting accountant w
ork performed in preparation
for t
he
Consumer Healthcare demerger
.
GS
K Ann
ual R
epor
t 2021
18
5
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
9. Employ
ee costs
2021
£m
2020
£m
20
19
£m
W
ages and salaries
6,941
7
,802
7
,583
Social security costs
856
917
852
Pension and other post-employment costs, including augmentations (Note 30)
4
63
519
560
Cost of share-based incentive plans
404
3
93
432
Severance and other costs from integration and restructuring activities
339
618
428
9,003
1
0,249
9,855
Th
e Group p
rovide
s ben
eﬁts to em
ployee
s, co
mmens
urate wi
th loc
al prac
tice i
n indiv
idua
l countr
ies
, inclu
ding, i
n some m
arkets
,
healthcare in
surance, su
bsidised
car schemes an
d personal
life
assurance.
Th
e cost o
f share
-ba
sed inc
enti
ve plans i
s analy
sed a
s follows:
2021
£m
2020
£m
20
19
£m
Share V
alue Plan
303
313
302
Performance Share Plan
59
64
58
Share option plans
5
4
4
Cash settled and other plans
37
12
68
404
393
432
The average monthly number of persons employed by the Group (including Directors) during the year was:
2021
Number
2020
Number
20
19
Number
Manufacturing
33,303
34,898
36,653
Selling, general and administration
46,7
82
4
9
,16
2
48
,535
Research and development
1
1
,876
11
,
8
2
4
12
,
0
2
6
91,961
95,8
84
9
7,
2
14
Th
e a
vera
ge month
ly numb
er of Gr
oup emp
loyees exc
lude
s tempor
ar
y and co
ntrac
t staf
f. The n
umber
s of Gr
oup emp
loyees at t
he
end o
f each ﬁ
nanci
al year a
re give
n in the ﬁn
ancia
l rec
ord on pa
ge 265.
Th
e comp
ensati
on of the D
irec
tors an
d senio
r manag
ement (me
mber
s of the G
L
T
) in aggr
egate, wa
s as fo
llows:
2021
£m
2020
£m
20
19
£m
W
ages and salaries
29
23
28
Social security costs
3
4
4
Pension and other post-employment costs
3
3
3
Cost of share-based incentive plans
30
25
27
65
55
62
Further information
on the
remunerat
ion of
the Directo
rs is giv
en in t
he sections
of the
annual report on rem
uneration label
led as
aud
ited wit
hin pag
es 1
20 to 1
52.
18
6
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
1
0
. Majo
r restruc
tur
ing co
st
s
Wi
thin the P
harm
aceu
tica
ls sec
tor
, the high
ly reg
ulated ma
nufac
turing o
perat
ions an
d suppl
y chai
ns and lo
ng lifec
ycle of th
e
bus
ines
s mean t
hat res
truc
turing p
rogr
amme
s, par
ti
cular
ly thos
e that invol
ve the rati
onali
satio
n or clo
sure of m
anufa
cturin
g or R&D
site
s, ar
e likely to t
ake sever
al year
s to comp
lete.
Major restructuring costs are
those rela
ted
to
speciﬁc Board-approved
Major restructuring programmes, includi
ng int
egration
costs
foll
owing ma
t
eri
al acq
uisit
ions
, which a
re str
uctur
al and a
re of a sig
niﬁc
ant sc
ale w
here th
e cost
s of indiv
idua
l or rela
ted proj
ects
exce
ed £25 mil
lion.
The existing Combined restructuring and
integrat
ion programme incorporates t
he previous
Major Change programme, the
Pharmaceutic
als
restructuring programme and t
he restructuring and i
ntegration
programme follo
wing the
Novartis transaction in
201
5. T
his pro
gram
me is now s
ubst
antial
ly com
plete. I
n July 201
8
, the B
oard ap
proved a M
ajor r
estr
uctur
ing pro
gram
me, de
signe
d
to sig
niﬁc
antly i
mprove th
e comp
etitive
nes
s and ef
ﬁc
iency of t
he Gro
up’
s cost b
ase w
ith savi
ngs de
livere
d prim
arily t
hrough s
upply
chain opti
misation and
reductions
in administ
rative
costs. This programme is
now
substantially complet
e. In February 20
1
9, t
he
Bo
ard app
roved a M
ajor re
stru
cturi
ng plan to g
ener
ate syner
gies fr
om the in
tegrati
on of the P
ﬁ
zer cons
umer h
ealth
care b
usine
ss
into GS
K’s C
onsume
r Hea
lthc
are bus
ines
s. I
n Janua
ry 2020
, the Boa
rd app
roved a t
wo-yea
r Sepa
ration P
repa
ratio
n progr
amme
to pre
pare fo
r the sep
arati
on of GS
K into two c
ompa
nies
.
Th
e t
ota
l rest
ructu
ring c
osts of £
62
6 mill
ion in 2021 were inc
urre
d in the fol
lowing a
rea
s
:
–
Res
truc
turing c
osts to p
repa
re for se
parat
ion of GS
K into t
wo comp
anies
–
Restructuring follo
wing the i
ntegration
of the
P
ﬁzer
consumer healthcare business into
GSK Consumer Healthcare
–
Co
ntinue
d impl
ement
ation of th
e res
tructu
ring pr
ogra
mme that s
tar
ted in J
uly 201
8
, to simpli
fy th
e oper
ating mo
dels a
nd impr
ove
resource allocation o
f the
Pharmaceutical and Consumer Healthcare supply ch
ains
–
Continued transforma
tion of
central function
s, including
GSK technology
platforms and i
nterfaces, to deliv
er great
er digital
synergies, simpliﬁcation of
applications
and staff reductions.
Th
e analy
sis of the c
osts c
harg
ed to oper
ating p
roﬁt un
der the
se pro
gram
mes wa
s as foll
ows:
2021
£m
2020
£m
20
19
£m
Increase in provision for Major restructuring programmes (see Note 31)
383
74
6
3
45
Amount of provision reversed unused (see Note 31)
(1
51)
(9
6)
(14
8)
Impairment losses recognised
27
361
521
Other non-cash charges
29
10
4
99
Other cash costs
33
8
4
17
288
626
1,532
1,1
05
Pr
ovisio
n rever
sals of £1
5
1 mi
llion (2020 – £96 m
illion
, 20
1
9 – £1
4
8 millio
n
) reﬂe
cted pr
ovisio
n rele
ase
s mainl
y for the S
epar
ation
Pr
epar
ation pr
ogra
mme and 201
8 Majo
r rest
ructu
ring pr
ogra
mme. A
sset i
mpair
ments o
f £2
7 milli
on and ot
her non
-ca
sh cha
rges of
£29 m
illion princi
pally comprised ﬁxed
asset write-downs of
manufacturin
g facilit
ies and accelerat
ed depreciation
where asset liv
es
have be
en shor
ten
ed in the s
upply c
hain ma
nufac
turin
g netwo
rk as a re
sult o
f the Ma
jor re
struc
turin
g progr
amme
s. Al
l other
cha
rges h
ave been or w
ill be s
ettl
ed in ca
sh and i
nclud
e site cl
osure c
osts
, cons
ulta
ncy and p
rojec
t manag
ement c
osts
.
Th
e analy
sis of M
ajor r
estr
ucturi
ng cha
rges by p
rogra
mme wa
s as foll
ows:
2021
Cash
£m
Non-cash
£m
T
otal
£m
Separation Preparation programme
37
1
59
43
0
Consumer Healthcare Joint V
enture integration programme
173
11
18
4
20
18 Major restructuring programme (including T
esaro)
18
9
27
Combined restructuring and integration programme
8
(23)
(1
5)
570
56
626
2020
Cash
£m
Non-cash
£m
T
otal
£m
Separation Preparation programme
625
216
841
Consumer Healthcare Joint V
enture integration programme
298
28
326
20
18 Major restructuring programme (including T
esaro)
10
5
2
10
315
Combined restructuring and integration programme
39
11
50
1,067
4
65
1,532
GS
K Ann
ual R
epor
t 2021
187
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
1
0. Major restructuring costs
continued
Th
e analy
sis of M
ajor r
estr
ucturi
ng cha
rges by in
come s
tateme
nt line wa
s as fol
lows:
2021
£m
2020
£m
20
19
£m
Cost of sales
15
4
6
67
658
Selling, general and administration
426
659
332
Research and development
46
20
6
114
Other operating expense
–
–
1
626
1,532
1,1
05
1
1
. Finance income
2021
£m
2020
£m
20
19
£m
Finance income arising from:
Financial assets measured at amortised cost
26
29
69
Financial assets measured at fair value through proﬁt or loss
–
10
10
Net gains arising from the forward element of forward contracts in net investment hedge relationships
–
5
19
Other ﬁnance income
2
–
–
28
44
98
1
2
. Finance e
xpense
2021
£m
2020
£m
20
19
£m
Finance expense arising on:
Financial liabilities at amortised cost
(7
44)
(813)
(832)
Derivatives at fair value through proﬁt or loss
–
(7)
(6)
Net losses arising from:
Financial instruments mandatorily measured at fair value through proﬁt or loss
(59
9)
353
(425)
Retranslation of loans
599
(357)
424
Reclassiﬁcation of hedges from other comprehensive income
(2)
(2)
(2)
Unwinding of discounts on provisions
(2)
(3)
(8)
Finance expense arising on lease liabilities
(31)
(4
0)
(3
9)
Other ﬁnance expense
(5)
(23)
(24)
(784)
(8
92)
(912)
Fi
nance e
xpens
e aris
ing on de
rivati
ves at fa
ir value th
rough p
roﬁt o
r loss r
elates to sw
ap intere
st exp
ense
.
18
8
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
1
3
. Associ
ates and joint ventures
Th
e Group’s sha
re of af
ter-
ta
x pro
ﬁts an
d loss
es of as
soc
iates an
d joint ve
ntures i
s set out b
elow:
2021
£m
2020
£m
20
19
£m
Share of after-tax proﬁts of associates
36
33
85
Share of after-tax losses of joint ventures
(3)
–
(11)
33
33
74
Fol
lowing t
he disp
osal o
f Innov
iva
, Inc in M
ay 202
1 (
see det
ails i
n Note 2
1
), at 3
1 Dec
embe
r 202
1
, th
e Grou
p held no s
igni
ﬁcan
t
indi
vidu
al as
soci
ates. At 31 Dec
embe
r 2020, the Gr
oup hel
d one sig
niﬁc
ant a
sso
ciate, I
nnoviva
, In
c.
Sum
mari
sed inc
ome st
atemen
t inform
ation in r
esp
ect of I
nnoviva u
ntil M
a
y 202
1 is se
t out bel
ow
. The G
roup’s 202
1 share o
f
af
ter-ta
x proﬁ
ts of as
soci
ates and ot
her com
preh
ensive i
ncom
e inclu
des a pr
oﬁt of £
33 mi
llion an
d other c
ompre
hens
ive inco
me of
£ni
l in res
pect o
f Innov
iva.
The results of
Innoviva
included
in the
summarised income stat
ement
informat
ion below
represent the
estimat
ed earnings o
f
In
noviva in t
he releva
nt per
iods
, bas
ed on pub
licly ava
ilabl
e infor
mation at t
he bal
ance s
heet date
. 202
1 ﬁgure
s incl
ude sha
re of
In
noviva’s turnover, pro
ﬁt and tot
al com
prehe
nsive i
ncome u
ntil the d
ate of the dis
pos
al.
2021
£m
2020
£m
20
19
£m
T
urnover
10
8
253
193
Proﬁt after tax
ation
10
6
1
74
116
T
otal comprehensive income
10
6
1
74
116
Aggr
egated ﬁ
nanc
ial inf
ormati
on in re
spec
t of GS
K’s shar
e of other a
sso
ciated un
der
tak
ings a
nd join
t venture
s is set ou
t below:
2021
£m
2020
£m
20
19
£m
Share of turnover
–
–
32
Share of after-tax losses
–
(8)
(5)
Share of other comprehensive income
28
53
1
Share of total comprehensive income/(expense)
28
45
(5)
Th
e Group’s sal
es to as
soci
ates and j
oint ventu
res wer
e £nil i
n 202
1 (
2020 – £nil; 201
9 – £1
1 mi
llion).
Pl
eas
e refer to the B
ala
nce she
et info
rmatio
n on as
soci
ates and j
oint ventu
res in N
ote 2
1
.
GS
K Ann
ual R
epor
t 2021
18
9
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
1
4. T
axation
Th
e Group’s ta
x cha
rge is th
e sum of the tot
al cur
rent an
d defer
red ta
x ex
pense
.
T
axation charge based on pr
oﬁts for the year
2021
£m
2020
£m
20
19
£m
U
K current year c
harge
13
2
30
14
9
Rest of W
orld current year c
harge
1,04
4
1
,
177
1,407
Charge/(credit) in respect of prior periods
17
2
66
(420)
Current tax
ation
1,34
8
1,273
1,136
Deferred tax
ation
(1,002)
(693)
(183)
346
580
953
In 2021
, GSK ma
de payme
nts of £1
1
4 millio
n in UK c
orpor
ation t
ax to H
MR
C. The
se amo
unts ar
e for UK c
orpo
ratio
n ta
x only, and
do not i
nclud
e the var
ious oth
er busi
nes
s ta
xes bor
ne in the U
K by GS
K each ye
ar
.
Th
e defer
red ta
x cr
edits i
n each pe
riod r
eﬂec
t the or
iginati
on of cur
rent ye
ar expe
nses w
here o
ff
set aga
inst ta
xa
ble pr
oﬁts in f
uture
periods is probable.
This relat
es primarily
to
the un
wind of
deferred tax liabilities o
n intangible
assets, the recognition
of curren
t
yea
r ta
x loss
es and t
he rever
sal of ot
her temp
orar
y di
ffe
renc
es. T
he defe
rred t
ax c
redi
t in 202
1 also r
eﬂec
ted the im
pact of t
he
reva
luatio
n of defer
red ta
x a
sset
s and lia
biliti
es foll
owing en
actme
nt of the in
crea
se in th
e headl
ine rate of U
K cor
pora
tion ta
x fr
om
1
9% to 25%.
Sig
niﬁc
ant pr
ior yea
r cred
its in 201
9 re
ﬂec
ted the im
pact of th
e set
tleme
nt of a numb
er of ope
n issu
es wit
h ta
x autho
ritie
s.
Th
e followi
ng tab
le rec
oncil
es the t
ax ch
arge c
alcu
lated at the U
K sta
tutor
y rate on th
e Group p
roﬁt b
efore t
ax w
ith the ac
tual t
ax
cha
rge for th
e year.
Reconciliation of taxation on Group proﬁts
2021
£m
2021
%
2020
£m
2020
%
20
19
£m
20
19
%
Proﬁt before tax
5,4
42
6,968
6,221
U
K statutory rate of tax
ation
1,03
4
1
9.0
1,324
19.0
1,182
19.0
Differences in overseas tax
ation rates
4
19
7.
7
552
7.
9
6
67
10
.7
Beneﬁt of intellectual property incentives
(400)
(7
.3)
(5
86)
(8.4)
(691)
(11.1)
R&D credits
(1
02)
(1.9)
(1
05)
(1.5)
(119)
(1.9)
Fair value remeasurement of non-tax
able put options
15
0.3
(3)
(0.0)
(45)
(0.
7)
T
ax losses where no beneﬁt is recognised
5
0.1
18
0.3
15
0.2
Permanent differences on disposals, acquisitions and transfers
(1
63)
(3.0)
(338)
(4.9)
68
1.1
Other permanent differences
74
1.4
98
1.4
119
1.9
Reassessments of prior year estimates
(1
72)
(3.2)
(228)
(3.3)
(36
4)
(5.9)
Changes in tax rates
(364)
(6.7)
(152)
(2.2)
121
2.0
T
ax charge/tax rate
346
6.4
580
8.3
953
15.3
As a gl
obal h
ealth
car
e compa
ny
, we have a subs
tant
ial bus
ines
s and em
ploym
ent pre
senc
e in many c
ountri
es aro
und the wor
ld.
Th
e impac
t of dif
fere
nces i
n overs
eas t
ax
ation rate
s aros
e from p
roﬁts b
eing e
arne
d in coun
trie
s with ta
x r
ates high
er than t
he UK
st
atutor
y rate, th
e most s
igniﬁ
can
t of whic
h in 202
1 were th
e US, B
elgium
, Ger
many, Ital
y and Ja
pan. T
he adve
rse im
pact wa
s
par
tl
y off
set by the b
eneﬁ
t of intell
ectua
l prop
er
ty inc
enti
ves such a
s the U
K Patent Box a
nd Bel
gian Pa
t
ent I
ncom
e Dedu
ction
reg
imes
, whic
h provi
de a redu
ced ra
te of corp
orati
on ta
x on pro
ﬁts e
arne
d from qu
alif
ying p
atents
. W
e clai
m thes
e ince
ntives i
n the
man
ner inten
ded by the r
elevan
t statuto
ry o
r regul
atory f
ramewo
rk
.
In 2021
, ‘Chan
ges in t
ax r
ates’ incl
uded c
redit
s in rela
tion to the e
nactm
ent of the i
ncre
ase in th
e head
line rate of U
K co
rpor
ation
ta
x fro
m 1
9
% to 25% (
eff
ective 2023). In 2020, ‘
Chan
ges in t
ax r
ates’ incl
uded c
redit
s in rela
tion to the U
K
, wher
e a previo
usly
pro
pose
d reduc
tion i
n the cor
porat
ion ta
x rate f
rom 1
9% to 1
7% wa
s canc
elle
d, and I
ndia
, wher
e the ta
x tre
atmen
t of divi
dends
cha
nged w
ith ef
fect f
rom 1 Ap
ril 2020. T
he UK cr
edit i
n 2020 par
tly reve
rsed t
he expe
nse in 201
9 w
here a fu
ture be
neﬁt wa
s
prov
ided at t
he form
erly en
acted c
orpo
ration t
a
x rate of 1
7%
.
Per
manen
t dif
feren
ces o
n dispo
sals
, acq
uisiti
ons an
d trans
fers i
n 202
1 reﬂe
cts ta
x cr
edits a
risin
g on the tr
ansfe
r of intell
ectua
l
pro
per
ty w
ithin th
e Group a
nd in 2020 re
ﬂecte
d the ta
x imp
act of th
e dispo
sal of H
orli
cks and o
ther C
onsum
er Hea
lthc
are br
ands
to, and s
ubse
quent di
spos
al of sh
ares r
ecei
ved in, H
indus
tan U
nilever.
Th
e Group’s 202
1 ta
x rate ha
s also b
een in
ﬂuenc
ed by the c
losur
e of ope
n issu
es wit
h ta
x author
itie
s in vari
ous jur
isdic
tions
. The
re
-ass
ess
ment of p
rior ye
ar est
imates in
clude
s both cu
rren
t and defe
rred t
ax
.
Futu
re ta
x char
ges
, and the
refor
e our ef
fect
ive ta
x rate, m
ay be af
fected by f
actor
s such a
s acqui
sitio
ns, di
spos
als
, rest
ructu
rings
,
the l
ocati
on of res
ear
ch and deve
lopme
nt acti
vit
y
, ta
x regim
e refor
ms and r
esol
ution of o
pen mat
ters a
s we cont
inue to br
ing our t
ax
af
fair
s up to date ar
ound the wo
rld.
Co
ntinue
d focus o
n ta
x refor
m is exp
ected in 2022 a
nd futur
e year
s driven b
y the OECD
’
s proj
ect to add
res
s the ta
x cha
lleng
es
arising from t
he digitalisat
ion of
the econom
y
. This
may
result in
signiﬁcant changes t
o established tax principles and an
increase in
ta
x aut
horit
y dis
putes
. In tur
n, this c
ould ad
verse
ly af
fect G
SK
’
s ef
fecti
ve ta
x rate or co
uld re
sult in hi
gher c
ash t
ax li
abili
ties
.
19
0
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
1
4. T
axation
continued
T
ax on items charged to equity and statement of comprehensive income
2021
£m
2020
£m
20
19
£m
Current tax
ation
Share-based payments
–
(14)
1
Deﬁned beneﬁt plans
–
(18)
16
Fair value movements on cash ﬂow hedges
5
12
–
Fair value movements on equity investments
36
89
–
41
69
17
Deferred tax
ation
Share-based payments
(1
1)
18
18
Deﬁned beneﬁt plans
223
(51)
173
Fair value movements on cash ﬂow hedges
3
6
16
Fair value movements on equity investments
(1
6
7)
131
(95)
48
10
4
112
T
otal credit to equity and st
atement of comprehensive income
89
173
129
All o
f the above i
tems have be
en cha
rged to th
e statem
ent of co
mpreh
ensi
ve incom
e except fo
r ta
x on sha
re-b
ase
d paymen
ts.
Issues relating to taxation
Th
e integra
ted nature o
f the Gro
up’
s world
wide o
perat
ions invol
ves si
gniﬁ
cant inve
stme
nt in res
ear
ch and st
rategic m
anuf
acture at
a limi
ted numb
er of loc
ation
s, wi
th cons
equen
tial cr
oss
-bord
er supp
ly route
s into nume
rous e
nd-ma
rkets
. In line w
ith cur
rent O
ECD
gui
deline
s, we ba
se our t
rans
fer pri
cing po
licy on t
he arm’s leng
th prin
ciple a
nd supp
or
t our tra
nsfer p
rice
s with e
cono
mic ana
lysis
and r
epor
ts
. However, dif
fere
nt ta
x autho
ritie
s may see
k to attri
bute fur
the
r proﬁ
t to activ
itie
s being u
nder
take
n in thei
r juris
dicti
on
poten
tiall
y resu
lting in d
ouble t
ax
ation
. The Gr
oup als
o has op
en item
s in sever
al juri
sdic
tions c
once
rning s
uch mat
ters a
s the
ded
uctib
ilit
y of par
tic
ular ex
pense
s and th
e ta
x treatm
ent of ce
rt
ain bu
sines
s tra
nsac
tions
. GSK a
pplie
s a risk b
ase
d appr
oach to
deter
mine th
e trans
acti
ons mos
t likely to b
e subje
ct to cha
lleng
e and the p
robab
ilit
y that the G
roup wou
ld be abl
e to obtai
n
compensatory adjustments
under in
ternat
ional tax treaties.
Th
e calc
ulatio
n of the Gr
oup’
s total t
ax c
harg
e there
fore nec
es
sari
ly involve
s a degr
ee of es
timati
on and ju
dgeme
nt in res
pec
t of
ce
rt
ain item
s whos
e ta
x treat
ment ca
nnot be ﬁ
nall
y determ
ined unt
il res
olutio
n has b
een re
ached w
ith the r
elevant t
ax a
uthor
ity o
r
,
as a
pprop
riate, t
hrough a f
ormal l
egal p
roce
ss
. At 3
1 Dece
mber 2021 the G
roup had r
ecog
nise
d provis
ions of £
858 m
illio
n in
re
spec
t of such u
ncer
ta
in ta
x pos
itions (2020 – £
856 mill
ion) pres
ented a
s curre
nt ta
x payabl
es or a
s reduc
tions i
n curr
ent ta
x
rec
overa
ble as
sets
. The ne
t incre
ase i
n reco
gnise
d provi
sions d
uring 2021 was dr
iven by th
e reas
ses
sme
nt of esti
mates an
d the
util
isati
on of prov
isio
ns for unc
er
tain t
ax p
ositi
ons foll
owing th
e set
tleme
nt of a numb
er of ope
n issu
es wit
h ta
x autho
ritie
s in vari
ous
jur
isdic
tions
. Whi
lst the ul
timate li
abili
ty for s
uch mat
ters may va
ry f
rom the a
mounts p
rovid
ed and is d
epen
dent up
on the outc
ome
of agr
eeme
nts wit
h the rel
evant ta
x auth
oriti
es, o
r litig
ation w
here ap
propr
iate, th
e Group c
ontinu
es to con
side
r that it ha
s made
app
ropr
iate provi
sion fo
r peri
ods whi
ch are o
pen an
d not yet agre
ed by the t
ax a
uthor
ities
.
A prov
isio
n for defe
rred t
ax li
abili
ties o
f £204 mill
ion as at 31 Dec
embe
r 202
1 (
2020 – £
1
50 milli
on
) has b
een mad
e in res
pect o
f
ta
xati
on that wou
ld be payab
le on the r
emit
tan
ce of pro
ﬁts by ce
rt
ain over
sea
s subs
idia
ries
. Whil
st the ag
grega
t
e amo
unt of
unr
emit
ted pro
ﬁts at the b
alan
ce she
et date was a
pprox
imately £1
5 billio
n (
2020 – £
1
7 bil
lion), the majo
rit
y of the
se unre
mitte
d
proﬁts wou
ld not
be subject
to
ta
x
(includ
ing withhold
ing tax) on repa
triation,
as UK legislation
relating
to
company
distributions
prov
ides fo
r exempti
on fro
m ta
x for mos
t overse
as pr
oﬁts
, subje
ct to ce
rt
ain exce
ptions
. Defe
rred t
a
x is not prov
ided o
n tempor
ar
y
dif
fer
ence
s of £8
3
1 milli
on (
2020 – £97
4 mi
llion) ari
sing on u
nremi
tted pr
oﬁts a
s mana
gemen
t has the a
bilit
y to con
trol any fu
ture
rever
sal a
nd doe
s not con
side
r such a reve
rsa
l to be prob
able
.
GS
K Ann
ual R
epor
t 2021
19
1
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
1
4. T
axation
continued
Movement in deferred tax assets and liabilities
Accelerated
capital
allowances
£m
Intangible
assets
£m
Contingent
consideration
£m
Intra-Group
proﬁt
£m
Pensions &
other post
employment
beneﬁts
£m
Ta
x
losses
£m
Share
option
and award
schemes
£m
Other
net
temporary
differences
£m
T
otal
£m
At 1 January 2020
(242)
(4,192)
7
57
1,120
864
9
42
81
956
286
Exchange adjustments
(9)
41
–
(29)
4
(2)
(3)
(57)
(55)
Credit/(charge) to income statement
(45)
194
86
(67)
(4
4)
120
(5)
45
4
6
93
Credit/(charge) to statement of
comprehensive income
–
–
–
–
50
–
(13)
(141)
(1
0
4)
Acquisitions / Disposals
–
(25)
–
–
–
–
–
–
(25)
R&D credits utilisation
–
–
–
–
–
–
–
(1
08)
(1
08)
At 31 December 2020
(29
6)
(3,9
82)
8
43
1,024
8
74
1,0
60
60
1,1
0
4
6
87
Exchange adjustments
17
(41)
–
6
(1
7)
(1)
–
–
(36)
Credit/(charge) to income statement
65
312
7
(31)
6
3
91
20
232
1,002
Credit/(charge) to statement of
comprehensive income
–
–
–
–
(223)
–
11
16
4
(48)
Acquisitions / Disposals
3
–
–
–
–
–
–
(4)
(1)
R&D credits utilisation
–
–
–
–
–
–
–
58
58
At 31 December 2021
(211)
(3,
711)
850
999
640
1,450
91
1,554
1,6
62
Deferred tax liabilities pro
vided in rela
tion t
o in
tangible assets predomina
tely
relat
e t
o tem
porar
y
differences arising on assets and
liabilities
acquired
as part of hist
oric busin
ess combinatio
ns.
The Group conti
nues t
o recognise def
erred tax ass
e
ts on
future obl
igations
in respect of
contingent
consideration amo
unts pa
yable
to
min
orit
y shar
ehold
ers
. The
se payme
nts are t
a
x deduc
tible at t
he point i
n time at w
hich pay
ment is m
ade.
A defe
rred t
a
x ass
et is rec
ognis
ed on in
tra-
Group p
roﬁt
s aris
ing on inte
r
-co
mpany inve
ntor
y whic
h are eli
minated w
ithin th
e
co
nsolid
ated acc
ounts
. As int
ra-
Group p
roﬁt
s are not e
liminate
d from th
e indiv
idual e
ntiti
es’ ta
x retur
ns a tempo
rar
y dif
fer
ence a
rise
s
that w
ill rever
se at the p
oint in ti
me inventor
y is s
old ex
tern
ally.
Th
e defer
red ta
x as
set re
cogn
ised o
n ta
x loss
es of £1
,450 mil
lion (2020 – £
1
,060 m
illion) rel
ates to trad
ing los
ses
. Such d
eferr
ed ta
x
assets are only
recognised where it
is probable t
hat fut
ure taxable proﬁt will be
av
ailable t
o uti
lise losses, as supported by
product
level fo
rec
asts
. Oth
er net tem
pora
ry di
ffe
renc
es inc
luded a
ccru
ed exp
ense
s for whic
h a ta
x dedu
ction i
s only avai
lable o
n a paid b
asis
.
Def
erre
d ta
x ass
ets and l
iabili
ties a
re rec
ognis
ed on th
e balan
ce she
et as fo
llows:
2021
£m
2020
£m
Deferred tax assets
5,21
8
4,28
7
Deferred tax liabilities
(3,556)
(3,6
00)
1,662
6
87
2021
2020
Unrecognised tax losses
T
ax losses
£m
Unrecognised
deferred tax
asset
£m
T
ax losses
£m
Unrecognised
deferred tax
asset
£m
T
rading losses expiring:
W
ithin 1
0 years
1,06
8
19
8
962
181
More than 1
0 years
390
62
414
51
Available indeﬁnitely
200
43
265
47
At 31 December
1,6
58
303
1,641
279
Capital losses expiring:
Available indeﬁnitely
2,35
6
5
57
2,287
419
At 31 December
2,3
56
5
57
2,287
419
Deferred tax ass
e
ts are o
nly recognised where
it is
probable tha
t future
taxable proﬁt will be a
vailable
to
utilise
losses.
19
2
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
1
5
. E
ar
nings per
share
2021
pence
2020
pence
20
19
pence
Basic earnings per share
8
7.
6
115.5
93.9
Diluted earnings per share
86.6
114.1
92.6
Ba
sic ea
rning
s per sh
are ha
s been c
alc
ulated by di
vidin
g the pro
ﬁt att
ribut
able to s
hareh
older
s by the wei
ghted aver
age numb
er of
sha
res in i
ssue d
uring t
he peri
od af
ter dedu
cting s
hare
s held by th
e ESOP T
rus
ts and T
rea
sur
y sha
res
. The tr
ustee
s have waived
the
ir right
s to divid
ends o
n the sha
res he
ld by the ES
OP T
r
usts
.
Dil
uted ea
rning
s per sh
are ha
s been c
alcu
lated af
ter adj
usting t
he weigh
ted averag
e number o
f shar
es use
d in the ba
sic c
alcul
ation
to as
sume th
e conver
sion o
f all poten
tiall
y diluti
ve shar
es. A p
otentia
lly dilu
tive sha
re form
s par
t of the e
mployee s
hare s
chem
es
where its e
xercise price is
below
the a
verage
market
price of GSK shares
during t
he period and
any
per
f
ormance conditions
at
tachi
ng to the sch
eme have be
en met at th
e bala
nce sh
eet date.
Th
e number
s of sha
res us
ed in c
alcul
ating ba
sic a
nd dilute
d earn
ings pe
r shar
e are rec
onci
led be
low
.
W
eighted average number of shares in issue
2021
millions
2020
millions
20
19
millions
Basic
5,003
4
,976
4,9
4
7
Dilution for share options and awards
62
62
69
Diluted
5,0
65
5,038
5,0
16
1
6
. Dividends
2021
2020
20
19
Paid/payable
Dividend
per share
(pence)
T
otal
dividend
£m
Paid
Dividend
per share
(pence)
T
otal
dividend
£m
Paid
Dividend
per share
(pence)
T
otal
dividend
£m
First interim
8 July 2021
19
951
9 July 2020
19
946
11 July 20
19
19
940
Second interim
7 October 2021
19
951
8 October 2020
19
946
1
0 October 20
19
19
941
Third interim
1
3 January 2022
19
9
52
14 January 2021
19
946
9 January 2020
19
9
41
Fourth interim
7 April 2022
23
1,1
52
8 April 2021
23
1,151*
9 April 2020
23
1,14
4
T
otal
80
4,006
80
3,989
80
3,966
* The estimate for the fourth interim dividend for 2020 disclosed in the 2020 annual report and accounts was £1,146 million, £5 million less than the dividend that was ultimately paid.
Und
er IF
RS, i
nterim di
vide
nds are o
nly re
cogni
sed in th
e ﬁnan
cial s
tateme
nts whe
n paid an
d not whe
n decl
ared
. GSK no
rmal
ly
pays a di
vide
nd two qu
ar
ters af
ter the q
uar
ter to whi
ch it re
lates and o
ne qua
rter a
fter i
t is dec
lared
. The 2021 ﬁnan
cial s
tateme
nts
rec
ogni
se thos
e divi
dends p
aid in 2021
, n
amel
y the thir
d and four
th in
terim di
vide
nds for 2020, a
nd the ﬁr
st and s
eco
nd interi
m
div
idend
s for 202
1
.
Th
e amount
s reco
gnise
d in eac
h year wer
e as foll
ows:
2021
£m
2020
£m
20
19
£m
Dividends to shareholders
3,9
99
3
,977
3,953
GS
K Ann
ual R
epor
t 2021
19
3
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
1
7
. Proper
t
y
, plant a
nd equipment
Land and
buildings
£m
Plant,
equipment
and vehicles
£m
Assets in
construction
£m
T
otal
£m
Cost at 1 January 2020
7
,632
12,061
1,9
06
21,599
Exchange adjustments
10
6
121
10
2
37
Additions through business combinations
–
5
–
5
Other additions
29
1
47
1,052
1,228
Capitalised borrowing costs
–
–
15
15
Disposals and write-offs
(336)
(875)
(29)
(1,24
0)
Reclassiﬁcations
189
840
(1,05
8)
(29)
T
ransfer to assets held for s
ale
(132)
(194)
(6)
(332)
Cost at 31 December 2020
7
,488
12,1
05
1,89
0
21,483
Exchange adjustments
(214)
(315)
(4
7)
(576)
Other additions
16
98
1,091
1,20
5
Capitalised borrowing costs
–
–
16
16
Disposals and write-offs
(217)
(94
0)
(17)
(1,1
7
4)
Reclassiﬁcations
202
906
(1,182)
(7
4)
T
ransfer to assets held for s
ale
(63)
(3
8)
(1)
(1
02)
Cost at 31 December 2021
7
,212
11,816
1,
75
0
2
0
,778
Depreciation at 1 January 2020
(3,216)
(7
,191)
–
(1
0,40
7)
Exchange adjustments
(49)
(77)
–
(1
26)
Charge for the year
(2
71)
(718)
–
(9
89)
Disposals and write-offs
154
716
–
870
T
ransfer to assets held for s
ale
72
13
0
–
202
Depreciation at 31 December 2020
(3,31
0)
(7
,14
0)
–
(1
0,450)
Exchange adjustments
10
0
191
–
291
Charge for the year
(26
7)
(715)
–
(982)
Disposals and write-offs
169
8
93
–
1,062
T
ransfer to assets held for s
ale
27
27
–
54
Depreciation at 31 December 2021
(3,281)
(6,
7
44)
–
(1
0,025)
Impairment at 1 January 2020
(
379
)
(445)
(20)
(84
4)
Exchange adjustments
(6)
–
1
(5)
Disposals and write-offs
190
124
16
33
0
Impairment losses
(147)
(3
03)
(27)
(477
)
Reversal of impairments
13
18
3
34
T
ransfer to assets held for s
ale
49
55
1
10
5
Impairment at 31 December 2020
(280)
(551)
(26)
(857)
Exchange adjustments
7
10
3
20
Disposals and write-offs
30
76
13
119
Impairment losses
(21)
(5
4)
(37)
(1
1
2)
Reversal of impairments
–
5
4
9
Impairment at 31 December 2021
(264)
(514)
(43)
(821)
T
otal depreciation and impairment at 31 December 2020
(3,59
0)
(7
,6
91)
(26)
(1
1,307)
T
otal depreciation and impairment at 31 December 2021
(3,5
45)
(7
,25
8)
(43)
(1
0,84
6)
Net book value at 1 January 2020
4,03
7
4,425
1,88
6
1
0,348
Net book value at 31 December 2020
3,898
4,414
1,8
64
1
0,1
76
Net book value at 31 December 2021
3,667
4,55
8
1
,
707
9,932
19
4
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
1
7
. Property
, plant and equipment
continued
Th
e weighted ave
rage in
teres
t rate for c
apita
lise
d borr
owing c
osts in t
he year wa
s 3% (2020 – 3%
). Disp
osa
ls and wr
ite-
off
s in
the ye
ar incl
uded a nu
mber of a
sse
ts with n
il net bo
ok value th
at are no l
onger i
n use in th
e busin
ess
.
Th
e impai
rment l
oss
es pri
ncipa
lly aro
se fro
m decis
ions to r
ationa
lise fa
ciliti
es and we
re ca
lculate
d base
d on fai
r value le
ss co
sts
of dis
pos
al. Th
e fair va
lue les
s cos
ts of dis
posa
l valuat
ion meth
odol
ogy use
s sign
iﬁc
ant inp
uts whi
ch are n
ot base
d on obs
er
vable
mar
ket data
, and t
heref
ore this va
luati
on techni
que is c
las
siﬁe
d as leve
l 3 of the fai
r value hi
erar
chy
. The
se ca
lcula
tions de
termin
e
the ne
t pres
ent valu
e of the pr
ojecte
d risk-adj
usted, p
ost-ta
x ca
sh ﬂows of t
he relev
ant as
set or c
ash ge
nerat
ing unit
, appl
ying a
dis
count r
ate of the G
roup po
st-
ta
x weig
hted averag
e cos
t of cap
ital (
W
ACC) of 6.
5%, ad
justed w
here a
pprop
riate for s
peci
ﬁc
seg
ment
, countr
y an
d curr
ency ri
sk.
As
sets th
at conti
nue to be us
ed by the G
roup ar
e gener
ally a
sse
sse
d as par
t of th
eir as
soc
iated ca
sh gen
erati
ng unit on a va
lue
in us
e bas
is. Fo
r value in u
se ca
lculat
ions
, the pos
t
-ta
x ca
sh ﬂows do n
ot incl
ude the im
pact o
f future u
ncomm
itte
d rest
ructu
ring
pla
ns or imp
roveme
nts. W
here an i
mpai
rment i
s indic
ated and a p
re-ta
x c
ash ﬂow c
alcu
lation i
s expe
cted to give a m
ateria
lly
dif
fer
ent re
sult, t
he test wou
ld be rep
er
form
ed usin
g pre-t
ax c
ash ﬂ
ows and a pr
e-ta
x dis
count r
ate. The G
roup WACC is
equ
ivale
nt to a pre-t
ax di
scou
nt rate of ap
proxim
ately 8%
.
Th
e net impa
irme
nt los
ses have b
een cha
rged to c
ost of s
ales: £
46 mil
lion (2020 – £3
98 milli
on
), R&D: £
3 milli
on
(2020 – £3 mi
llion) and SG
&A
: £54 m
illion (2020 – £
4
2 milli
on
), and in
clude
d £20 milli
on (2020 – £34
3 milli
on
) ari
sing fr
om
the Major restructuring programmes.
Rever
sal
s of impa
irme
nt aros
e from su
bseq
uent rev
iews of the i
mpai
red as
sets w
here th
e cond
itions w
hich g
ave rise to the o
rigi
nal
imp
airm
ents wer
e deeme
d no long
er to appl
y
. All of t
he rever
sals h
ave been c
redite
d to cost of s
ale
s.
Dur
ing 2021
, £7
4 m
illion (2020 – £29 mi
llion) of co
mputer s
oft
ware wa
s rec
las
siﬁe
d from a
sse
ts in con
struc
tion to in
tangi
ble
as
sets o
n beco
ming re
ady for u
se.
We have ass
ess
ed the qu
alit
ative and q
uanti
tative i
mpact o
f climate r
elated r
isks on a
sse
t recove
rabl
e amoun
ts and co
nclud
ed that
their impact does n
ot cause mat
erial impairments.
1
8
. Right
of use assets
Land and
buildings
£m
Plant and
equipment
£m
V
ehicles
£m
T
otal
£m
Net book value at 1 January 2020
821
22
123
966
Exchange adjustments
(11)
1
1
(9)
Additions
119
2
66
187
Depreciation
(152)
(5)
(6
8)
(225)
Disposals
(73)
(2)
(9)
(84)
Impairments
(3)
–
–
(3)
Reclassiﬁcations
(2)
–
–
(2)
Net book value at 31 December 2020
699
18
113
830
Exchange adjustments
(9)
(1)
(5)
(1
5)
Additions
152
1
62
2
15
Depreciation
(149)
(5)
(5
9)
(21
3)
Disposals
(53)
(4)
(13)
(70)
Impairments
(7)
–
–
(7)
Net book value at 31 December 2021
633
9
98
74
0
Th
e t
ota
l cas
h out
ﬂow for le
ase
s amou
nted to £2
1
5 millio
n. The G
roup ha
s enter
ed into le
ase c
ontra
cts that h
a
ve not yet
co
mmenc
ed. T
he nomin
al valu
e of esti
mated fu
ture le
ase pay
ments un
der the
se le
ase c
ontrac
ts app
roximate
s £60 mi
llion a
s of
3
1 De
cemb
er 202
1
. T
hes
e contr
acts ma
inly c
once
rn the re
loca
tion of th
e US Co
rpor
ate head
quar
ters
, with a l
eas
e peri
od
bet
ween 2022 a
nd 2029.
An a
nalys
is of le
ase li
abili
ties is s
et out in N
ote 29, ‘N
et debt
’
.
GS
K Ann
ual R
epor
t 2021
19
5
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
2021
£m
2020
£m
Cost at 1 January
1
0,59
7
1
0,562
Exchange adjustments
(55)
(5
4)
Additions through business combinations (Note 40)
–
124
Other movements
10
–
T
ransfer to assets held for s
ale
–
(35)
Cost at 31 December
1
0,552
1
0,5
9
7
Net book value at 1 January
1
0,59
7
1
0,562
Net book value at 31 December
1
0,552
1
0,597
Th
e £
1
0 m
illion i
ncre
ase in g
oodw
ill cor
res
ponds to a
n immater
ial pay
ment of p
ensio
n liabi
litie
s to the Co
nsume
r Hea
lthca
re
sub
-grou
p as re
quired i
n the sa
le and pu
rcha
se agre
emen
t and the in
crea
se in th
e non-c
ontro
lling in
teres
t in the sub
-gro
up as
result of t
he transaction.
Go
odwi
ll is allo
cated to th
e Grou
p
’s segme
nts as fo
llows:
2021
£m
2020
£m
Pharmaceuticals
4,228
4,245
V
accines
1,264
1,295
Consumer Healthcare
5,0
60
5,057
Net book value at 31 December
1
0,552
1
0,5
9
7
Th
e recove
rabl
e amount
s of the ca
sh ge
nerati
ng units a
re as
ses
sed us
ing a fai
r value le
ss c
osts of d
ispos
al mo
del. Fa
ir valu
e less
co
sts of di
spos
al is ca
lcul
ated usin
g a disc
ounted c
ash ﬂo
w appro
ach, w
ith a pos
t
-ta
x disc
ount r
ate appli
ed to the pro
jecte
d
risk
-a
djust
ed post
-
tax cash ﬂows an
d t
erminal
value
.
Th
e disco
unt rate us
ed is ba
sed o
n the Gro
up W
ACC of 6.
5% (2020 – 7%
)
, as m
ost ca
sh ge
nerati
ng units h
ave integr
ated
ope
ratio
ns acro
ss lar
ge par
ts of t
he Grou
p. The di
scou
nt rate is ad
justed w
here a
pprop
riate for s
peci
ﬁc se
gment
, coun
try a
nd
currency risks. The v
aluation
methodology
uses signiﬁcant inputs
which are n
ot based on
obser
v
able marke
t data, therefore
this
valu
ation tec
hniqu
e is cla
ssi
ﬁed a
s level 3 in th
e fair va
lue hier
arc
hy
.
Det
ails r
elatin
g t
o the di
scou
nted ca
sh ﬂow mo
dels u
sed in th
e impai
rment te
sts of th
e Phar
mace
utic
als
, V
accin
es and C
onsu
mer
He
althc
are c
ash g
enera
ting uni
ts are a
s follows:
V
aluation basis
Fair value less costs of dispos
al
Key assumptions
Sales growth rates
Profit margins
T
erminal growth rate
Discount rate
T
axation rate
Determination of assumptions
Growth rates are internal forecasts based on both internal and external market information.
Margins reflect past experience, adjusted for expected changes.
T
erminal growth rates based on management’
s estimate of future long-term average growth rates.
Discount rates based on Group W
ACC, adjusted where appropriate.
T
axation rates based on appropriate rates for each jurisdiction.
Period of specific projected cash flows
Five years
T
erminal growth rate and discount rate
T
erminal growth rate
Discount rate
Pharmaceuticals
0%
p.a. (2020 – 1% p.a)
7% (2020 – 7
.5% p.
a)
V
accines
0% p.a. (2020 – 1% p.a)
7% (2020 – 7
.5% p.
a)
Consumer Healthcare
2.
5% p.
a. (2020 – 2% p
.a)
6% (2020 – 6
% p.a)
Th
e t
er
minal gr
owt
h rates do n
ot excee
d the lon
g-term pr
ojecte
d grow
th rates f
or the re
levant ma
rkets
, reﬂe
ct the im
pact of f
uture
gen
eric c
ompet
ition a
nd take ac
coun
t of new pro
duct la
unche
s. G
oodw
ill is mo
nitore
d for impa
irme
nt at the se
gment
al level
. In
each case the v
aluations
indicat
ed sufﬁcient headroom such tha
t a
reasonably possible change t
o k
ey assumption
s is un
likely
to
re
sult in a
n impai
rment o
f the rel
ated goo
dwill
. The C
onsum
er He
althc
are c
ash ge
nerat
ing unit a
lso co
mpri
ses a co
llec
tion of
sma
ller c
ash g
enera
ting uni
ts inclu
ding br
ands w
ith ind
eﬁnite l
ives wi
th a car
ry
ing valu
e of £
1
8.4 bi
llion (2020 – £1
8
.4 bill
ion
).
Det
ails of i
ndeﬁ
nite life b
rand
s are give
n in Note 20, ‘
Othe
r intan
gible a
sse
ts’
.
We have ass
ess
ed the qu
alit
ative and q
uanti
tative i
mpact o
f climate r
elated r
isks on a
sse
t recove
rabl
e amoun
ts and co
nclud
ed that
their impact does n
ot cause mat
erial impairments.
1
9. G
oodwill
19
6
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
20. O
ther intangible asse
ts
Computer
software
£m
Licences,
patents,
amortised
brands etc.
£m
Indeﬁnite life
brands
£m
T
otal
£m
Cost at 1 January 2020
2,397
19,
716
19,89
4
42,007
Exchange adjustments
(1)
(7)
(7
4)
(82)
Capitalised development costs
–
313
–
3
13
Additions through business combinations
2
–
–
2
Other additions
240
494
–
73
4
Disposals and asset write-offs
(260)
(20)
–
(280)
T
ransfer to assets held for s
ale
(4)
(24
6)
(635)
(88
5)
Reclassiﬁcations
29
572
(
572
)
29
Cost at 31 December 2020
2,403
20,822
18,613
41,83
8
Exchange adjustments
(15)
(207)
65
(15
7)
Capitalised development costs
–
346
–
346
Other additions
184
1,41
0
–
1,59
4
Disposals and asset write-offs
(221)
(935)
–
(1,156)
T
ransfer to assets held for s
ale
(1)
(6)
(43)
(50)
Reclassiﬁcations
74
9
(9)
74
Cost at 31 December 2021
2,424
21,43
9
18,626
42,489
Amortisation at 1 January 2020
(1,302)
(7
,114)
–
(8,41
6)
Exchange adjustments
(3)
28
–
25
Charge for the year
(241)
(8
96)
–
(1,1
3
7)
Disposals and asset write-offs
221
8
–
229
T
ransfer to assets held for s
ale
3
42
–
45
Amortisation at 31 December 2020
(1,322)
(7
,932)
–
(9,254)
Exchange adjustments
13
52
–
65
Charge for the year
(225)
(956)
–
(1,181)
Disposals and asset write-offs
165
572
–
73
7
T
ransfer to assets held for s
ale
–
2
–
2
Amortisation at 31 December 2021
(1,36
9)
(8,262)
–
(9,631)
Impairment at 1 January 2020
(3
7)
(2,325)
(27
4)
(2,636)
Exchange adjustments
–
39
1
40
Impairment losses
(29)
(255)
(11)
(29
5)
Reversal of impairments
–
38
–
38
Disposals and asset write-offs
38
–
–
38
T
ransfer to assets held for s
ale
–
55
–
55
Reclassiﬁcation
–
(3
9)
39
–
Impairment at 31 December 2020
(28)
(2,487)
(245)
(2,
760)
Exchange adjustments
–
5
–
5
Impairment losses
(93)
(3
62)
–
(45
5)
Reversal of impairments
–
2
37
39
Disposals and asset write-offs
30
3
62
–
3
92
Impairment at 31 December 2021
(91)
(2,48
0)
(208)
(2,7
7
9)
T
otal amortis
ation and impairment at 31 December 2020
(1,350)
(1
0,419)
(245)
(1
2,014)
T
otal amortis
ation and impairment at 31 December 2021
(1,460)
(1
0,
7
42)
(20
8)
(1
2,41
0)
Net book value at 1 January 2020
1,058
1
0,27
7
19,620
30
,955
Net book value at 31 December 2020
1,053
1
0,4
03
18,3
68
29,824
Net book value at 31 December 2021
964
1
0,697
18,418
3
0,0
79
Th
e weighted ave
rage in
teres
t rate for c
apita
lise
d borr
owing c
osts in t
he year wa
s 3% (2020 – 3%
).
Th
e net boo
k value of c
ompute
r sof
twar
e inclu
ded £
52
6 mill
ion (2020 – £6
1
2 mi
llion) of inter
nall
y gener
ated co
sts.
Th
e carr
yi
ng value at 31 Dec
emb
er 202
1 of inta
ngibl
e ass
ets, fo
r whic
h impai
rment
s have been c
harg
ed in the ye
ar foll
owing th
ose
imp
airm
ents, w
as £69
4 millio
n (
2020 – £67 milli
on
). The c
arr
yin
g value at 31 Dec
embe
r 202
1 of intan
gible a
sse
ts, for w
hich
imp
airm
ent rever
sal
s have been c
harg
ed in the ye
ar foll
owing tho
se imp
airm
ent rever
sal
s, was £1
04 mill
ion (2020 – £205 mil
lion).
Th
e patent exp
ir
y dates of th
e Group’s mos
t signi
ﬁca
nt as
sets
, wher
e relevan
t, are s
et out on p
ages 272 and 273. Pl
eas
e refer to
Note 2 to th
e Group’s acc
ountin
g polic
y and es
timate of th
e usef
ul life for i
ntang
ible a
sset
s over the excl
usiv
ity a
nd non-
exclus
ivit
y
periods.
GS
K Ann
ual R
epor
t 2021
197
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Am
ort
isati
on and im
pair
ment lo
sse
s, net of r
evers
als
, have been c
harg
ed in the i
ncome s
tateme
nt as fol
lows:
Amortisation
Net impairment losses
2021
£m
2020
£m
2021
£m
2020
£m
Cost of sales
8
07
779
(32)
21
Selling, general and administration
16
3
1
67
65
17
Research and development
2
12
191
3
82
219
1,1
82
1,13
7
4
15
2
57
Lic
enc
es, p
atents, a
mor
tise
d bra
nds etc. i
nclud
es a lar
ge numbe
r of acq
uired li
cenc
es
, patents
, know
-how agr
eemen
ts and
mar
keting r
ights
, whic
h are eit
her ma
rketed or in u
se, or s
till in d
evelopm
ent. N
ote 40, ‘
Acqui
sitio
ns and di
spos
als’ give
s deta
ils
of ad
dition
s throug
h busi
ness c
ombi
nations i
n the yea
r
. T
he bo
ok value
s of the la
rges
t indiv
idua
l items ar
e as foll
ows:
2021
£m
2020
£m
T
esaro Assets
2
,677
2,66
9
Meningitis portfolio
1,88
9
2,114
Dolutegravir
1,093
1
,177
Benlysta
644
74
5
Alector Assets
509
–
iT
eos Assets
444
–
Lamisil
259
27
5
Merck Assets
–
264
V
ir Assets
2
12
49
B
MS Assets
2
19
23
9
Fluarix/
FluLaval
18
0
219
Okairos
19
1
205
CureV
ac Assets
16
4
10
8
Stiefel trade name
15
1
180
Others
2,06
5
2,15
9
1
0,69
7
1
0,403
On 2 J
uly 202
1 GS
K signe
d an agre
emen
t for a glob
al co-
develo
pment a
nd co-
comm
erci
alis
ation c
ollab
orati
on in
imm
uno-n
eurol
ogy wi
th Alec
tor for t
wo clini
cal st
age ﬁr
st-in-
clas
s mono
clon
al antib
odie
s for neur
odeg
ener
ative dis
eas
es.
Fro
m the total u
pfron
t payment r
eco
gnise
d as an in
tangi
ble as
set of £
509 m
illion
, a total of £
36
3 millio
n was pai
d in 202
1 and a
tota
l of £
1
46 mi
llion w
ill be pa
id in 2022.
On 1
4 June 2021 GSK s
igned a c
o-d
evelopm
ent and c
o-c
ommer
cial
isati
on coll
abor
ation w
ith iT
eos T
hera
peuti
cs for EOS
-44
8,
an an
ti-
T
IG
IT mo
nocl
onal an
tibod
y
, reco
gnisi
ng an int
angib
le as
set of £
444 m
illion
.
T
e
sar
o ass
ets co
mpris
e
Zejula
and
Jempe
rli
, as wel
l as co
mbinati
on ther
apie
s. T
he meni
ngitis p
or
tfol
io incl
udes
Me
nveo
,
Bexsero
,
Me
n ABCW
Y a
nd
Menjugate
.
Lamisil
has b
een move
d into lice
nce
s, patent
s, am
ort
ised b
rand
s etc. foll
owing the d
ecis
ion to st
ar
t
amo
rti
satio
n duri
ng 2020. GS
K dives
t
ed th
e Brea
the Rig
ht bran
d in 2020.
Indeﬁnite lif
e brands comprise a
port
f
olio of
Consumer Healthcare products primarily
acquired wit
h the
acquisitions
of St
erling
Win
throp, I
nc. in 1
994
, Bloc
k Drug C
omp
any
, Inc
. in 2001
, the Novar
ti
s consu
mer he
althc
are bu
sine
ss in 201
5 a
nd the P
ﬁze
r
co
nsume
r healt
hcar
e busi
ness i
n 20
1
9. T
he boo
k value
s of the maj
or bra
nds are a
s follo
ws:
2021
£m
2020
£m
Advil
3,362
3,34
9
V
oltaren
2,
725
2,
725
Centrum
1,828
1,824
Caltrate
1
,731
1
,678
Otrivin
1,38
5
1,3
85
Preparation H
1,1
52
1,13
9
Robitussin
1,1
26
1,111
Nexium
670
668
Fenistil
598
598
Chapstick
521
512
Emergen-
C
439
433
Theraﬂu
436
433
Panadol
395
396
Sensodyne
270
2
70
Others
1
,78
0
1,847
1
8,41
8
18,36
8
20. Other intangible assets
continued
19
8
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Ea
ch of the
se bra
nds is c
onsi
dered to h
ave an inde
ﬁnite li
fe, give
n the stre
ngth an
d dura
bilit
y of the br
and an
d the level o
f
mar
keting s
uppor
t. T
he bra
nds ar
e in rela
tively s
imila
r stab
le and pr
oﬁt
able ma
rket se
ctors
, with s
imila
r risk p
roﬁl
es, an
d their
size
, diver
siﬁ
catio
n and ma
rket sha
res me
an that th
e risk o
f market-r
elated fa
ctors c
ausi
ng a redu
ction i
n the live
s of the br
ands
is c
onsid
ered to be r
elati
vely low. The G
roup is n
ot aware of a
ny materi
al lega
l, reg
ulator
y
, co
ntract
ual, c
ompet
itive, e
cono
mic or
othe
r factor
s whic
h coul
d limit th
eir use
ful live
s. Ac
cord
ingly, they ar
e not amo
rti
sed.
Ea
ch bra
nd is tes
ted annu
ally for i
mpai
rment a
nd other a
mor
tise
d inta
ngible a
ss
ets are te
sted wh
en indic
ators o
f impai
rmen
t aris
e.
Thi
s testi
ng appli
es a fai
r value l
ess c
osts of d
ispo
sal met
hodol
ogy, gener
ally u
sing 1
0-
year po
st-ta
x cas
h ﬂow fore
cas
ts wit
h a
term
inal va
lue ca
lculati
on and a di
scou
nt rate equ
al to the G
roup po
st-ta
x W
AC
C of 6.
5% (
2020 – 7%
), adjus
ted whe
re
app
ropr
iate for sp
eciﬁ
c segm
ent, c
ountr
y and c
urren
cy ris
ks. T
his valu
ation me
thodo
logy us
es sig
niﬁc
ant in
puts wh
ich ar
e not
ba
sed on o
bser
vab
le mar
ket data
, and th
erefo
re this va
luatio
n techni
que is cl
ass
iﬁe
d as level 3 o
f the fair v
alue hi
erar
chy
. The m
ain
assumptions include
future
sales price and v
olume gro
wth, product contribution,
the fut
ure e
xpenditure requ
ired t
o maintain
the
product’s
marketability and
registration
in the
relev
ant ju
risdictions and
exchange
rates. These assumptions
are based on
past
exp
erie
nce and a
re revi
ewed as p
ar
t of mana
gemen
t’s budge
ting and s
trategi
c plan
ning cycl
e for cha
nges i
n market c
ondit
ions
and s
ale
s erosi
on thro
ugh co
mpetit
ion. T
he termi
nal grow
th r
ates app
lied of b
etwe
en -3% a
nd 3% are m
anage
ment
’
s est
imates
of fu
ture lon
g-term aver
age grow
th r
ates of the r
elevant m
arkets
.
Dur
ing the ye
ar end
ed 3
1 Dec
embe
r 202
1
, Ro
bitus
sin an
d Prep
arati
on H were af
fec
ted by lower c
old an
d ﬂu inci
denc
e resu
lting
fro
m the COV
ID
-
1
9 soci
al dist
anci
ng mea
sure
s and by sup
ply ch
ain is
sues r
espe
ctive
ly whic
h has re
sulte
d in a redu
ced leve
l of
headroom. The Group
has performed a sensitivity analysis based on ch
anges in k
ey
assumptions considered t
o be
reasonably
pos
sib
le by mana
gemen
t leavin
g all othe
r ass
umptio
ns unch
anged
. Sens
itivi
ty an
alysi
s for the ye
ar end
ed 3
1 Dec
embe
r 202
1 has
ide
ntiﬁ
ed thes
e two b
rands a
s bei
ng sens
itive to re
aso
nably p
ossi
ble ch
anges i
n key ass
umptio
ns. I
n orde
r for the re
covera
ble
amo
unt to be eq
ual to the c
arr
yin
g values o
f Robitu
ssi
n and Pr
epar
ation H
, eithe
r the dis
count r
ate would have to be i
ncre
ase
d by
0.
5% and 0.
1
%
, or the op
erati
ng marg
in dec
reas
ed by 4.
1
% an
d 1
.
5%, o
r the long te
rm grow
th ra
te decre
ase
d by 0.
7% and 0
.2%
respectively
. The
group consider
that
changes in k
ey
assumptions of
this
magnitude
are reasonably possible in
the curren
t
environm
ent.
Ot
her tha
n as des
crib
ed above
, the gro
up do not c
onsid
er that any r
eas
onabl
y pos
sible c
hange
s in the key a
ssum
ptions wo
uld
ca
use the f
air valu
e les
s cost o
f sale o
f the bra
nds dis
clos
ed in pag
e 1
97 above to f
all bel
ow their c
arr
yin
g value
s.
We have ass
ess
ed the qu
alit
ative and q
uanti
tative i
mpact o
f climate r
elated r
isks on a
sse
t recove
rabl
e amoun
ts and co
nclud
ed that
their impact does n
ot cause mat
erial impairments.
2
1
. Inv
estment
s in ass
ociates and join
t ven
tures
Joint
ventures
£m
Associates
£m
2021
T
otal
£m
Joint
ventures
£m
Associates
£m
2020
T
otal
£m
At 1 January
15
349
364
15
299
314
Exchange adjustments
–
(15)
(1
5)
–
(9)
(9)
Additions
–
1
1
–
4
4
Disposals
–
(27
8)
(
278)
–
–
–
Distributions received
–
(9)
(9)
–
(31)
(31)
Net fair value movements through Other comprehensive income
–
28
28
–
53
53
Impairment of interest in associates
–
(36)
(3
6)
–
–
–
Proﬁt/(loss) after tax recognised in the consolidated income st
atement
(3)
36
33
–
33
33
At 31 December
12
76
88
15
349
364
Th
e Group h
eld one s
igni
ﬁca
nt ass
ociate at 31 Dec
embe
r 2020, Inn
oviva
, Inc
. At 3
1 Dece
mber 2020, t
he Gro
up owned 32 m
illion
sha
res or 31
.6% of In
noviva
, whi
ch is a bio
phar
mace
utica
l comp
any lis
t
ed on N
ASDAQ
. Innov
iva par
tn
ered wi
th GS
K in the
devel
opmen
t of the lon
g-act
ing bet
a agoni
st, vi
lantero
l, and c
urren
tly rec
eive
s royalt
y inco
me fro
m sale
s of prod
ucts th
at cont
ain
this component,
namely
Relvar
/Breo Ellipta
and
Anoro Ellipta
. It als
o has a 1
5% ec
onomi
c intere
st in roya
lties p
aid by GS
K on
sa
les of
T
relegy Ellipta
. Th
e remai
ning 85
% of the ec
onomi
c intere
st in the
se roya
lties i
s held by T
herava
nce Bi
ophar
ma In
c., in
whi
ch the G
roup ho
lds an inve
stme
nt (
see No
te 2
2).
On 20 M
ay 202
1
, t
he Grou
p agree
d with I
nnovi
va Inc to se
ll all of it
s shar
es in In
noviva b
ack to Inn
oviva for £
2
7
7 mill
ion. Fo
llowi
ng
set
tlem
ent of the t
rans
actio
n, GS
K no long
er hel
d any Innov
iva stoc
k. A lo
ss of £
46 mill
ion (inc
ludin
g £
1
0 mi
llion o
f recycl
ing of
exch
ange di
ffe
renc
es in In
noviva) i
s pres
ented in “
Los
s on dis
posa
l of inter
est in a
sso
ciates” in t
he Co
nsolid
ated inc
ome st
atement
.
Th
e trans
acti
on did not i
nclud
e any chan
ges in I
nnovi
va
’s comme
rcia
l intere
st in roya
lties p
aid by GS
K
. “Lo
ss on di
spos
al of in
t
ere
st
in a
ssoc
iates” al
so incl
udes a £1
0 millio
n gain f
rom a dis
posa
l of anot
her imm
ateria
l ass
ociate. P
lea
se ref
er to the In
come s
tateme
nt
info
rmati
on on as
soci
ates and j
oint vent
ures in N
ote 1
3
.
20. Other intangible assets
continued
GS
K Ann
ual R
epor
t 2021
19
9
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Di
spos
als inc
lude th
e book va
lues of I
nnovi
va at £27
7 milli
on, and £1 mil
lion of a
nother i
nvestme
nt for wh
ich GS
K rec
eived
non-cash consideration.
Sum
mari
sed ba
lanc
e sheet i
nform
ation at 31 Dec
ember 2020
, in res
pect o
f Innovi
va is set o
ut below
:
At 31 December
2020
£m
Non-current assets
482
Current assets
251
Current liabilities
(4)
Non-current liabilities
(283)
Net assets
446
Th
e carr
yi
ng value o
f the Gro
up’
s invest
ment in I
nnovi
va in 2020 is ana
lyse
d as foll
ows:
2020
£m
Interest in net assets of associate
141
Goodwill
85
Fair value and other adjustments
65
Carrying value at 31 December
291
Th
e investm
ent in I
nnoviva h
ad a mar
ket value of £
29
1 millio
n at 3
1 Dec
ember 2020
.
22
. Ot
her i
n
v
est
ments
Investments
designated as
measured at
FVT
OCI
£m
Investments
measured at
FVTP
L
£m
2021
£m
Investments
designated as
measured at
FVT
OCI
£m
Investments
measured at
FVTP
L
£m
2020
£m
At 1 January
2,93
9
121
3,060
1,
781
56
1,837
Additions
125
52
17
7
409
3,205
3,614
Net fair value movements through Other comprehensive income
(8
9
7)
–
(89
7)
1,318
–
1,318
Net fair value movements through proﬁt or loss
–
37
37
–
(43
8)
(43
8)
Disposals and settlements
(240)
(11)
(251)
(56
9)
(2,
7
02)
(3,271)
At 31 December
1,927
19
9
2,1
26
2,93
9
121
3,0
60
Ot
her inves
tment
s comp
rise no
n-cur
rent e
quit
y invest
ments w
hich ar
e reco
rded at f
air valu
e at each b
alan
ce she
et date. F
or
inves
tment
s trade
d in an ac
tive mar
ket, the f
air valu
e is deter
mine
d by refere
nce to the r
elevan
t stock exc
hange q
uoted bid p
ric
e.
For o
ther inve
stmen
ts, the f
air valu
e is es
timated by m
anage
ment wi
th refer
ence to r
elevant ava
ilabl
e infor
mation
, inclu
ding the
cur
rent ma
rket val
ue of simi
lar ins
trum
ents, r
ecen
t ﬁnanc
ing rou
nds and d
isco
unted ca
sh ﬂow
s of the und
erly
ing net a
sset
s. Net
fai
r value move
ments i
nclud
e the imp
act of exch
ange (
gain
s of £20 milli
on thro
ugh Ot
her com
preh
ensive i
ncom
e and £2 mi
llion
thro
ugh pro
ﬁt or lo
ss
) (2020 – loss
es of £
9
1 millio
n and £ni
l resp
ecti
vely). Other i
nvestm
ents inc
lude li
sted inve
stmen
ts of
£1
,736 milli
on (2020 – £2,281 millio
n
).
GS
K has e
lected to d
esig
nate the ma
jorit
y of its e
quit
y invest
ments a
s mea
sure
d at fair va
lue thro
ugh Oth
er com
prehe
nsive i
ncom
e
(F
V
TOCI
). The mo
st sign
iﬁc
ant of th
ese inve
stmen
ts held at 31 Dec
embe
r 202
1 were in C
ure
V
ac AG in wh
ich the G
roup he
ld 8%
and V
ir Bio
techno
logy in w
hich th
e Grou
p held 6
.5%
. Thes
e invest
ments ha
d a fair va
lue at 3
1 Dec
embe
r 202
1 of £3
80 mil
lion
(2020 - £887 mi
llion) and £266 m
illion (2020 – £1
3
0 millio
n
) resp
ecti
vely. The oth
er invest
ments i
nclud
e equit
y sta
kes in
companies with which
GSK has research collaborations
and in companies
which pro
vide access to
biotechnol
ogy dev
elopments
of pote
ntial i
nteres
t. In J
une 2020, GS
K iss
ued US
$ US note
s whic
h are exch
ange
able at th
e option o
f the note ho
lder
s at any time
unti
l maturi
ty of th
e notes in J
une 2023 for sh
ares h
eld by GS
K in The
ravanc
e Biop
harm
a, I
nc. If t
he notes a
re excha
nged
, GSK
exp
ects to de
liver th
e shar
es but may, at its o
ption un
der ce
rt
ain cir
cumst
anc
es, d
eliver c
ash o
r a comb
inatio
n of Ther
avance
Bi
ophar
ma sha
res an
d cas
h. The T
her
a
vanc
e Biop
harm
a shar
es are m
eas
ured at F
V
TOC
I and had a f
air val
ue at 3
1 Dec
embe
r
202
1 of £79 milli
on (
2020 – £1
26 milli
on
).
On di
spos
al of eq
uit
y investm
ents me
asur
ed at F
V
TOCI
, the ac
cumul
ated fai
r value move
ments a
re rec
las
siﬁe
d from th
e fair va
lue
re
ser
ve to reta
ined e
arnin
gs. I
nvestm
ents wi
th a fair va
lue of £240 mill
ion (2020 – £569 m
illion) were d
ispo
sed of du
ring the ye
ar
.
Th
e cumulat
ive gai
n on thes
e invest
ments af
ter ta
x wa
s £
1
32 m
illion (2020 – £1
63 m
illio
n
).
Ce
rt
ain oth
er inves
tments
, such a
s inves
tments i
n funds w
ith lim
ited live
s and inve
stmen
ts acqu
ired wi
th an inte
ntion to se
ll, are
me
asur
ed at fair va
lue thr
ough pr
oﬁt or l
oss (F
V
TP
L). Addi
tions a
nd disp
osa
ls of inves
tments m
eas
ured at F
V
TP
L in 2020 inc
lude
d
the ac
quis
ition o
f share
s in Hin
dust
an Unil
ever Limi
ted on the m
erger o
f GSK
’
s Ind
ian lis
ted Co
nsume
r Hea
lthca
re enti
ty wi
th
Hin
dust
an Unil
ever and th
e subse
quent d
ivest
ment of th
ose sh
ares
.
21. Investments in associates and joint ventures
continued
20
0
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
23
. Ot
her non-
current asset
s
2021
£m
2020
£m
Amounts receivable under insurance contracts
849
75
6
Pension sc
hemes in surplus
74
1
183
Other receivables
86
10
2
1,6
76
1,0
41
Am
ounts re
ceiv
able un
der ins
uranc
e cont
acts a
re held a
t cas
h surre
nder va
lue wit
h movemen
ts throu
gh proﬁ
t or los
s.
Wi
thin the ot
her rec
eiva
bles of £
86 mi
llion (2020 – £1
02 mi
llion), £4
4 millio
n (
2020 – £67 milli
on
) is cla
ssi
ﬁed a
s ﬁna
ncial a
sse
ts
of wh
ich £23 mil
lion (2020 – £3
0 milli
on
) is cla
ssi
ﬁed a
s fair va
lue thr
ough pro
ﬁt or lo
ss
. On the re
maini
ng bal
ance of £
2
1 millio
n
(2020 – £37 milli
on
), the exp
ected c
redi
t loss a
llowan
ce was im
materi
al at 3
1 Dec
embe
r 202
1 and 2020.
24
. In
v
entories
2021
£m
2020
£m
Raw materials and consumables
1
,772
1
,170
W
ork in progress
1,88
9
2,3
95
Finished goods
2,1
22
2,431
5,
783
5,99
6
25. T
rade and other receiv
ables
2021
£m
2020
£m
T
rade receivables, net of loss allowance
6,246
5,54
9
Accrued income
12
13
Prepayments
3
15
359
Interest receivable
3
3
Employee loans and advances
18
11
Other receivables
1,266
1,0
1
7
7
,
860
6,952
T
rade re
ceiv
able
s inclu
ded £ni
l (
2020 – £nil) d
ue from a
sso
ciate
s and joi
nt venture
s. O
ther re
ceiv
able
s inclu
ded £ni
l (
2020 – £nil)
due f
rom as
soci
ates and j
oint vent
ures
.
Loss allowance - trade r
eceivables
2021
£m
2020
£m
At 1 January
15
1
130
Exchange adjustments
(3)
(4)
Charge for the year
52
41
Subsequent recoveries of amounts provided for
(3
9)
(8)
Utilised
(1
1)
(8)
At 31 December
15
0
151
Of t
he total t
rade re
cei
vable
s bala
nce, £
86 mil
lion (2020 – £50 m
illio
n
) was co
nside
red cr
edit im
paire
d, aga
inst w
hich a
£
4 millio
n (
2020 – £20 mill
ion) expec
ted cre
dit los
s allowa
nce ha
s bee
n appli
ed. No a
mount wa
s purc
hase
d or ori
ginated
credit impaired.
Wi
thin the ot
her rec
eiva
bles of £1
,266 mi
llion (2020 – £1
,01
7 mill
ion)
, £
553 mill
ion (2020 – £402 m
illion) was c
las
siﬁ
ed as
ﬁna
ncia
l ass
ets of wh
ich £ni
l (
2020 – £nil) w
as cla
ssi
ﬁed a
s fair va
lue thro
ugh pro
ﬁt and l
oss
. On the r
emain
ing bal
ance o
f
£
553 mil
lion (2020 – £4
02 millio
n
)
, an ex
pecte
d credi
t los
s allowan
ce of £
5 milli
on (
2020 – £6 mi
llion) was re
cogn
ised at
3
1 De
cemb
er 202
1 with no c
harg
e repo
rted i
n proﬁ
t or los
s durin
g the yea
r
.
For m
ore dis
cus
sion on c
redi
t risk pr
acti
ces
, plea
se ref
er to Note 43
.
GS
K Ann
ual R
epor
t 2021
201
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
26
. Cash and c
ash equivalent
s
2021
£m
2020
£m
Cash at bank and in hand
1,427
1,
7
62
Short-term deposits
2,847
4,530
4,27
4
6,292
Ca
sh and c
ash e
quival
ents in
clude
d £0.
2 billio
n (
2020 – £0.
2 billi
on
) not avail
able fo
r gener
al use d
ue to res
trict
ions ap
plyi
ng
in the
subsidiaries where it
is held. Restriction
s include
exchange
controls
and taxes on repatria
tion.
2
7
. A
ssets held for sale
2021
£m
2020
£m
Property
, plant and equipment
22
25
Other intangibles
–
62
Inventory
–
19
22
10
6
No
n-cur
rent a
sset
s and dis
posa
l group
s are tr
ansfe
rred to A
sset
s held fo
r sale w
hen it i
s expec
ted that th
eir ca
rr
ying a
mounts
wil
l be rec
overed p
rinci
pally t
hrough d
ispo
sal an
d a sale i
s cons
ider
ed high
ly prob
able
. They ar
e held at th
e lower of c
arr
ying
amo
unt and f
air valu
e les
s cost
s t
o sel
l.
Th
ere is no i
nventor
y wri
tten dow
n to fair va
lue les
s cos
ts to sell i
nclud
ed in As
sets he
ld for s
ale (2020 - £
1
9 m
illion). The va
luati
on
meth
odol
ogy use
d signi
ﬁc
ant inpu
ts whi
ch were not b
ase
d on obs
er
vable m
arket dat
a and th
erefor
e this val
uation i
s cla
ssi
ﬁed as
level 3 i
n the fai
r value hi
erar
chy
.
Int
angi
ble as
sets of £
48 mi
llion we
re tran
sfer
red fro
m Othe
r inta
ngible
s duri
ng the yea
r (
2020 - £7
85 mi
llion). The
re were no
int
angib
le as
sets he
ld for sa
le af
ter impa
irme
nts, exc
hange m
ovement
s and as
sets di
veste
d during t
he year r
emain
ing at 3
1
De
cemb
er 202
1 (
2020 - £62 mil
lion).
20
2
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
28
. T
rade and other pay
ables
2021
£m
2020
£m
T
rade payables
4,53
5
4,35
7
W
ages and salaries
1,4
70
1,3
6
7
Social security
15
2
15
9
V
iiV Healthcare put option
1,008
960
Other payables
5
18
409
Deferred income
3
07
3
61
Customer return and rebate accruals
6,322
5,
775
Other accruals
3,242
2,452
1
7
,
554
15,84
0
T
rade an
d other paya
bles i
nclud
ed £ni
l (
2020 – £65 mi
llion) due to a
ssoc
iates an
d joint ve
ntures
. The G
roup p
rovide
s limite
d
sup
plier ﬁ
nanci
ng arr
ange
ments to c
ert
ain cu
stomer
s. T
he amou
nts involve
d at 3
1 Dec
embe
r 202
1 were not ma
terial
.
Revenu
e rec
ognis
ed in the ye
ar that wa
s inclu
ded in d
eferr
ed inc
ome at 1 Ja
nuar
y 202
1 was £29 m
illio
n (
2020 – £3
3 millio
n
).
Cus
tomer r
eturn an
d rebate ac
cru
als ar
e provid
ed for by the G
roup at t
he point o
f sale i
n resp
ect of t
he esti
mated re
bates
,
dis
count
s or allowa
nce
s payable to c
ustome
rs, a
nd incl
uded £
5,0
44 milli
on (20
20 – £
4,686 m
illio
n
) in res
pect of U
S
Ph
armac
euti
cals a
nd V
acc
ines
, as mor
e fully d
escr
ibed i
n the Gro
up ﬁna
ncial r
eview on p
age 80
. Accr
uals ar
e made at th
e time of
sa
le but th
e actua
l amount
s paid a
re bas
ed on cl
aims ma
de som
e time af
ter the i
nitial r
eco
gnitio
n of the sa
le. As t
he amou
nts are
es
timated
, they may not f
ully re
ﬂect t
he ﬁna
l outcom
e and are s
ubje
ct to chan
ge depe
ndent u
pon, a
mongs
t other th
ings
, the ty
pes
of bu
ying gr
oup and pr
oduc
t sale
s mix
. The leve
l of accr
ual is r
eviewed a
nd adju
sted qu
ar
terly in l
ight of hi
storic
al exp
erie
nce of
actu
al amo
unts pa
id and any c
hange
s in ar
range
ments
. Futur
e events co
uld ca
use the a
ssu
mption
s on whic
h the acc
rua
ls are
ba
sed to cha
nge, w
hich c
ould af
fec
t the futu
re res
ults of th
e Group
.
P
ﬁzer
’
s put o
ption over i
ts sha
rehol
ding in V
iiV He
alth
care i
s curr
ently exe
rcis
able
. Pﬁ
zer may re
ques
t an IP
O of Vii
V Hea
lthc
are
at any ti
me and if e
ither G
SK do
es not c
onsen
t t
o suc
h IP
O or an of
feri
ng is not c
omple
ted with
in nine mo
nths
, Pﬁ
zer co
uld
req
uire GS
K to acqu
ire its s
hare
holdin
g. The a
mount o
f the liab
ilit
y for this p
ut opti
on, whi
ch is he
ld on the g
ross r
edem
ption
ba
sis, i
s deri
ved fro
m an inter
nal valu
ation of t
he Vii
V Hea
lthca
re bus
ines
s, uti
lisin
g both dis
counte
d forec
ast f
uture c
ash ﬂ
ow
and multiples-based methodologies.
Th
e table b
elow sh
ows on an in
dicat
ive bas
is the in
come s
tateme
nt and ba
lanc
e sheet s
ensi
tivit
y of the P
ﬁ
zer put o
ption to
reasonably possible changes in k
ey
assumptions.
Increase/(decr
ease) in ﬁnancial liability and loss/(gain)
in Income statement
2021
£m
2020
£m
1
0% increase in sales forecasts*
89
1
17
1
0% decrease in sales forecasts*
(89)
(116)
1% (1
00 basis points) increase in discount rate
(30)
(41)
1% (1
00 basis points) decrease in discount rate
34
45
1
0 cent appreciation of US Dollar
55
52
1
0 cent depreciation of US Dollar
(47)
(45)
1
0 cent appreciation of Euro
26
42
1
0 cent depreciation of Euro
(22)
(34)
* The sales forecast is for V
iiV Healthcare sales only in respect of the ViiV Healthcare put option.
An ex
plan
ation of th
e acco
unting fo
r Vii
V Heal
thca
re is set o
ut on pag
e 5
7
.
GS
K Ann
ual R
epor
t 2021
203
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
29. Net debt
Listing exchange
2021
£m
2020
£m
Current assets:
Liquid investments
61
78
Cash and cash equivalents
4,27
4
6,292
4,335
6
,
370
Short-term borrowings:
Commercial paper
(252)
(17)
Bank loans, overdrafts and other
(55
0)
(1,128)
LI
BO
R +0.35% US$ US Medium T
erm Note 2021
New Y
ork Stock Exc
hange
–
(54
9)
E
UR
I
BO
R +60% € Euro Medium T
erm Note 2021
London Stock Exchange
–
(1,351)
0.000% € Euro Medium T
erm Note 2021
London Stock Exc
hange
–
(45
0)
2.850% U
S$ US Medium T
erm Note 2022
New Y
ork Stock Exc
hange
(1,4
83)
–
2.8
75% US$ U
S Medium T
erm Note 2022
New Y
ork Stock Exchange
(1,1
1
3)
–
Lease liabilities
(203)
(230)
(3,601)
(3,
725)
Long-term borrowings:
2.850% U
S$ US Medium T
erm Note 2022
New Y
ork Stock Exc
hange
–
(1,463)
2.8
75% US$ U
S Medium T
erm Note 2022
New Y
ork Stock Exchange
–
(1,097)
2.800% U
S$ US Medium T
erm Note 2023
New Y
ork Stock Exc
hange
(926)
(913)
0.125% € Euro Medium T
erm Note 2023
London Stock Exc
hange
(629)
(
673)
Exchangeable US$ US Medium T
erm Note 2023
New Y
ork Stock Exc
hange
(204)
(19
9)
3.3
75% US$ U
S Medium T
erm Note 2023
New Y
ork Stock Exchange
(925)
(912)
0.000% € Euro Medium T
erm Note 2023
London Stock Exc
hange
(420)
(45
0)
0.534% U
S$ US Medium T
erm Note 2023
New Y
ork Stock Exc
hange
(926)
(913)
3.000% US$ U
S Medium T
erm Note 2024
New Y
ork Stock Exc
hange
(739)
(728)
1.3
75% € Euro Medium T
erm Note 2024
London Stock Exchange
(836)
(89
4)
4.000% € Euro Medium T
erm Note 2025
London Stock Exc
hange
(627)
(
670)
3.625% US$ U
S Medium T
erm Note 2025
New Y
ork Stock Exc
hange
(738)
(728)
1.000% € Euro Medium T
erm Note 2026
London Stock Exc
hange
(587)
(628)
1.250% € Euro Medium T
erm Note 2026
London Stock Exc
hange
(838)
(89
6)
3.3
75% £ Euro Medium T
erm Note 2027
London Stock Exchange
(595)
(5
95)
3.8
75% US$ U
S Medium T
erm Note 2028
New Y
ork Stock Exchange
(1,294)
(1,27
8)
1.250% £ Euro Medium T
erm Note 2028
London Stock Exchange
(7
43)
(7
42)
3.3
75% US$ U
S Medium T
erm Note 2029
New Y
ork Stock Exchange
(7
33)
(723)
1.3
75% € Euro Medium T
erm Note 2029
London Stock Exchange
(41
8)
(447)
1.
75
0% € Euro Medium T
erm Note 203
0
London Stock Exchange
(628)
(
672
)
5.250% £ Euro Medium T
erm Note 2033
London Stock Exchange
(9
84)
(983)
5.3
75% US$ U
S Medium T
erm Note 203
4
London Stock Exc
hange
(3
68)
(363)
1.625% £ Euro Medium T
erm Note 2035
London Stock Exchange
(7
4
4)
(7
43)
6.3
75% US$ U
S Medium T
erm Note 203
8
New Y
ork Stock Exchange
(2,022)
(1,9
96)
6.3
75% £ Euro Medium T
erm Note 2039
London Stock Exchange
(6
95)
(695)
5.250% £ Euro Medium T
erm Note 20
42
London Stock Exchange
(987)
(987)
4.200% US$ U
S Medium T
erm Note 20
43
New Y
ork Stoc
k Exchange
(3
64)
(359)
4.250% £ Euro Medium T
erm Note 20
45
London Stock Exchange
(789)
(7
89)
Other long-term borrowings
(1)
(2)
Lease liabilities
(81
2)
(8
8
7)
(20,57
2)
(23,425)
Net debt
(1
9,838)
(20,
7
8
0)
20
4
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Current assets
Li
quid inve
stment
s are cl
ass
iﬁe
d as ﬁna
ncia
l ass
ets at amo
rti
sed c
ost. At 31 Dec
embe
r 202
1
, th
ey inclu
ded US T
rea
sur
y Note
s
and o
ther gover
nmen
t bonds
. The e
ffe
ctive in
teres
t rate on liq
uid inves
tment
s at 3
1 Dece
mber 2021 was ap
proxi
mately 0.
1
%
(2020 – approx
imatel
y 1
.
1
%). Liqui
d invest
ment ba
lanc
es at 3
1 Dec
embe
r 202
1 ear
ning inter
est at ﬂ
oating r
ates amo
unt to
£2 mil
lion (2020 – £7
8 mill
ion). Liqui
d investm
ent bal
ance
s at 3
1 Dec
embe
r 202
1 earn
ing inter
est at ﬁ
xed rate
s amoun
t t
o
£
59 millio
n (
2020 – £nil).
Ba
lanc
es rep
orte
d withi
n cas
h and ca
sh eq
uivale
nts have an o
rigin
al matur
ity of t
hree mo
nths or le
ss
. The ef
fec
tive inter
est
rate on c
as
h and ca
sh equ
ivale
nts at 3
1 Dec
embe
r 202
1 was app
roxim
ately 0.6% (2020 – ap
proxim
ately 0.
3%
). Cas
h and ca
sh
equ
ivale
nts at 3
1 Dec
embe
r 202
1 earn
ing inter
est at ﬂ
oating a
nd ﬁxed r
ates am
ounted to £
3,9
06 mil
lion an
d £39 m
illion
re
spec
tively (2020 – £6
,
1
00 mil
lion an
d £9 mill
ion
) and n
on-inte
rest b
ear
ing hol
dings am
ounted to £
329 milli
on (2020 –
£1
8
3 millio
n
).
GS
K’s poli
cy rega
rding t
he cre
dit qua
lity o
f cas
h and ca
sh equ
ivale
nts is set o
ut in Note 4
3, ‘
Fina
ncial i
nstru
ments a
nd
related
disclosures’
.
Short-term borrowings
GS
K has a $1
0 billio
n (
£7
.4 bi
llion) US co
mmerc
ial pa
per pr
ogra
mme, of w
hich $
nil was i
n issu
e at 3
1 Dec
ember 2021 (2020 –
$25 mil
lion (£
1
7 mil
lion)
). GSK h
as a £
5 billio
n Euro co
mmer
cial p
aper pr
ogra
mme, of w
hich €
30
0 millio
n (
£252 milli
on
) was in
is
sue at 31 Dece
mber 2021 (
2020 – £ni
l). GSK ha
s a £1
.9 b
illio
n three
-year c
ommit
ted fa
cilit
y and $2
.5 bill
ion (£
1
.9 billi
on
) unde
r
a 364 d
ay comm
itted f
acili
ty. The thr
ee-ye
ar com
mit
ted faci
lity wa
s agre
ed in Se
ptembe
r 20
1
9 ex
tend
ed by one ye
ar in Sep
tember
2020 and wa
s ex
tended a
gain by on
e year to 2024 in Augu
st 202
1
. The 36
4-day co
mmit
ted fac
ilit
y was agr
eed in Au
gust 2021
.
Th
ese fac
iliti
es were u
ndrawn a
t 3
1 Dece
mber 2021
.
In preparation f
or the
separation o
f the
Consumer Healthcare business, in February 202
2 GSK cancelled and
replaced the t
hree
yea
r and 364 d
ay facili
ties
. New revo
lving c
redi
t facili
ties of e
quiva
lent si
ze were agr
eed wi
th matur
ities i
n Septem
ber 2025 an
d
Sep
tember 2023
.
Th
e weighted ave
rage in
teres
t rate on co
mmerc
ial pa
per bo
rrowi
ngs at 3
1 De
cemb
er 202
1 was -
0.5% (2020 – 2.
4
%
).
Th
e weighted ave
rage in
teres
t rate on cur
rent b
ank loa
ns and over
draf
ts at 31 Dece
mber 2021 was 7
.
9% (2020 – 5.8
%
).
Th
e a
vera
ge ef
fecti
ve pre-
swap inte
rest r
ate of notes c
las
siﬁe
d as sh
or
t
-term at 31 Dece
mber 2021 was 3
.0% (2020 – 0.0
%
).
Th
e 0.0% r
ate in 2020 reﬂ
ected th
e maturi
ties of a L
IBO
R +0.3
5% coup
on note in M
ay 202
1
, a
nd both a ze
ro coup
on and a
EUR
I
BOR +0.60
% note in S
eptemb
er 202
1
.
Long-term borrowings
At the ye
ar-end
, GSK ha
d long-te
rm bor
rowing
s of £20.6 bi
llion (2020 – £23.
4 billi
on
), of whic
h £
1
1.
7 billio
n (
2020 – £
1
3.3 b
illio
n
)
fell d
ue in mor
e than ﬁ
ve year
s. Th
e a
vera
ge ef
fecti
ve pre-
swap inte
rest r
ate of all note
s in is
sue at 3
1 De
cemb
er 202
1 was
app
roxim
ately 3.
3% (2020 – appr
oximatel
y 3.6%).
Lon
g-term bo
rrowi
ngs rep
ayable af
ter ﬁ
ve year
s car
ry in
teres
t at eff
ective r
ates be
twee
n 1
.
4
% and 6
.4%, wi
th rep
a
yme
nt dates
ra
nging fr
om 202
7 to 2045
.
Pledged assets
Th
e Group h
eld ple
dged i
nvestme
nts in US T
re
asur
y Note
s with a p
ar value o
f $56 mi
llion (£
4
2 milli
on
), (
2020 – $50 m
illion
(£37 mill
ion)
) as sec
urit
y agai
nst ir
revoca
ble let
ters o
f credi
t iss
ued on th
e Group’s beha
lf in re
spe
ct of the G
roup’s self-in
sura
nce
act
ivit
y
. Prov
isio
ns in res
pect o
f self-i
nsura
nce ar
e inclu
ded wi
thin the p
rovisi
ons for l
egal a
nd other d
ispute
s discu
sse
d in Note 31
,
‘Other provisions
’
.
Lease liabilities
Th
e maturi
ty ana
lysi
s of disc
ounted le
ase l
iabil
itie
s reco
gnise
d on the Gr
oup ba
lanc
e sheet i
s as foll
ows:
2021
£m
2020
£m
Rental payments due within one year
203
230
Rental payments due between one and two years
18
5
2
07
Rental payments due between two and three years
12
0
126
Rental payments due between three and four years
93
96
Rental payments due between four and ﬁve years
73
86
Rental payments due after ﬁve years
3
41
372
T
otal lease liabilities
1,01
5
1,117
29. Net debt
continued
GS
K Ann
ual R
epor
t 2021
205
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
30
. Pensi
ons and other post
-employment beneﬁts
Pension and other post-employment costs
2021
£m
2020
£m
20
19
£m
U
K pension sc
hemes
19
8
255
181
US pension schemes
42
62
120
Other overseas pension schemes
16
4
18
9
185
Unfunded post-retirement healthcare schemes
67
13
74
47
1
519
560
Analysed as:
Funded deﬁned beneﬁt/hybrid pension schemes
245
3
41
3
00
Unfunded deﬁned beneﬁt pension schemes
21
32
41
Unfunded post-retirement healthcare schemes
67
13
74
Deﬁned beneﬁt schemes
333
386
415
Deﬁned contribution pension schemes
13
8
133
145
47
1
519
560
Th
e cost
s of the deﬁ
ned be
neﬁt p
ensi
on and po
st-reti
remen
t heal
thca
re sche
mes ar
e char
ged in th
e incom
e statem
ent as f
ollows:
2021
£m
2020
£m
20
19
£m
Cost of sales
12
9
143
14
9
Selling, general and administration
15
3
185
195
Research and development
51
59
71
333
3
87
415
GS
K entit
ies op
erate pe
nsion a
rran
geme
nts whic
h cover th
e Group’s mater
ial obl
igatio
ns to provi
de pen
sions to r
etired e
mploye
es.
Th
ese ar
rang
ement
s have been d
evelope
d in acc
orda
nce wi
th loc
al pra
ctic
es in the c
ountr
ies c
oncer
ned. P
ensio
n bene
ﬁts ca
n be
provided b
y stat
e schemes
; b
y deﬁned cont
ribution schemes, whereby
retirement
beneﬁts are
determined
by
the v
alue of
funds
ari
sing f
rom con
tribu
tions p
aid in re
spe
ct of eac
h employe
e
; or by de
ﬁned b
eneﬁ
t sche
mes
, wher
eby retir
ement b
eneﬁ
ts are b
ase
d
on employ
ee pensionable
remunerat
ion and len
gth of
servic
e.
Pens
ion co
sts of de
ﬁned b
eneﬁ
t sche
mes fo
r acco
unting pu
rpos
es have be
en ca
lculate
d using th
e proje
cted uni
t cred
it metho
d. In
cer
tain
countries pension
beneﬁts are pro
vided on
an unfunded
basis, some administ
ered b
y trust
ee companies. Formal,
ind
epend
ent, ac
tuar
ial val
uation
s of the Gr
oup’
s main p
lans a
re unde
rt
aken reg
ular
ly
, norm
ally at l
eas
t ever
y three ye
ars
.
Rem
eas
ureme
nt moveme
nts in the ye
ar are r
ecog
nise
d throug
h the state
ment of c
ompr
ehens
ive inc
ome. D
isco
unt rates a
re
derived from
A
A
rated
corporate
bond yields e
xcept i
n countries where
there is
no deep
market
in corporat
e bonds where
gover
nment b
ond yi
elds ar
e used
. Disc
ount r
ates are s
elec
ted to reﬂ
ect the te
rm of the ex
pecte
d bene
ﬁt paym
ents
. Proje
cted
inﬂation rat
es and
pension increases are lon
g-t
erm predictions
based on the
yield gap be
tween long-
term inde
x-l
inked
and ﬁxed
inter
est G
ilts
. In the U
K
, mor
tali
ty rate
s are de
t
er
mined by ad
justi
ng the SA
PS S3 s
tand
ard mo
rt
alit
y tabl
es to reﬂ
ect re
cent s
chem
e
exp
erie
nce. T
hese r
ates ar
e then pro
jecte
d to reﬂe
ct impr
ovement
s in life ex
pect
ancy i
n line wi
th the CM
I 2020 pro
jecti
ons wi
th a
lon
g-term ra
t
e of im
proveme
nt of 1
.25% per ye
ar for b
oth male
s and fe
male
s. In t
he US, m
or
talit
y rate
s are ca
lcula
ted usin
g the
PR
I-201
2 whi
te colla
r tabl
e adjus
ted to reﬂ
ect re
cent ex
peri
ence
. Thes
e rates a
re proj
ected u
sing M
P-2020 t
o all
ow for futur
e
imp
rovemen
ts in life ex
pec
tancy.
20
6
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e a
vera
ge life ex
pect
ancy a
ssu
med now for a
n indiv
idua
l at the age of 6
0 and pr
ojecte
d to appl
y in 204
1 fo
r an indi
vidu
al then at
the ag
e of 60 is a
s follows:
UK
US
Male
Y
ears
Female
Y
ears
Male
Y
ears
Female
Y
ears
Current
2
7.
7
28.
7
2
7.
2
28.5
Projected for 2041
29.2
3
0.2
28.
7
3
0.0
Th
e ass
ets of fun
ded sc
heme
s are gen
eral
ly held i
n sepa
rately ad
minis
tered tr
usts
, eith
er as sp
eciﬁ
c as
sets or a
s a prop
or
tion of a
gen
eral f
und, or a
re insu
ranc
e contr
acts
. As
sets ar
e invested i
n dif
fere
nt cla
sse
s in orde
r to maint
ain a ba
lance b
etwe
en ris
k and
retu
rn. I
n
ves
tments a
re dive
rsi
ﬁed to lim
it the ﬁn
ancia
l ef
fect of th
e failu
re of any in
divid
ual inve
stmen
t. The p
hysic
al as
set all
ocati
on
str
ategy for t
hree of th
e four U
K plans i
s 4
2.5
% in retur
n-se
ekin
g ass
ets and 57
.5% i
n liabi
lity
-matchi
ng as
sets
. Duri
ng 20
1
9, a
buy
-in ins
uranc
e cont
ract wa
s purc
hase
d to cover sub
sta
ntiall
y all of th
e oblig
ations of t
he other U
K pla
n. At 3
1 Dec
embe
r 202
1
,
the va
lue of the i
nsura
nce c
ontrac
t was £
5
7
0 mill
ion (2020 – £620 milli
on
). The a
sse
t alloc
ation o
f the US pl
ans is cu
rrent
ly set at
25% ret
urn-s
eek
ing as
sets an
d 7
5% lia
bilit
y-ma
tching a
sset
s.
Th
e pensi
on pla
ns are exp
ose
d t
o ris
k that ar
ises b
eca
use the e
stimate
d marke
t value of th
e plans’ a
sse
ts might d
eclin
e, the
inves
tment r
eturns m
ight re
duce
, or the es
timated v
alue of th
e plans’ li
abili
ties m
ight inc
rea
se.
In li
ne with t
he agre
ed mix of r
eturn
-seek
ing a
sset
s to gener
ate futur
e return
s and lia
bilit
y-m
atching a
sset
s to bette
r match futu
re
pen
sion o
bligati
ons
, the Gro
up has d
eﬁne
d an overa
ll long-te
rm inves
tment s
trategy f
or the pl
ans, w
ith inves
tment
s acros
s a broa
d
ra
nge of as
sets
. The m
ain mar
ket ris
ks with
in the as
set a
nd hedg
ing por
t
folio ar
e agai
nst cre
dit ri
sk, i
nteres
t rates
, long-te
rm
inﬂation,
equities, property,
currency
and bank
count
erpart
y
risk.
Th
e plan li
abili
ties ar
e a seri
es of fu
ture ca
sh ﬂow
s with re
lativel
y long du
ratio
n. On an I
AS 1
9 basi
s, the
se ca
sh ﬂows a
re sen
sitive to
cha
nges i
n the expe
cted lo
ng-term i
nﬂati
on rate an
d the disc
ount r
ate (A
A cor
porate b
ond yie
ld cur
ve
) whe
re an inc
rea
se in lon
g-term
inﬂ
ation c
orre
spon
ds with a
n incr
eas
e in the lia
bilit
ies
, and an in
crea
se in th
e disco
unt rate c
orre
spond
s with a d
ecre
ase in t
he liab
ilitie
s.
Th
e intere
st rate ri
sk and cr
edit r
ate risk i
n the US ar
e par
tial
ly hed
ged. T
he tar
gets ar
e base
d on an ac
count
ing mea
sure o
f the
plan liabi
lities.
For t
he UK pl
ans
, there i
s an intere
st rate a
nd inﬂ
ation he
dging s
trateg
y in plac
e. The t
arge
ts are ba
sed o
n an eco
nomic m
easu
re of
the p
lan lia
biliti
es. F
ur
therm
ore, th
e plans a
lso cur
rentl
y hedg
e a por
tion of t
heir eq
uity e
xpos
ure wit
h a stagg
ered m
aturit
y pro
ﬁle.
In th
e UK
, the de
ﬁned b
eneﬁ
t pens
ion sc
heme
s opera
ted for the b
eneﬁ
t of form
er Gla
xo Wellc
ome em
ployee
s and for
mer
Smi
thK
line Be
echa
m employe
es re
main se
para
t
e. T
hese s
cheme
s were c
losed to n
ew entra
nts in 20
0
1 and sub
sequ
ent UK
emp
loyees a
re enti
tled to jo
in a deﬁn
ed con
tribu
tion sc
heme. I
n addi
tion, t
he Gro
up oper
ates a numb
er of po
st-retir
ement
he
althc
are sc
heme
s, the p
rinci
pal one o
f whic
h is in the U
S.
Fol
lowing a p
erio
d of cons
ultat
ion wit
h impac
ted empl
oyees
, it was a
nnounc
ed on 1
7 D
ece
mber 2020 th
at the UK d
eﬁne
d bene
ﬁt
pla
ns would b
e clos
ed to futur
e accr
ual ef
fec
tive fro
m 3
1 Mar
ch 2022. As a re
sult
, post c
losur
e the ac
crue
d beneﬁ
ts of ac
tive
par
ti
cipan
ts will b
e revalue
d in line w
ith inﬂ
ation (R
PI fo
r the leg
acy Gl
axo Wellc
ome pl
ans an
d CPI fo
r the leg
acy Smi
thK
line Be
echa
m
pla
ns subj
ect to the r
elevant c
aps fo
r each a
rran
gemen
t
) rath
er than c
app
ed pay inc
reas
es
. In addi
tion
, all deﬁ
ned be
neﬁt p
lan
par
ti
cipan
ts who ar
e still a
ctive at 1 A
pril 2022 wi
ll rec
eive a deﬁ
ned pe
nsio
n contr
ibutio
n of £1
0,0
00 e
ach. T
he ef
fect of c
losu
re and
the d
eﬁne
d contr
ibuti
on enha
ncem
ent togeth
er res
ulted in a o
ne-o
ff c
ost of £7
4 m
illion i
n 2020.
It wa
s anno
unce
d on 9 Septem
ber 2020 tha
t the US c
ash ba
lanc
e pensi
on pla
ns would b
e clos
ed to futur
e accr
ual fro
m 1 Janu
ar
y
202
1
. This c
hange r
esul
ted in a cre
dit of £
56 milli
on. On 1 J
une 2020 and 9 S
eptemb
er 2020, t
wo amend
ments we
re made to th
e
reti
ree he
althc
are p
lans in th
e US res
ultin
g in a cred
it of £
55 milli
on.
Th
e Group h
as app
lied th
e follow
ing ﬁna
ncia
l assu
mptio
ns in as
ses
sing th
e deﬁn
ed bene
ﬁt lia
bilit
ies:
UK
US
Rest of World
2021
% pa
2020
% pa
20
19
% pa
2021
% pa
2020
% pa
20
19
% pa
2021
% pa
2020
% pa
20
19
% pa
Rate of increase of future earnings
2.00
2.00
2.00
n/a
n/a
4.00
2.9
0
2.6
0
2
.7
0
Discount rate
2.00
1.4
0
2.00
2.7
0
2.3
0
3.20
1.1
0
0.6
0
1.1
0
Expected pension increases
3.20
2.8
0
3.00
n/a
n/a
n/a
2.3
0
2.1
0
2.1
0
Cash balance credit/conversion rate
n/a
n/a
n/a
2.00
1.90
2.6
0
0.20
0.1
0
0.1
0
Inﬂation rate
3.20
2.80
3.00
2.25
2.00
2.25
1.9
0
1.30
1.4
0
Sen
sitiv
ity a
naly
sis det
ailin
g the ef
fect of c
hang
es in as
sump
tions is p
rovid
ed on pag
e 2
1
3
. The an
alysi
s provi
ded re
ﬂect
s the
as
sumpt
ion cha
nges w
hich h
a
ve the mo
st mater
ial im
pact on t
he res
ults of th
e Group
.
30. Pensions and other post-employment beneﬁts
continued
GS
K Ann
ual R
epor
t 2021
207
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e amount
s reco
rded i
n the inc
ome st
atement a
nd state
ment of c
ompre
hensi
ve inco
me for the t
hree ye
ars en
ded 31 Dece
mber
202
1 in re
lation to th
e deﬁn
ed ben
eﬁt pe
nsion a
nd pos
t
-ret
ireme
nt hea
lthca
re sch
emes we
re as fo
llows:
Pensions
Post-r
etirement
beneﬁts
2021
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Group
£m
Amounts charged to operating proﬁt
Current service cost
56
9
151
2
16
29
Past service cost
28
2
(25)
5
12
Net interest cost
3
19
6
28
26
Gains from settlements
–
–
(1
0)
(1
0)
–
Expenses
15
12
–
27
–
10
2
42
122
26
6
67
Remeasurement gains/(losses) recorded in the statement of
comprehensive income
572
97
19
4
8
63
78
Pensions
Post-retirement
beneﬁts
2020
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Group
£m
Amounts charged to operating proﬁt
Current service cost
61
83
1
47
291
36
Past service cost/(credit)
98
(56)
1
43
(55)
Net interest (income)/cost
3
23
10
36
39
Gains from settlements
–
–
(18)
(18)
(7)
Expenses
9
12
–
21
–
17
1
62
14
0
373
13
Remeasurement gains/(losses) recorded in the statement of
comprehensive income
51
(96)
(60)
(1
05)
(82)
Pensions
Post-retirement
beneﬁts
2
0
19
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Group
£m
Amounts charged to operating proﬁt
Current service cost
62
74
13
0
266
22
Past service cost/(credit)
49
(3)
(15)
31
–
Net interest (income)/cost
(19)
29
16
26
52
Gains from settlements
–
–
(9)
(9)
–
Expenses
7
20
–
27
–
99
120
122
341
74
Remeasurement losses recorded in the statement of
comprehensive income
(8
94)
(1)
(78)
(
973)
(7
7)
Th
e amount
s inclu
ded wi
thin pa
st ser
vi
ce co
sts in the U
K inc
luded £
2
7 milli
on (
2020 – £24 millio
n
; 20
1
9 – £
58 mi
llion) of
aug
mentat
ion co
sts whi
ch aro
se from M
ajo
r rest
ructu
ring pr
ogra
mmes
, togeth
er with a c
harge o
f £nil (2020 –£7
4 millio
n
) in
rel
ation to th
e impac
t of the cl
osure o
f the deﬁ
ned be
neﬁt s
cheme
s to futur
e accr
ual.
In 2020, t
he pas
t ser
vic
e cred
it of £
56 millio
n in the US r
eﬂe
cted the c
losur
e of the ca
sh ba
lanc
e pensi
on pla
ns from 1 J
anuar
y
202
1
. Amen
dment
s to the retir
ee hea
lthc
are pl
an in the U
S in 2020 res
ulted in a c
redit o
f £55 mi
llion to p
ast se
rv
ice c
osts in
pos
t
-re
tirem
ent ben
eﬁts in 2020
.
30. Pensions and other post-employment beneﬁts
continued
20
8
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
A sum
mari
sed ba
lanc
e sheet p
rese
ntatio
n of the Gr
oup de
ﬁned b
eneﬁ
t pensi
on sch
emes a
nd other p
ost-ret
ireme
nt bene
ﬁts is s
et
out i
n the tab
le bel
ow:
2021
£m
2020
£m
20
19
£m
Recognised in Other non-current assets:
Pension sc
hemes in surplus
74
1
183
127
Recognised in Assets held for sale:
Post-retirement beneﬁts
–
–
(9)
Recognised in Pensions and other post-employment beneﬁts:
Pension sc
hemes in deﬁcit
(1,8
70)
(2,28
7)
(2,04
8)
Post-retirement beneﬁts
(1,243)
(1,3
63)
(1,4
09)
(3,1
1
3)
(3,650)
(3,457)
In th
e event of a pl
an wind
-up, GS
K beli
eves the U
K pens
ion sc
heme r
ules pr
ovide th
e comp
any with t
he righ
t to a refund o
f surpl
us
as
sets fo
llowin
g the full s
ettl
ement o
f plan li
abili
ties
. As a re
sult, t
he net sur
plus i
n the UK d
eﬁne
d bene
ﬁt pen
sion sc
heme
s is
recognised in ful
l.
Th
e fair val
ues of th
e ass
ets and li
abili
ties o
f the UK a
nd US de
ﬁned b
eneﬁ
t pensi
on sch
emes
, togeth
er with a
ggreg
ated data f
or
othe
r deﬁn
ed ben
eﬁt pe
nsion s
chem
es in the G
roup a
re as fol
lows:
At 31 December 2021
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Equities:
– listed
3,954
522
73
1
5,207
– unlisted
–
–
4
4
Multi-asset funds
1,415
–
–
1,415
Property:
– listed
–
–
68
68
– unlisted
502
15
4
1
6
57
Corporate bonds:
– listed
1,503
97
5
14
0
2,61
8
– unlisted
–
–
15
15
Government bonds:
– listed
5,054
72
4
984
6,
762
Insurance contracts
1,334
–
9
17
2,251
Other (liabilities)/assets
(130)
149
72
91
Fair value of assets
13,632
2,524
2,932
1
9,0
88
Asset ceiling restrictions
–
–
(26)
(26)
Present value of scheme obligations
(13,29
9)
(3,24
8)
(3,6
44)
(20,1
91)
Net surplus/(obligation)
333
(7
24)
(738)
(1,1
29)
Included in Other non-current assets
606
–
135
74
1
Included in Pensions and other post-employment beneﬁts
(2
7
3)
(7
24)
(
873)
(1,87
0)
333
(724)
(738)
(1,1
29)
Actual return on plan assets
541
97
48
686
Th
e multi-
ass
et funds c
ompr
ise inve
stme
nts in poo
led inve
stmen
t vehicl
es that a
re inves
ted acro
ss a ra
nge of as
set cl
ass
es,
inc
rea
sing di
versi
ﬁca
tion wi
thin the g
rowt
h por
tfo
lio. Th
e value of f
unds in t
his as
set cl
ass w
ith a quote
d market p
rice i
s
£
350 mil
lion (2020 – £8
4
7 m
illion).
Th
e ‘Othe
r (liab
ilitie
s
)/
as
sets’ cate
gor
y com
pris
es ca
sh and m
ark to mar
ket value
s of der
ivative p
ositi
ons
.
In
dex-linke
d gilts h
eld as p
ar
t of a UK re
po pro
gramm
e are in
clude
d in gover
nment b
onds
. The re
lated loa
n of £5
1
3 m
illio
n
at 31 Dece
mber 2021 (
2020 – £65
0 millio
n
; 20
1
9 – £
2
43 mill
ion) is dedu
cted wi
thin ‘O
ther a
sset
s
’
.
30. Pensions and other post-employment beneﬁts
continued
GS
K Ann
ual R
epor
t 2021
209
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
At 31 December 2020
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Equities:
– listed
2,686
53
9
686
3,91
1
– unlisted
–
–
5
5
Multi-asset funds
2,0
75
–
–
2,0
75
Property:
– listed
–
–
57
57
– unlisted
4
47
13
6
2
585
Corporate bonds:
– listed
1,113
1,06
6
154
2,333
– unlisted
–
–
20
20
Government bonds:
– listed
6,055
758
999
7
,81
2
Insurance contracts
1,4
09
–
988
2,39
7
Other (liabilities)/assets
(203)
136
78
11
Fair value of assets
13,5
82
2,635
2,98
9
1
9,206
Present value of scheme obligations
(13,85
8)
(3,4
45)
(4,00
7)
(21,31
0)
Net surplus/(obligation)
(27
6)
(81
0)
(1,0
18)
(2,1
04)
Included in Other non-current assets
77
–
10
6
18
3
Included in Pensions and other post-employment beneﬁts
(353)
(81
0)
(1,124)
(2,287)
(27
6)
(81
0)
(1,0
18)
(2,1
04)
Actual return on plan assets
1,092
15
9
177
1,428
At 31 December 201
9
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Equities:
– listed
2,90
4
67
1
638
4,213
– unlisted
–
–
8
8
Multi-asset funds
2,
700
–
–
2,
700
Property:
– listed
–
–
55
55
– unlisted
460
145
2
6
07
Corporate bonds:
– listed
297
855
141
1,293
– unlisted
326
–
23
349
Government bonds:
– listed
4,923
803
889
6,615
Insurance contracts
1,4
06
–
832
2,23
8
Other (liabilities)/assets
(35)
315
74
354
Fair value of assets
12,9
81
2
,7
8
9
2,662
18,432
Present value of scheme obligations
(13,293)
(3,50
6)
(3,55
4)
(20,353)
Net surplus/(obligation)
(312)
(71
7)
(8
92)
(1,921)
Included in Other non-current assets
70
–
57
127
Included in Pensions and other post-employment beneﬁts
(382)
(717)
(9
49)
(2,04
8)
(312)
(717)
(8
92)
(1,921)
Actual return on plan assets
787
35
6
3
45
1,48
8
30. Pensions and other post-employment beneﬁts
continued
210
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
30. Pensions and other post-employment beneﬁts
continued
Pensions
Post-r
etirement
beneﬁts
Movements in fair values of assets
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Group
£m
Assets at 1 January 20
19
12,5
81
2,80
8
2,39
0
1
7
,779
–
Exchange adjustments
–
(11
0)
(120)
(230)
–
Additions through business combinations
–
–
14
14
–
Interest income
360
111
37
508
–
Expenses
(7)
(20)
–
(27)
–
Settlements and curtailments
–
–
1
1
–
Remeasurement
427
245
312
984
–
Employer contributions
187
40
116
3
43
110
Scheme participants’
contributions
3
–
17
20
17
Beneﬁts paid
(
570
)
(285)
(1
05)
(960)
(1
27)
Assets at 31 December 20
19
12,981
2
,7
8
9
2,662
18,432
–
Exchange adjustments
–
(8
6)
138
52
–
Interest income
256
87
29
372
–
Expenses
(9)
(12)
–
(21)
–
Settlements and curtailments
–
–
(20)
(20)
–
Remeasurement
836
72
14
8
1,0
56
–
Employer contributions
156
33
124
3
13
10
5
Scheme participants’
contributions
3
–
18
21
18
Beneﬁts paid
(641)
(248)
(11
0)
(99
9)
(1
23)
Assets at 31 December 2020
13,582
2,635
2,9
89
1
9,20
6
–
Exchange adjustments
–
31
(184)
(1
53)
–
Interest income
1
87
57
18
262
–
Expenses
(15)
(12)
–
(27)
–
Settlements and curtailments
–
–
(7)
(7)
–
Remeasurement
354
40
30
424
–
Employer contributions
139
40
133
3
12
10
5
Scheme participants’
contributions
3
–
24
27
15
Beneﬁts paid
(618)
(26
7)
(97)
(9
82)
(1
20)
Assets at 31 December 2021
13,632
2,524
2,9
06
1
9,0
62
-
Dur
ing 2021
, th
e Group m
ade add
ition
al fund
ing con
tribu
tions to th
e UK pen
sion s
cheme
s of £
44 milli
on (2020 – £
76 millio
n
;
201
9 – £78 milli
on
) but £
nil (20
20 – £ni
l
; 20
1
9 – £
nil) to the U
S sche
mes
. In 201
8
, GSK re
ache
d a revis
ed agre
ement
wit
h the tru
stees of t
he UK p
ensio
n sche
mes to make a
dditi
onal c
ontrib
ution
s to elimin
ate the pen
sion de
ﬁcit
s ident
iﬁed w
ithin t
he
sch
emes a
t the 3
1 Dec
embe
r 20
1
7 actua
rial f
undin
g valuati
on. Ba
sed o
n these f
undin
g agree
ments
, the add
ition
al cont
ribut
ions
to elim
inate the p
ensio
n deﬁc
it are ex
pecte
d to be £
44 milli
on in 2022 and th
ese a
re inclu
ded wi
thin No
te 35, ‘C
ommi
tments’ o
n
pag
e 2
1
6. T
his fu
nding c
ommit
ment sup
ers
edes t
he previ
ous agr
eemen
t made in 201
6
. The c
ontri
butio
ns were ba
sed o
n a
gover
nment b
ond yi
eld cur
ve ap
proac
h to selec
ting th
e disco
unt rate; the r
ate chos
en incl
uded an a
llowan
ce for ex
pecte
d
inves
tment r
eturns w
hich r
eﬂec
ted the a
sset m
ix of the s
cheme
s.
Employer
contribution
s for
20
22,
including
special funding
contributions, are
estimat
ed t
o be appro
ximat
ely £380 million in
respect
of de
ﬁned b
eneﬁ
t pensi
on sch
emes a
nd £9
0 millio
n in res
pect o
f post-re
tirem
ent ben
eﬁts
.
GS
K Ann
ual R
epor
t 2021
2
11
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Pensions
Post-r
etirement
beneﬁts
Movements in deﬁned beneﬁt obligations
UK
£m
US
£m
Rest of W
orld
£m
Group
£m
Group
£m
Obligations at 1 January 20
19
(12,087)
(3,47
4)
(3,213)
(1
8,
7
7
4)
(1,379)
Exchange adjustments
–
140
177
3
17
50
Additions through business combinations
–
–
(5
6)
(5
6)
(4
8)
Service cost
(62)
(7
4)
(13
0)
(26
6)
(22)
Past service cost
(49)
3
15
(31)
–
Interest cost
(3
41)
(14
0)
(53)
(534)
(52)
Settlements and curtailments
–
–
8
8
–
Remeasurement
(1,321)
(24
6)
(39
0)
(1,9
5
7)
(77)
Scheme participants’
contributions
(3)
–
(17)
(20)
(1
7)
Beneﬁts paid
570
285
10
5
960
12
7
Obligations at 31 December 20
19
(13,293)
(3,5
06)
(3,554)
(20,3
53)
(1,418)
Exchange adjustments
–
118
(188)
(70)
36
Disposals
–
–
–
–
9
Service cost
(61)
(83)
(147)
(291)
(36)
Past service cost
(98)
56
(1)
(43)
55
Interest cost
(25
9)
(11
0)
(39)
(40
8)
(3
9)
Settlements and curtailments
–
–
38
38
7
Remeasurement
(7
85)
(16
8)
(20
8)
(1,1
61)
(82)
Scheme participants’
contributions
(3)
–
(18)
(21)
(18)
Beneﬁts paid
641
248
1
10
999
12
3
Obligations at 31 December 2020
(13,858)
(3,445)
(4,00
7)
(21,31
0)
(1,3
63)
Exchange adjustments
–
(40)
258
2
18
4
Service cost
(56)
(9)
(151)
(21
6)
(29)
Past service cost
(28)
(2)
25
(5)
(1
2)
Interest cost
(19
0)
(7
6)
(23)
(289)
(26)
Settlements and curtailments
–
–
17
17
–
Remeasurement
218
57
16
4
43
9
78
Scheme participants’
contributions
(3)
–
(24)
(27)
(1
5)
Beneﬁts paid
618
2
67
97
9
82
12
0
Obligations at 31 December 2021
(13,299)
(3,248)
(3,64
4)
(20,1
91)
(1,243)
The deﬁned beneﬁt pension
obligation
is analysed
as follo
ws
:
2021
£m
2020
£m
20
19
£m
Funded
(1
9,41
9)
(20,50
4)
(19,5
4
7)
Unfunded
(7
72)
(80
6)
(80
6)
(20,1
91)
(21,31
0)
(20,353)
Th
e liabi
lity fo
r the US po
st-reti
remen
t heal
thca
re sche
me has b
een a
sse
sse
d using th
e same a
ssu
mptio
ns as for th
e US pen
sion
sch
eme, to
gether w
ith the a
ssu
mption fo
r futur
e medic
al inﬂ
ation o
f 6.25% (2020 – 6.0
%
) in 202
1
, gradi
ng down to 5% in
2027 and the
reaf
ter
. At 3
1 De
cemb
er 202
1
, t
he US po
st-retir
ement h
ealth
car
e schem
e oblig
ation wa
s £
1
,059 mil
lion
(2020 – £
1
,
1
24 milli
on
; 201
9 – £1
,
1
9
8 millio
n
). Post-re
tirem
ent ben
eﬁts a
re unfun
ded.
30. Pensions and other post-employment beneﬁts
continued
2
12
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e movement i
n the net d
eﬁne
d beneﬁ
t liab
ilit
y is as fo
llows:
2021
£m
2020
£m
20
19
£m
At 1 January
(2,1
04)
(1,921)
(995)
Exchange adjustments
65
(18)
87
Additions through business combinations
–
–
(42)
Service cost
(21
6)
(291)
(266)
Past service cost
(5)
(43)
(31)
Interest cost
(27)
(3
6)
(26)
Settlements and curtailments
10
18
9
Remeasurements:
Return on plan assets, excluding amounts included in interest
424
1,056
984
(Loss)/gain from change in demographic assumptions
(62)
69
78
Gain/(loss) from change in ﬁnancial assumptions
7
16
(1,340)
(2,022)
Experience (loss)/gain
(21
5)
1
10
(13)
Employer contributions
3
12
313
3
43
Expenses
(27)
(21)
(27)
At 31 December
(1,1
29)
(2,1
0
4)
(1,921)
The remeasurements
included
within
post
-retiremen
t beneﬁts ar
e detailed
below
:
2021
£m
2020
£m
20
19
£m
Gain from change in demographic assumptions
19
7
–
Gain/(loss) from change in ﬁnancial assumptions
35
(93)
(8
0)
Experience gains
24
4
3
78
(82)
(77)
Th
e deﬁne
d bene
ﬁt pen
sion o
bligat
ion ana
lyse
d by membe
rshi
p catego
ry i
s as foll
ows:
2021
£m
2020
£m
20
19
£m
Active
4,1
96
4,66
0
4
,572
Retired
11
,
11
5
11,257
1
0,485
Deferred
4,88
0
5,3
93
5,296
20,1
91
21,31
0
20,353
Th
e post-re
tirem
ent ben
eﬁt ob
ligati
on anal
ysed by m
ember
ship c
ategor
y is a
s follow
s
:
2021
£m
2020
£m
20
19
£m
Active
494
551
549
Retired
74
8
808
869
Deferred
1
4
–
1,243
1,363
1,418
Th
e weighted ave
rage du
ratio
n of the deﬁ
ned be
neﬁt o
bliga
tion is a
s follow
s
:
2021
years
2020
years
20
19
years
Pension beneﬁts
15
16
15
Post-retirement beneﬁts
12
12
12
30. Pensions and other post-employment beneﬁts
continued
GS
K Ann
ual R
epor
t 2021
2
13
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Sensitivity analysis
Th
e effe
ct of ch
ange
s in as
sumpti
ons use
d on the be
neﬁt o
blig
ations a
nd on the 2022 an
nual de
ﬁned b
eneﬁ
t pensi
on and
pos
t
-re
tirem
ent cos
ts are d
etail
ed bel
ow
. This i
nform
ation ha
s been d
etermi
ned by ta
king i
nto acc
ount the du
ratio
n of the lia
biliti
es
and t
he overa
ll proﬁ
le of the pl
an mem
bers
hips
.
0.25%
increase
£m
0.25%
decrease
£m
Discount rate
(Decrease)/increase in annual pension cost
(19)
17
Increase/(decrease) in annual post-retirement beneﬁts cost
1
(1)
(Decrease)/increase in pension obligation
(729)
772
(Decrease)/increase in post-retirement beneﬁts obligation
(3
4)
35
0.5%
increase
£m
0.5%
decrease
£m
(Decrease)/increase in annual pension cost
(41)
33
Increase/(decrease) in annual post-retirement beneﬁts cost
2
(2)
(Decrease)/increase in pension obligation
(1,413)
1,586
(Decrease)/increase in post-retirement beneﬁts obligation
(6
7)
73
0.25%
increase
£m
0.25%
decrease
£m
Inﬂation rate
Increase/(decrease) in annual pension cost
15
(14)
Increase/(decrease) in pension obligation
5
47
(529)
1 year
increase
£m
Life expectancy
Increase in annual pension cost
16
Increase in annual post-retirement beneﬁts cost
1
Increase in pension obligation
72
4
Increase in post-retirement beneﬁts obligation
36
1%
increase
£m
Rate of future healthcare inﬂation
Increase in annual post-retirement beneﬁts cost
1
Increase in post-retirement beneﬁts obligation
39
30. Pensions and other post-employment beneﬁts
continued
2
14
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
3
1
. O
ther pro
visi
ons
Legal
and other
disputes
£m
Major
restructuring
programmes
£m
Employee
related
provisions
£m
Other
provisions
£m
T
otal
£m
At 1 January 2021
320
860
326
253
1,7
59
Exchange adjustments
2
(18)
(8)
(4)
(28)
Charge for the year
1
17
3
83
81
119
70
0
Reversed unused
(75)
(151)
(11)
(36)
(273)
Unwinding of discount
–
2
–
–
2
Utilised
(168)
(3
89)
(65)
(28)
(65
0)
Reclassiﬁcations and other movements
–
(8)
(1)
(3)
(1
2)
T
ransfer to Pension obligations
–
(27)
–
–
(27)
At 31 December 2021
196
652
322
3
01
1,471
T
o be settled within one year
160
5
45
66
70
8
41
T
o be settled after one year
36
10
7
256
231
63
0
At 31 December 2021
196
652
322
3
01
1,471
Legal and other disputes
Th
e Group i
s involved i
n a subs
tanti
al numb
er of leg
al and ot
her
dis
putes
, inclu
ding not
iﬁc
ation of p
oss
ible cl
aims
, as set o
ut in
Note 46
, ‘Le
gal pr
ocee
dings’. Provi
sions fo
r lega
l and othe
r
dis
putes in
clude a
mount
s relati
ng to produ
ct lia
bilit
y
, anti
-trust
,
governmen
t in
vestigation
s, contract t
erminations
and self
insurance.
Th
e net cha
rge for th
e year of £
42 millio
n (inclu
ding reve
rsa
ls
and estimat
ed insurance
recoveries
)
primarily rela
ted
to
provisions
for product
liability cases, commercial disputes
and va
riou
s other gove
rnme
nt invest
igatio
ns.
Th
e disco
unt on the p
rovis
ion is £
nil in 2021 (
2020 – incre
ase
d
by £1 millio
n
). The di
scou
nt was ca
lcul
ated usin
g risk-adju
sted
pro
jected c
as
h ﬂows and r
isk-free r
ates of retu
rn.
In r
espe
ct of pr
oduct l
iabil
ity c
laims r
elated to c
er
tain pr
oduc
ts,
provision is
made when
there is
sufﬁ
cien
t hist
ory of claims
mad
e and set
tlem
ents to en
able ma
nagem
ent to make a r
eliab
le
estimate
of t
he pro
vision required
to
cover
unasser
t
ed claims.
Th
e ultimate l
iabil
ity fo
r such mat
ters m
ay var
y from th
e amoun
ts
provided and
is dependen
t upon t
he out
come of
litigation
proceedings, inv
estigations
and possible settlement
negotiatio
ns.
It i
s in the natu
re of the G
roup’s busin
ess th
at a numbe
r of
the
se mat
ters may b
e the sub
ject of n
egotia
tion an
d litiga
tion
over ma
ny year
s. Li
tigati
on proc
eedi
ngs, i
ncludi
ng the var
ious
app
eal pr
oce
dures
, of
ten take m
any year
s to reac
h reso
lution
,
and o
ut-of-cou
rt s
ettl
ement d
iscus
sio
ns can a
lso of
ten be
protracted.
Indemniﬁed disputes
will result
in a pr
ovision
charge and a
corresponding receivable.
Th
e Group i
s in potent
ial set
tle
ment dis
cus
sions i
n a numbe
r
of the d
ispute
s for whi
ch amo
unts have be
en provi
ded an
d,
ba
sed on i
ts curr
ent as
ses
smen
t of the pro
gres
s of the
se
dis
putes
, esti
mates tha
t £
1
60 m
illio
n of the amo
unt prov
ided
at 31 Dece
mber 2021 will b
e sett
led wi
thin one ye
ar
. At
3
1 De
cemb
er 202
1
, i
t was exp
ected t
hat £
4 millio
n
(2020 – £
1
3 m
illion) of the p
rovisi
on made f
or lega
l and oth
er
dis
putes w
ill be re
imbur
sed by thi
rd par
tie
s. F
or a disc
ussi
on
of le
gal is
sues
, see N
ote 46, ‘
Lega
l proc
eedin
gs’
.
Major restructuring pr
ogrammes
Dur
ing 2021
, th
e Group h
ad four ma
jor re
stru
cturi
ng
programmes in progress: the
Combined restructuring and
integ
ratio
n progr
amme a
nd the 201
8 M
ajor r
estr
uctur
ing
pro
gram
me, both o
f whic
h are now su
bsta
ntial
ly com
plete,
the Consumer Healthcare Join
t V
enture integra
tion programme
and the
Separation Preparation
programme. The pr
ogrammes
are focused p
rimarily on simpl
ifying supply chain processes,
rationalising the Group’
s manufacturing network, re
structuring
the Pharmaceuticals commercial operations, integrating
the
P
ﬁzer
consumer healthcare business and preparing for
the
sep
arati
on of GS
K into two n
ew comp
anie
s.
Restructuring pro
visions primarily
include se
verance costs
when management
has made a
formal decision
to
elimina
te
ce
rt
ain pos
itio
ns and thi
s has be
en com
munic
ated to the
gro
ups of em
ployee
s affe
cted an
d appro
priate c
onsul
tatio
n
procedures completed,
where appropriat
e. No pro
vision is
mad
e for sta
ff seve
ranc
e payme
nts that a
re paid i
mmed
iately.
Th
e disco
unt on the p
rovis
ions in
crea
sed by £2 m
illion i
n 202
1
(2020 – incre
ase
d by £2 milli
on
).
Pension au
gmentation
includes £2
7
million
relating
to
the
deﬁ
ned be
neﬁt p
lan ar
ising f
rom st
aff r
edund
anci
es, a
s shown
in No
te 30, ‘Pe
nsio
ns and oth
er post-e
mploy
ment be
neﬁt
s’
.
Employee related pr
ovisions
Employee
relat
ed pro
visions include
obligation
s for
cert
ain
med
ical b
eneﬁ
ts to dis
able
d employe
es and t
heir sp
ouse
s in
the U
S. At 31 Dece
mber 2021
, t
he provi
sion fo
r thes
e beneﬁ
ts
amo
unted to £69 m
illio
n (
2020 – £7
7 millio
n
). Othe
r empl
oyee
ben
eﬁts r
eﬂec
t a vari
ety of p
rovisi
ons for s
everan
ce cos
ts,
jub
ilee awar
ds and ot
her lon
g-ser
vi
ce ben
eﬁts
.
Gi
ven the natu
re of the
se prov
ision
s, the a
mounts a
re likel
y to
be s
ettle
d over many ye
ars
.
Other provisions
Included in o
ther pro
visions are
provisions
for on
erous
contracts, insurance pro
visions and
a number
of o
ther
provisions
including
vehicle
insurance and regu
lat
ory matters.
GS
K Ann
ual R
epor
t 2021
215
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
32
. Contingent consideration liabi
lities
The consideration
for certain acquisitions in
cludes amounts
contingent
on fut
ure e
vents
such as de
velopmen
t mileston
es or sales
per
fo
rmanc
e. Th
e Group h
as prov
ided fo
r the fai
r value of t
his con
tingen
t cons
idera
tion a
s follows:
Shionogi-
V
iiV
Healthcare
£m
Novartis
V
accines
£m
Other
£m
T
otal
£m
At 1 January 20
19
5,937
29
6
53
6,28
6
Remeasurement through income statement
31
67
(15)
83
Cash payments: operating cash ﬂows
(
767)
(13)
–
(780)
Cash payments: investing activities
(98)
(11)
(4)
(1
1
3)
Other movements
–
–
3
3
At 31 December 20
19
5,1
03
33
9
37
5,47
9
Remeasurement through income statement
1,114
161
–
1,
275
Cash payments: operating cash ﬂows
(751)
(14)
–
(765)
Cash payments: investing activities
(1
07)
(9)
(4)
(1
20)
At 31 December 2020
5,359
477
33
5,86
9
Remeasurement through income statement
1,026
32
5
1,0
63
Cash payments: operating cash ﬂows
(7
21)
(21)
–
(7
42)
Cash payments: investing activities
(1
05)
(9)
–
(1
14)
At 31 December 2021
5,559
479
38
6,076
Of t
he cont
ingent c
onsi
derat
ion payab
le at 3
1 Dec
embe
r 202
1
, £
958 mi
llion (2020 – £7
65 mil
lion) is expe
cted to be p
aid wi
thin
one ye
ar
.
Th
e consi
derat
ion payab
le for th
e acqui
sitio
n of the Shi
onogi
-
Vii
V Hea
lthc
are joi
nt venture a
nd the N
ovar
tis V
acc
ines bu
sine
ss
is ex
pecte
d to be paid ove
r a numbe
r of year
s. As a r
esul
t, the tot
al est
imated li
abili
ties ar
e disc
ounted to th
eir pre
sent va
lues
,
show
n above. T
he Shi
onogi
-
Vii
V Hea
lthca
re con
tinge
nt cons
ider
ation li
abilit
y is di
scou
nted at 8% (2020 – 8.
5%
) and the
Nova
rti
s V
acci
nes co
ntinge
nt cons
ider
ation li
abili
ty is di
scou
nted at 7
.
5% (
2020– 8
%
) for com
merc
ialis
ed pro
ducts a
nd at
8.
5% (2020 – 9%
) for pip
eline a
sset
s.
The Shionogi-
ViiV Healthcare and
Novartis V
accines
contingent
consideration l
iabilities are
calculated
principally based on
the
fore
ca
st sal
es per
for
manc
e of spe
ciﬁ
ed pro
ducts ove
r the live
s of thos
e produ
cts.
Th
e table b
elow sh
ows on an in
dicat
ive bas
is the in
come s
tateme
nt and ba
lanc
e sheet s
ensi
tivit
y to rea
sona
bly po
ssib
le cha
nges
in key in
puts to the va
luatio
ns of the c
onting
ent con
side
ration l
iabil
ities
.
2021
2020
Increase/(decr
ease) in ﬁnancial liability and loss/(gain)
in Income statement
Shionogi-
ViiV
Healthcare
£m
Novartis
V
accines
£m
Shionogi-
V
iiV
Healthcare
£m
Novartis
V
accines
£m
1
0% increase in sales forecasts*
506
61
515
80
1
0% decrease in sales forecasts*
(50
6)
(57)
(516)
(78)
1% increase in discount rate
(1
98)
(38)
(20
7)
(3
9)
1% decrease in discount rate
2
13
45
223
45
1
0 cent appreciation of US Dollar
3
43
1
305
4
1
0 cent depreciation of US Dollar
(29
9)
(4)
(262)
(2)
1
0 cent appreciation of Euro
10
2
28
125
30
1
0 cent depreciation of Euro
(85)
(27)
(1
05)
(24)
* The sales forecast is for V
iiV Healthcare sales only in respect of the Shionogi-ViiV Healthcare contingent consideration.
An ex
plan
ation of th
e acco
unting fo
r Vii
V Heal
thca
re is set o
ut on pag
e 5
7
.
216
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
33
. Ot
her n
on-
curr
ent liabil
ities
2021
£m
2020
£m
Accruals
13
41
Deferred income
85
21
Other payables
823
74
1
921
8
03
Ot
her payab
les in
clude
s a numbe
r of empl
oyee-r
elated l
iabili
ties i
nclud
ing emp
loyee sav
ings pl
ans.
3
4. C
ontingent liabilities
At 3
1 De
cemb
er 202
1
, contin
gent li
abili
ties wh
ere GS
K has a p
rese
nt obli
gation a
s a res
ult of a pa
st event
, comp
risi
ng guar
antee
s
and o
ther item
s aris
ing in th
e norma
l cour
se of bu
sines
s, a
mounted to £1
26 mi
llion (2020 – £1
38 m
illio
n
). Thes
e conti
ngent
lia
biliti
es ar
ise wh
ere the G
roup ha
s a pre
sent ob
ligati
on ari
sing fr
om a pas
t event. At 31 Dec
embe
r 202
1
, £
0.2 mi
llion (2020
– £0
.4 milli
on
) of ﬁn
ancia
l ass
ets were p
ledg
ed as c
ollater
al for co
ntinge
nt liab
iliti
es. P
rovis
ion is ma
de for the o
utcom
e of ta
x, le
gal
and o
ther dis
putes w
here i
t is both pr
obab
le that the G
roup w
ill suf
fer a
n out
ﬂow of fu
nds and i
t is pos
sibl
e to make a reli
able
es
timate of th
at out
ﬂow. At 3
1 Dece
mber 2021
, other tha
n for tho
se disp
utes wh
ere prov
isio
n has be
en mad
e, if it i
s not pos
sibl
e t
o
me
aning
fully a
sse
ss whe
ther th
e outcom
es will r
esul
t in a prob
able o
utﬂ
ow
, or to quan
tif
y or reli
ably e
stim
ate the liab
ilit
y
, if any, no
prov
isio
n is rec
orded
. Des
cript
ions of th
e signi
ﬁca
nt leg
al and oth
er dis
putes to wh
ich the G
roup is a p
ar
ty ar
e set out i
n Note 46,
‘Legal proceedings’
.
35
. C
ommitment
s
Contractual obligations and commitments
2021
£m
2020
£m
Contracted for but not provided in the ﬁnancial statements:
Intangible assets
1
2,0
82
12,307
Property
, plant and equipment
6
16
528
Investments
146
153
Purchase commitments
484
74
6
Pensions
44
88
Interest on loans
7
,6
03
8,30
9
Future ﬁnance charges on leases
15
3
18
0
21,1
28
22,311
The commitments
relat
ed to
intangible
assets include m
ilestone
payments, which
are dependent
on successful clinical de
velopment
or on m
eeting s
peci
ﬁed s
ale
s targ
ets, a
nd whic
h repr
esent t
he ma
ximu
m that would b
e paid i
f all mil
eston
es, howeve
r unlike
ly
, are
ach
ieved. T
he amou
nts are n
ot risk-adj
usted or d
isco
unted. T
he net de
crea
se in in
tangi
ble as
set c
ommitm
ents in 2021 is ma
inly
at
tribu
table to t
he termi
nation o
f a number o
f agree
ments i
nclud
ing the ter
minati
on of the ag
reem
ent for bi
ntrafu
sp alf
a with M
erck
KGa
A
, Darm
stad
t, Ge
rmany of
fs
et by an inc
rea
se in a num
ber of new R&
D col
labor
ation
s includ
ing wit
h Alec
tor
, iT
eos Th
erap
eutic
s
and Lifemine Therapeutics
.
In 201
8, GS
K reac
hed an ag
reem
ent with t
he trus
tees of th
e UK pe
nsio
n schem
es to make ad
ditio
nal co
ntrib
utions to e
limina
t
e the
pen
sion d
eﬁci
t identi
ﬁed at t
he 3
1 Dec
embe
r 20
1
7 actua
rial f
undin
g valuati
on. A paym
ent of £
44 mil
lion is d
ue in 2022. Th
e tabl
e
above i
nclud
es this c
ommi
tment
, but excl
udes th
e norm
al ongo
ing annu
al fund
ing req
uirem
ent in the U
K of ap
proxim
ately £1
1
0
million.
Th
e Group a
lso ha
s other c
ommi
tments w
hich pr
inci
pally r
elate to reven
ue payme
nts to be mad
e under l
icen
ces an
d other a
llian
ces
.
Co
mmitm
ents in r
espe
ct of fu
ture inter
est p
a
yabl
e on loa
ns are di
sclos
ed bef
ore ta
king i
nto acco
unt the ef
fec
t of inter
est rate
swaps
.
GS
K Ann
ual R
epor
t 2021
2
17
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
3
6. Share capit
al a
nd share premi
um account
Ordinary Shares of 25p each
Share
premium
Number
£m
£m
Share capital issued and fully paid
At 1 January 20
19
5,37
9,06
7
,624
1,345
3,0
91
Issued under employee share schemes
4,034,6
0
7
1
50
Ordinary shares acquired by ES
OP T
rusts
–
–
33
At 31 December 20
19
5,383,1
02,231
1,34
6
3,1
7
4
Issued under employee share schemes
2,0
8
7
,386
–
29
Ordinary shares acquired by ES
OP T
rusts
–
–
78
At 31 December 2020
5,385,189,617
1,3
46
3,281
Issued under employee share schemes
1,825,442
1
20
Ordinary shares acquired by ES
OP T
rusts
–
–
–
At 31 December 2021
5,387
,0
15,05
9
1,3
4
7
3,30
1
31 December 2021
000
31 December 2020
000
Number of shares issuable under employee share schemes
75,21
0
48,205
Number of unissued shares not under option
4,537
,
7
75
4,566,605
At 3
1 De
cemb
er 202
1
, of the is
sued sh
are c
apit
al, 23,
205,
289 sha
res wer
e held in t
he ESOP Trusts
, 355
,205,
950 sh
ares we
re
hel
d as T
reas
ur
y shar
es and 5,
008
,603
,820 sh
ares we
re in fr
ee iss
ue. Al
l issu
ed sha
res ar
e fully p
aid. T
he nomi
nal, c
arr
ying a
nd
mar
ket value
s of the s
hare
s held in th
e ESOP T
rus
ts are d
isclo
sed in N
ote 44, ‘
Empl
oyee sha
re sche
mes’
.
37
. Mov
ements in equit
y
Ret
ained e
arni
ngs and o
ther re
ser
ves a
mounted to £1
0,407 milli
on at 3
1 De
cemb
er 202
1 (
2020 – £9,9
60 mill
ion; 20
1
9 –
£6
,88
5 milli
on
) of whi
ch £47
6 milli
on (2020 – £44
0 millio
n
; 20
1
9 – £
394 m
illio
n
) related to a
sso
ciates a
nd join
t venture
s.
Th
e cumulat
ive tra
nslati
on excha
nge in eq
uity i
s as foll
ows:
Net translation exchange included in:
Retained
earnings
£m
Fair value
reserve
£m
Non-
controlling
interests
£m
T
otal
translation
exchange
£m
At 1 January 20
19
381
1
(52)
33
0
Exchange movements on overseas net assets and net investment hedges
(83
0)
(2)
(75)
(9
0
7)
Reclassiﬁcation of exchange movements on liquidation or disposal of overseas subsidiaries
(75)
–
–
(75)
At 31 December 20
19
(524)
(1)
(127)
(652)
Exchange movements on overseas net assets and net investment hedges
(51)
(8)
(3
4)
(93)
Reclassiﬁcation of exchange movements on liquidation or disposal of overseas subsidiaries
36
–
–
36
At 31 December 2020
(539)
(9)
(161)
(709)
Exchange movements on overseas net assets and net investment hedges
(23
9)
–
(20)
(259)
Reclassiﬁcation of exchange movements on liquidation or disposal of overseas subsidiaries
and associates
(25)
–
–
(25)
At 31 December 2021
(803)
(9)
(181)
(9
93)
218
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e analy
sis of oth
er com
prehe
nsive in
come by e
quit
y categ
or
y is as fol
lows:
2021
Retained
earnings
£m
Other
reserves
£m
Non-
controlling
interests
£m
T
otal
£m
Items that may be subsequently reclassiﬁed to income statement:
Exchange movements on overseas net assets and net investment hedges
(239)
–
–
(239)
Reclassiﬁcation of exchange movements on liquidation or disposal of overseas subsidiaries
and associates
(25)
–
–
(25)
Fair value movements on cash ﬂow hedges
–
5
–
5
Reclassiﬁcation of cash ﬂow hedges to income and expense
–
12
–
12
T
ax on fair value movements on cash ﬂow hedges
–
(8)
–
(8)
Items that will not be reclassiﬁed to income statement:
Exchange movements on overseas net assets of non-controlling interests
–
–
(20)
(20)
Fair value movements on equity investments
–
(911)
–
(91
1)
T
ax on fair value movements on equity investments
–
131
–
13
1
Remeasurement losses on deﬁned beneﬁt plans
941
–
–
941
T
ax on remeasurement losses in deﬁned beneﬁt plans
(223)
–
–
(223)
Other comprehensive (expense)/income for the year
454
(7
71)
(20)
(337)
2020
Retained
earnings
£m
Other
reserves
£m
Non-
controlling
interests
£m
T
otal
£m
Items that may be subsequently reclassiﬁed to income statement:
Exchange movements on overseas net assets and net investment hedges
(51)
(8)
–
(59)
Reclassiﬁcation of exchange movements on liquidation or disposal of overseas subsidiaries
36
–
–
36
Fair value movements on cash ﬂow hedges
–
(19)
–
(1
9)
Reclassiﬁcation of cash ﬂow hedges to income and expense
–
54
–
54
T
ax on fair value movements on cash ﬂow hedges
–
(18)
–
(18)
Items that will not be reclassiﬁed to income statement:
Exchange movements on overseas net assets of non-controlling interests
–
–
(3
4)
(34)
Fair value movements on equity investments
–
1,3
48
–
1,3
48
T
ax on fair value movements on equity investments
–
(220)
–
(220)
Remeasurement losses on deﬁned beneﬁt plans
(18
7)
–
–
(18
7)
T
ax on remeasurement losses in deﬁned beneﬁt plans
69
–
–
69
Other comprehensive (expense)/income for the year
(133)
1,137
(34)
970
2
0
19
Retained
earnings
£m
Other
reserves
£m
Non-
controlling
interests
£m
T
otal
£m
Items that may be subsequently reclassiﬁed to income statement:
Exchange movements on overseas net assets and net investment hedges
(830)
(2)
–
(832)
Reclassiﬁcation of exchange movements on liquidation or disposal of overseas subsidiaries
(75)
–
–
(75)
Fair value movements on cash ﬂow hedges
–
(20)
–
(20)
Reclassiﬁcation of cash ﬂow hedges to income and expense
–
3
–
3
T
ax on fair value movements on cash ﬂow hedges
–
16
–
16
Items that will not be reclassiﬁed to income statement:
Exchange movements on overseas net assets of non-controlling interests
–
–
(75)
(75)
Fair value movements on equity investments
–
372
–
372
T
ax on fair value movements on equity investments
–
(95)
–
(95)
Remeasurement gains on deﬁned beneﬁt plans
(1,050)
–
–
(1,050)
T
ax on remeasurement gains in deﬁned beneﬁt plans
18
9
–
–
18
9
Other comprehensive (expense)/income for the year
(1,
766)
2
74
(75)
(1,5
6
7)
In
formati
on on net i
nvestm
ent hed
ges is p
rovide
d in par
t (d) of Note 43 ‘
Fina
ncia
l instr
ument
s and rel
ated dis
closu
res’
.
37
. Movements in equity
continued
GS
K Ann
ual R
epor
t 2021
219
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e analy
sis of oth
er res
er
ves is a
s follows:
ES
OP T
rust
shares
£m
Fair value
reserve
£m
Cash ﬂow
hedge reserve
£m
Other
reserves
£m
T
otal
£m
At 1 January 20
19
(161)
14
0
(4
7)
2,129
2,061
Exchange adjustments
10
–
–
–
10
T
ransferred to Ret
ained earnings in the year on disposal of equity investments
–
5
–
–
5
Net fair value movement in the year
–
264
(1)
–
263
Ordinary shares acquired by ES
OP T
rusts
(328)
–
–
–
(328)
W
rite-down of shares held by ESO
P T
rusts
344
–
–
–
344
At 31 December 20
19
(135)
409
(48)
2,129
2,3
55
Exchange adjustments
20
–
–
–
20
T
ransferred to Ret
ained earnings in the year on disposal of equity investments
–
(207)
–
–
(207)
Net fair value movement in the year
–
1,1
00
17
–
1,1
1
7
Ordinary shares acquired by ES
OP T
rusts
(60
9)
–
–
–
(6
09)
W
rite-down of shares held by ESO
P T
rusts
529
–
–
–
529
At 31 December 2020
(195)
1,3
02
(31)
2,129
3,205
Exchange adjustments
(1)
–
–
–
(1)
T
ransferred to Ret
ained earnings in the year on disposal of equity investments
–
(139)
–
–
(1
39)
Net fair value movement in the year
–
(780)
10
–
(7
70)
T
ransferred to income and expense in the year on impairments of equity investments
168
–
–
–
16
8
At 31 December 2021
(28)
3
83
(21)
2,129
2,4
63
Other reser
v
es include
various n
on-distributable merger
and pre-merger reserves amounting
to
£
1
,849 million a
t 3
1 December
202
1 (2020 – £
1
,
849 mil
lion; 20
1
9 – £1
,849 m
illio
n
). Othe
r rese
rve
s also i
nclud
e the ca
pita
l redem
ption r
eser
ve cr
eated a
s a resul
t
of the s
hare b
uy-ba
ck prog
ramm
e amoun
ting to £280 m
illion at 31 Dec
emb
er 202
1 (
2020 – £280 mi
llion; 20
1
9 – £280 mill
ion).
3
8. N
on-
controll
ing interests
T
otal non-controllin
g int
erests includes
the fol
lowing
individually ma
terial
non-controlling
int
erests. Other non-controlli
ng int
erests
are individually
not ma
terial.
ViiV Healthcare
GS
K hold
s 7
8.
3% of the V
iiV H
ealt
hcar
e sub-
group, gi
ving r
ise to a mater
ial no
n-co
ntroll
ing inter
est. S
umma
rise
d ﬁnanc
ial
info
rmati
on in re
spec
t of the Vii
V He
althc
are su
b-gr
oup is as f
ollows:
2021
£m
2020
£m
20
19
£m
T
urnover
4,637
4,84
8
4,816
Proﬁt after tax
ation
1,087
76
2
2,5
7
4
Other comprehensive income/(expense)
(1
7)
33
(29)
T
otal comprehensive income
1,070
79
5
2,545
2021
£m
2020
£m
Non-current assets
2
,79
6
2,5
64
Current assets
2,
71
1
2,405
T
otal assets
5,5
0
7
4,969
Current liabilities
(3,1
21)
(2,
7
48)
Non-current liabilities
(8,4
72)
(8,343)
T
otal liabilities
(1
1,593)
(11,0
91)
Net liabilities
(6,08
6)
(6,122)
2021
£m
2020
£m
20
19
£m
Net cash inﬂow from operating activities
2,1
28
2,24
9
2,3
75
Net cash outﬂow from investing activities
(28
7)
(29
4)
(202)
Net cash outﬂow from ﬁnancing activities
(1,6
08)
(2,4
83)
(1,9
4
7)
(Decrease)/increase in cash and bank overdrafts in the year
233
(528)
226
37
. Movements in equity
continued
22
0
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e above ﬁna
ncia
l infor
mation r
elates to th
e ViiV H
eal
thca
re grou
p on a sta
nd-al
one ba
sis, b
efore th
e impac
t of Gro
up-r
elated
adjustments, primarily
relat
ed to
the
recognition of
preferential
dividends. The proﬁt a
fter taxation of £
1
,087
million
(
20
20
–
£7
62 milli
on
; 201
9 – £2,
5
7
4 mil
lion) is state
d afte
r charg
ing pre
ferent
ial div
iden
ds payabl
e to GSK
, Shi
onogi a
nd P
ﬁzer a
nd af
ter a
charge of
£
1
,
2
1
8 m
illion (
2020 –
£
1
,
1
1
2 million
; 20
1
9 – £37
million
) for remeasurement of
contingent
consideration
pay
able. This
co
nside
ratio
n is expe
cted to be pa
id over a num
ber of ye
ars
.
Th
e followi
ng amou
nts att
ribut
able to th
e ViiV H
eal
thca
re group a
re inc
luded i
n GSK
’
s Fin
anci
al state
ments:
2021
£m
2020
£m
20
19
£m
Share of proﬁt for the year attributable to non-controlling interest
19
6
223
4
82
Dividends paid to non-controlling interest
224
419
3
10
Non-controlling interest in the Consolidated balance sheet
(570
)
(53
9)
(34
4)
Consumer Healthcare Joint V
entur
e
GS
K hold
s 68% of th
e Cons
umer H
ealth
car
e sub-
group, gi
ving r
ise to a mater
ial non
-co
ntrolli
ng intere
st. S
ummar
ised ﬁ
nanc
ial
info
rmati
on in re
spec
t of the C
onsume
r Hea
lthc
are sub
-gro
up is as fo
llows:
2021
£m
2020
£m
20
19
£m
T
urnover
9,545
9,837
4,24
0
Proﬁt after tax
ation
1,439
1,219
15
0
Other comprehensive expenses
(1
0)
(266)
(7
21)
T
otal comprehensive income/(expenses)
1,429
953
(571)
2021
£m
2020
£m
Non-current assets
29,200
29,134
Current assets
5,251
4,918
T
otal assets
34,4
51
3
4,052
Current liabilities
(4,238)
(4,254)
Non-current liabilities
(3,7
33)
(3,8
90)
T
otal liabilities
(7
,971)
(8,144)
Net assets
26,48
0
25,90
8
2021
£m
2020
£m
20
19
£m
Net cash inﬂow from operating activities
1,35
6
1,419
1,014
Net cash inﬂow/(outﬂow) from investing activities
(33)
1,018
(
776
)
Net cash outﬂow from ﬁnancing activities
(1,236)
(2,437)
(78)
Increase in cash and bank overdraft in the year/period
87
–
160
Th
e above ﬁna
ncia
l infor
mation r
elates to th
e Con
sumer H
ealt
hcar
e Joint Ventur
e on a sta
nd-al
one ba
sis (20
1
9 – fo
r the per
iod
fro
m its for
mation o
n 3
1 July 201
9 to D
ecem
ber 201
9), befor
e the imp
act of Gr
oup-
related a
djust
ments a
nd the cl
ass
iﬁc
ation of
ca
sh poo
ling ac
count
s with G
roup co
mpani
es out
side th
e Cons
umer H
ealt
hcar
e Joint Ventur
e but af
ter Ma
jor re
struc
turin
g
charges.
Th
e followi
ng amou
nts att
ribut
able to th
e Cons
umer H
ealt
hcar
e Joint Ventur
e are inc
luded i
n GSK
’s ﬁnanc
ial st
atement
s
:
2021
£m
2020
£m
20
19
£m
Share of proﬁt for the year/period attributable to non-controlling interest
460
3
74
69
Dividends paid to non-controlling interest
3
67
73
5
–
Non-controlling interest in the Consolidated balance sheet
6,60
9
6,53
8
6,911
38. Non-controlling interests
continued
GS
K Ann
ual R
epor
t 2021
221
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
39. Related par
ty t
ran
sact
ion
s
Dur
ing the ye
ar
, the G
roup dis
pose
d of its in
teres
t in Innov
iva In
c. See N
ote 2
1 for det
ails of d
ispo
sal. T
he royal
ties d
ue from G
SK
to Inn
oviva in th
e year un
til the date o
f dispo
sal we
re £
1
1
3 mill
ion (2020 – £26
1 millio
n
).
A loa
n of £4
.6 milli
on (
2020 – £
3.0 mil
lion) to Medi
cxi V
entu
res I LP r
emain
ed due to GS
K at 3
1 Dec
emb
er 202
1
. I
n 202
1
, GSK
inc
rea
sed the i
nvestme
nt in Kur
ma Biof
und I
I, F
CPR by £
0.2 mi
llion a
nd Med
icxi Venture
s I LP of £1
.0 millio
n. As pa
rt o
f the join
t
ventu
re agre
ement w
ith Qu
ra The
rap
eutic
s LLC, the G
roup h
as an ob
ligati
on to fund th
e joint ve
nture up to A
pril 2025, w
ith both
GS
K and it
s joint ven
ture par
tn
er comm
itti
ng ﬁna
ncial s
uppo
rt in t
he amou
nt of $26 milli
on. At De
cem
ber 202
1
, the out
stan
ding
lia
bilit
y due to Q
ura wa
s $
1
3 m
illion
.
Ca
sh dis
tribu
tions wer
e rec
eived fr
om our inve
stme
nts in Me
dicxi Ventur
es I LP of £
5.
5 millio
n, in Lo
ngwoo
d Found
ers Fun
d, LP
of £
3.0 m
illion a
nd in Ap
ollo Th
erap
eutic
s LL
P of £0.
1 milli
on.
Th
e aggre
gate comp
ens
ation of th
e Dire
ctors a
nd GL
T is give
n in Note 9, ‘
Empl
oyee cos
ts’
.
40
. Acquis
itions and di
sposals
Det
ails of t
he acqu
isiti
on and di
spos
al of si
gniﬁ
cant s
ubsi
diari
es and a
sso
ciates
, join
t venture
s and oth
er busi
ness
es ar
e given be
low:
2021
Business acquisitions
GS
K comp
leted no m
ateria
l busin
ess ac
quis
itions i
n 202
1
.
Business disposals
GS
K made a nu
mber of b
usine
ss di
spos
als for n
et cas
h cons
ider
ation re
cei
ved in the ye
ar of £1
0 mi
llion
. The pr
oﬁt on th
e disp
osal
of the b
usine
sse
s in the ye
ar of £24 milli
on was c
alcul
ated as fo
llows:
T
otal
£m
Consideration:
Cash consideration including currency forwards, purchase adjustments and deferred consideration
10
T
otal
10
Net assets sold:
Property
, plant and equipment
3
Cash and cash equivalents
1
Other net assets
1
T
otal
5
Costs:
Deal costs
(16)
Reclassiﬁcation of exchange from other comprehensive income
35
Gain on disposals in 2021
24
Associates and joint ventures
On 20 M
ay 202
1 GSK a
greed w
ith In
noviva
, Inc (“
Inn
oviva”) to sel
l all of its a
pprox
imately 32 m
illion s
hare
s of com
mon stoc
k of
In
noviva ba
ck to Inn
oviva at a pr
ice of $1
2
.25 per s
hare
, rais
ing gro
ss pro
cee
ds of app
roximate
ly $3
92 millio
n. Foll
owing s
ettl
ement
of the t
rans
actio
n, GS
K will no l
onger h
old any I
nnoviva s
tock
. See de
tail
s in Note 21 ‘Inve
stme
nt in as
soci
ates and j
oint ventu
res’
.
Cash ﬂows
Business
disposals
£m
Associates
and joint
ventures
disposals
£m
Cash consideration received
43
2
77
Net deferred consideration paid
(51)
–
T
rans
action costs
(8)
–
Cash and cash equivalents (divested)/acquired
(1)
–
Cash (outﬂow)/inﬂow
(17)
2
77
222
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
2020
Business acquisitions
GS
K comp
leted on
e small
er bus
ines
s acqui
sitio
n when i
t acqui
red 55% o
f Pﬁ
zer Bi
otech C
orpo
ration T
aiw
an, a pa
rt of P
ﬁ
zer’s
consumer healthcare business, which w
as not
previously recognised
as part of the Consumer
Healthcare Joint V
enture, on
28 Sep
tember 2020 fo
r non ca
sh co
nside
ratio
n of £
1
29 mi
llion
. This r
epre
sented g
oodw
ill of £1
24 millio
n, ca
sh of £21 milli
on
and o
ther as
sets a
cquir
ed of £1
8 mi
llion l
ess no
n-co
ntroll
ing inter
est of £1
4 mi
llion a
nd net lia
bilit
ies of £20 m
illion
.
T
otal
£m
Net assets acquired:
Intangible assets
2
Property
, plant and equipment
5
Inventory
5
T
rade and other receivables
6
Cash and cash equivalents
21
T
rade and other payables
(20)
19
Non-controlling interest
(14)
Goodwill
124
129
Non-cash consideration (settlement of a promissory note)
129
T
otal consideration
129
Business disposals
On 1 A
pril 2020, G
SK co
mplete
d its dive
stme
nt of Hor
lick
s and othe
r Cons
umer H
ealt
hcar
e nutri
tion pr
oduct
s in Indi
a and a
numb
er of oth
er coun
tries (exclu
ding Ba
nglad
esh) to Unileve
r and the m
erger o
f GSK
’
s Ind
ian lis
ted Co
nsume
r Hea
lthca
re enti
ty
wit
h Hindu
stan U
nilever, an In
dian li
sted pub
lic co
mpany. GSK r
ecei
ved a 5.7% equi
ty st
ake in Hi
ndust
an Unil
ever and £
395 m
illio
n
in c
ash. G
SK di
spos
ed of its e
quit
y stake i
n Hindu
stan U
nilever d
uring M
ay 2020.
Th
e dives
tment in B
angl
adesh c
lose
d on 30 Ju
ne 2020. T
ot
al ca
sh co
nside
ratio
n rece
ived wa
s £
1
7
7 mill
ion.
Th
e cas
h dives
ted as pa
rt of t
he disp
osa
l of the In
dia and B
angla
desh C
ons
umer He
alth
care e
ntitie
s was £
4
78 millio
n.
Th
e proﬁt o
n the dis
pos
al of the bu
sine
sse
s in the yea
r of £2,795 milli
on was c
alcu
lated as f
ollows:
Horlicks
divestment
£m
Other
£m
T
otal
£m
Consideration:
Cash consideration receivable including currency forwards and purchase adjustments
4
92
1
57
649
Equity investment in Hindustan Unilever Limited
3,124
–
3,124
T
otal
3,616
1
57
3
,
773
Net assets disposed:
Goodwill
142
1
143
Intangible assets
15
10
3
118
Property
, plant and equipment
56
12
68
Inventory
–
6
6
Cash and cash equivalents
478
3
4
81
Other net (liabilities)/assets
(155)
1
(15
4)
T
otal
536
126
6
62
Costs:
T
rans
action costs
12
28
40
Derivative
240
–
240
Reclassiﬁcation of exchange from other comprehensive income
36
–
36
T
otal
288
28
316
Gain on disposals
2,
7
92
3
2,
795
40. Acquisitions and disp
osals
continued
GS
K Ann
ual R
epor
t 2021
223
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e expos
ure to sha
re pri
ce movem
ents emb
edde
d in the ag
reeme
nt to merg
e GSK
’
s Ind
ian lis
ted Co
nsume
r Hea
lthca
re enti
ty
wit
h Hindu
stan U
nilever L
imited a
s par
t of th
e dives
tment of H
orli
cks and o
ther nut
ritio
n produ
cts in I
ndia an
d a numbe
r of other
cou
ntrie
s was re
cogn
ised a
s a deri
vative be
twee
n signi
ng of the agr
eeme
nt in 201
8 an
d compl
etion o
f the tra
nsac
tion in 2020.
£240 mill
ion is re
cord
ed as a c
ost in th
e tabl
e above for t
he dere
cogn
ition of t
he deri
vative a
sset
. This l
arge
ly reﬂ
ects fa
ir valu
e
gains recognised in
the Income
Statemen
t in
prior periods.
Associates and joint ventures
Dur
ing the ye
ar
, GS
K made inve
stme
nts into as
soc
iates of £
4 milli
on and £
4 mill
ion was p
aid in c
ash
.
Cash ﬂows
Business
acquisitions
£m
Business
disposals
£m
Associates
and joint
ventures
investments
£m
Cash consideration received/(paid)
–
78
6
(4)
Net deferred consideration
–
(19)
–
T
rans
action costs
(6)
(27)
–
Cash and cash equivalents acquired/(divested)
21
(481)
–
Cash inﬂow/(outﬂow)
15
25
9
(4)
2
0
19
Business acquisitions
Pﬁzer consumer healthcare business
Th
e acqui
sitio
n of P
ﬁzer
’
s cons
umer he
alth
care b
usine
ss co
mplete
d on 3
1 July 201
9
.
GS
K and P
ﬁze
r have contr
ibute
d their re
spe
ctive c
onsum
er hea
lthca
re bus
ines
ses in
to a new Con
sumer H
eal
thcar
e Joint Ventur
e
in a no
n-ca
sh tra
nsac
tion
, where
by GSK h
as ac
quired P
ﬁ
zer’s con
sumer h
ealt
hcar
e busin
ess i
n return f
or shar
es in the J
oint
V
entur
e. GS
K has an e
quit
y intere
st of 68
% and ma
jori
ty co
ntrol of th
e Joint Ventur
e and P
ﬁze
r has an e
quit
y intere
st of 32%
.
As th
e Group h
as co
ntrol over t
he Co
nsume
r Heal
thca
re Join
t V
e
nture i
t is cons
olid
ated with
in the Gr
oup’
s ﬁna
ncia
l statem
ents.
In a nu
mber of te
rrito
ries
, leg
al comp
letio
n of the ac
quisi
tion ha
s not oc
curre
d bec
ause of r
egula
t
or
y con
stra
ints. H
owever
, the
Co
nsume
r Hea
lthc
are Joi
nt V
enture o
btai
ned con
trol of th
e major
ity o
f thes
e busin
ess
es in the
se terr
itori
es fro
m 3
1 J
uly 201
9
and h
as co
nsoli
dated the n
et ass
ets of tho
se bus
ines
ses f
rom that d
ate, but in a
ll ca
ses is e
ntitle
d to the ben
eﬁts o
f the trad
ing
of bu
sines
ses i
n the del
ayed terr
itorie
s.
The non-controlling i
nterest in
the Consumer Healthcare Joint V
enture, calculated applying t
he proportionate goodwill
method,
rep
rese
nts P
ﬁzer
’
s sha
re of the n
et ass
ets of the J
oint Venture
, exclud
ing goo
dwill
.
Go
odwi
ll of £3
.9 bil
lion, w
hich i
s not expe
cted to be d
educt
ible fo
r ta
x purpo
ses
, has b
een re
cogni
sed. T
he goo
dwill r
epre
sents
the p
otentia
l for fur
ther s
ynerg
ies ar
isin
g from co
mbini
ng the ac
quire
d busin
ess
es wit
h GSK
’
s exis
ting bu
sines
s togeth
er wit
h the
valu
e of the wor
kfor
ce ac
quire
d. T
ot
al tra
nsac
tion co
sts re
cogni
sed in 201
8 and 20
1
9 for the ac
quisi
tion am
ounted to £77 milli
on.
Sin
ce acq
uisit
ion on 31 July 201
9, s
ale
s of £
1
.2 bill
ion ar
ising f
rom the P
ﬁ
zer con
sumer h
ealth
car
e busin
ess have b
een inc
lude
d in
Gr
oup turn
over
. If the b
usine
ss ha
d been ac
quire
d at the be
ginnin
g of the yea
r
, it is es
timated t
hat Gro
up turnove
r in 20
1
9 wo
uld
have be
en app
roximate
ly £
1
.5 bil
lion hig
her
. Th
e busin
ess ha
s bee
n integr
ated into the G
roup’s exist
ing act
iviti
es and i
t is not
pr
actic
able to i
dentif
y the i
mpac
t on the Gr
oup pro
ﬁt in the p
erio
d.
T
esaro Inc.
On 22 Ja
nuar
y 201
9, GS
K acq
uired 100% o
f T
es
aro I
nc., a
n oncol
ogy foc
used b
iopha
rmac
eutic
al co
mpany, for ca
sh co
nside
ratio
n
of $
5.0 bil
lion (£3
.9 bil
lion), in orde
r to stren
gthen th
e Grou
p
’s pharm
aceu
tica
l pipel
ine. T
rans
acti
on cos
ts amou
nted to £31 mill
ion.
Go
odwi
ll of £
1
.2 bil
lion, n
one of wh
ich is ex
pecte
d to be ta
x-ded
uctib
le, ha
s been r
eco
gnise
d. The g
oodw
ill rep
rese
nts the
poten
tial fo
r fur
ther sy
nergi
es ari
sing fr
om com
bining t
he acqu
ired bu
sine
sse
s with GS
K’s exi
sting bu
sine
ss toget
her wi
th the valu
e
of the wo
rk
force a
cquir
ed. Fro
m acqui
siti
on on 22 Janu
ar
y 20
1
9 to 31 Dec
ember 201
9, sale
s of £0
.2 bill
ion ari
sing f
rom the T
esa
ro
bus
ines
s have bee
n inclu
ded in G
roup tur
nover
. The b
usine
ss ha
s bee
n integra
ted into the G
roup’s exist
ing acti
viti
es and i
t is not
pr
actic
able to i
dentif
y the i
mpac
t on the Gr
oup pro
ﬁt in the p
erio
d.
40. Acquisitions and disp
osals
continued
22
4
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e fair val
ue of the a
sset
s acqui
red in bu
sine
ss co
mbinati
ons, i
nclud
ing goo
dwill
, are se
t out in th
e table b
elow. Amo
unts rel
ated to
the Pﬁzer consumer healthcare business acquisit
ion are pro
visional and
subject t
o change.
Pﬁzer
consumer
healthcare
business
£m
T
esaro
£m
Other
£m
Net assets acquired:
Intangible assets
12,35
7
3,092
–
Property
, plant and equipment
354
6
–
Right of use assets
39
40
–
Inventory
986
162
–
T
rade and other receivables
546
115
35
Other assets including cash and cash equivalents
302
25
4
16
T
rade and other payables
(779
)
(282)
(39)
Net deferred tax liabilities
(2,591)
(252)
–
Other liabilities
(9
9)
(5)
–
T
erm loan
–
(4
45)
–
Non-controlling interest
(3,5
7
7)
–
–
Goodwill
3,854
1,16
9
–
T
otal
11,392
3,85
4
12
Consideration settled by shares in GS
K Consumer Healthcare Joint V
enture
11,3
92
–
–
Cash consideration paid
–
3,85
4
6
Fair value of investment in joint venture converted into subsidiary
–
–
6
T
otal consideration
11,3
92
3,85
4
12
Th
e non-c
ontro
lling inte
rest o
f £3
,5
77 millio
n repre
sent
s Pﬁ
zer’s sha
re of the f
air valu
e of the P
ﬁze
r cons
umer he
althc
are b
usine
ss,
exclu
ding go
odwi
ll. Th
e t
ota
l non-c
ontro
lling in
teres
t initia
lly re
cogni
sed in t
he Con
solid
ated sta
tement of c
hange
s in equ
ity of
£6
,887 mill
ion al
so incl
udes P
ﬁ
zer’s shar
e of the bo
ok value o
f GSK C
onsu
mer He
althc
are
.
Business disposals
GS
K made a nu
mber of b
usine
ss di
spos
als for n
et cas
h cons
ider
ation re
cei
ved in the ye
ar of £1
0
4 millio
n. The p
roﬁt o
n the
dis
posa
l of the bu
sine
sse
s in the yea
r of £20
1 mill
ion was c
alc
ulated a
s follows:
£m
T
otal
£m
Cash consideration receivable net of subsidy payable
10
6
Net assets disposed:
Goodwill
(4)
Intangible assets
(1)
Property
, plant and equipment
(4
4)
Inventory
(7)
Cash and cash equivalents
(12)
Other net assets
(4)
(7
2)
T
rans
action costs
(27)
Reclassiﬁcation of exchange from other comprehensive income
75
Non-controlling interest divested
16
98
T
rans
action signed but not yet completed – gain on embedded derivative
143
T
rans
action signed but not yet completed – transaction costs
(40)
T
otal proﬁt on dispos
al
201
40. Acquisitions and disp
osals
continued
GS
K Ann
ual R
epor
t 2021
225
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
T
ransaction signed but not yet completed at 31 December 201
9
In D
ecem
ber 201
8
, GSK a
gree
d t
o dive
st Ho
rlick
s and othe
r Con
sumer H
ealt
hcar
e nutri
tion br
ands to U
nilever
P
LC
and to fo
rm
a mer
ger of G
la
xoSmi
thK
line C
onsum
er Hea
lthc
are Li
mited wi
th Hind
usta
n Unileve
r Limite
d for a total c
onsi
derat
ion valu
ed at
approximat
ely £3.
1 billion. GlaxoSmithK
li
ne Consumer Healthcare Limit
ed was a
public
company l
isted on
the
National St
ock
E
xchan
ge (NS
E) and B
ombay Sto
ck E
xchang
e (BSE
), in whi
ch GS
K held a 72.
5% stake
. Follow
ing the m
erger o
f Gla
xoS
mith
Kline
Co
nsume
r Hea
lthc
are Lim
ited wi
th Hindu
stan U
nilever L
imite
d, a publ
ic comp
any lis
ted on the N
SE and B
SE
, GS
K would own
1
33.
8 milli
on Hind
usta
n Unileve
r Limite
d shar
es.
Th
e Group e
ntered i
nto for
ward fo
reign exc
hang
e contr
acts in r
elatio
n to the tra
nsac
tion. C
ontr
acts w
ith a valu
e of £
1
.
7 billi
on
were d
esig
nated as a c
ash ﬂ
ow hedg
e of par
t of the f
oreig
n expos
ure ar
ising o
n the tra
nsac
tion. F
urt
her co
ntrac
ts with a va
lue of
£0
.6 billi
on were de
sign
ated as ne
t investm
ent hed
ges ag
ainst I
NR a
nd EUR a
sset
s. In a
dditio
n, the ex
posu
re to shar
e pric
e
movem
ents in th
e for
ward pu
rcha
se of sh
ares in H
indu
stan U
nilever L
imited we
re rec
ognis
ed as a
n embe
dded de
rivati
ve. The
emb
edde
d deri
vative wa
s in an as
set po
sitio
n and had a f
air val
ue of £240 milli
on at 3
1 Dec
embe
r 20
1
9 (20
1
8 – £
1
0
0 milli
on
).
Associates and joint ventures
Dur
ing the ye
ar
, GS
K made inve
stme
nts of £27 milli
on into as
soc
iates an
d joint ven
tures of w
hich £1
1 m
illio
n was pai
d in ca
sh.
Cash ﬂows
Business
acquisitions
£m
Business
disposals
£m
Associates
and joint
venture
investments
£m
Cash consideration (paid)/received
(3,8
60)
161
(11)
Net deferred consideration received
–
29
–
T
rans
action costs
(95)
(73)
–
Cash and cash equivalents acquired/divested
384
(13)
–
Cash (outﬂow)/inﬂow
(3,5
71)
10
4
(11)
4
1
. Adjustment
s reconcil
ing proﬁt af
ter tax to operating cash ﬂows
2021
£m
2020
£m
20
19
£m
Proﬁt after tax
5,0
96
6,3
88
5,268
T
ax on proﬁts
346
580
953
Share of after-tax proﬁts of associates and joint ventures
(33)
(33)
(7
4)
Finance expense net of ﬁnance income
75
6
848
814
Depreciation
1,1
9
5
1,214
1,231
Amortisation of int
angible assets
1,1
82
1,13
7
1,1
03
Impairment and assets written off
540
78
1
825
Proﬁt on sale of businesses
(38)
(2,831)
(20
1)
Proﬁt on sale of int
angible assets
(5
68)
(426)
(3
42)
Loss on sale of investments in associates
36
–
–
Proﬁt on sale of equity investments
(8)
(6
9)
(2)
Business acquisition costs
–
–
59
Changes in working capital:
Decrease in inventories
25
119
300
Increase in trade receivables
(7
82)
(224)
(32)
Increase in trade payables
284
225
263
(Increase) in other receivables
(31
4)
(15
9)
(160)
Contingent consideration paid (see Note 32)
(7
42)
(765)
(7
80)
Other non-cash increase in contingent consideration liabilities
1,063
1,275
83
Increase in other payables
1,324
818
89
Increase/(decrease) in pension and other provisions
(34
0)
400
(18
8)
Share-based incentive plans
3
67
3
81
365
Fair value adjustments
(1
7)
464
19
Other
(1
29)
(27)
(61)
4,1
4
7
3
,7
0
8
4,264
Cash generated from operations
9,243
1
0,0
96
9,532
40. Acquisitions and disp
osals
continued
22
6
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
42
. R
econciliation of net cash ﬂo
w to mo
v
ement in ne
t debt
2021
£m
2020
£m
20
19
£m
Net debt, as previously reported
(20,780)
(25,215)
(21,621)
Implementation of I
FR
S 16
–
–
(1,3
03)
Net debt at beginning of year
, as adjusted
(20,
7
80)
(25,215)
(22,924)
Increase in cash and bank overdrafts
(1,41
4)
470
826
Increase/(decrease) in liquid investments
(1
8)
1
(1)
Increase in long-term loans
–
(3,298)
(4,
7
94)
Repayment of short-term Notes
2,31
3
3
,7
3
8
4,160
Repayment of/(increase in) other short-term loans
(31
8)
3,5
6
7
(3,0
95)
Repayment of lease liabilities
2
15
227
214
Debt of subsidiary undertakings acquired
–
–
(524)
Exchange adjustments
3
14
(135)
1,0
15
Other non-cash movements
(1
5
0)
(135)
(92)
Movement in net debt
942
4,435
(2,291)
Net debt at end of year
(1
9,83
8)
(20,
7
80)
(25,215)
Analysis of changes in net debt
At 1 January
2021
£m
Exchange
£m
Other
£m
Interest
expense
£m
Change
in fair value
£m
Reclass-
iﬁcations
£m
Cash ﬂow
£m
At
31 December
2021
£m
Liquid investments
78
1
–
–
–
–
(18)
61
Cash and cash equivalents
6,292
(29)
(1)
–
–
–
(1,98
8)
4,27
4
Overdrafts
(1,030)
–
–
–
–
–
5
74
(45
6)
5,262
(29)
(1)
–
–
–
(1,414)
3,818
Debt due within one year:
Commercial paper
(17)
8
–
–
–
–
(243)
(252)
European/
US MTN & Bank facilities
(2,35
0)
1
–
–
–
(2,49
4)
2,247
(2,596)
Lease liabilities
(230)
5
7
–
–
(200)
215
(203)
Other
(9
8)
15
(2)
–
–
–
(9)
(94)
(2,695)
29
5
–
–
(2,69
4)
2,21
0
(3,145)
Debt due after one year:
European/
US MTN & Bank facilities
(22,53
8)
306
–
(22)
–
2,494
–
(1
9,
7
60)
Lease liabilities
(887)
7
(132)
–
–
200
–
(81
2)
(23,425)
313
(132)
(22)
–
2,69
4
–
(20,5
72)
Net debt
(20,
7
8
0)
314
(128)
(22)
–
–
778
(1
9,83
8)
Interest payable
(247)
–
(3
0)
(753)
–
–
78
6
(244)
Derivative ﬁnancial instruments
(7
4)
–
–
–
72
–
(20)
(22)
T
otal liabilities from ﬁnancing activities*
(26,441)
342
(157)
(7
75)
72
–
2
,
976
(23,983)
* Excluding cash and cash equivalents, overdrafts and liquid investments.
GS
K Ann
ual R
epor
t 2021
227
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Analysis of changes in net debt
At 1 January
2020
£m
Exchange
£m
Other
£m
Interest
expense
£m
Change
in fair value
£m
Reclass-
iﬁcations
£m
Cash ﬂow
£m
At
31 December
2020
£m
Liquid investments
79
–
–
–
–
–
(1)
78
Cash and cash equivalents
4
,
707
(44)
–
–
–
–
1,629
6,292
Cash and cash equivalents - AH
FS
5
07
–
–
–
–
–
(507)
–
Overdrafts
(383)
5
–
–
–
–
(652)
(1,03
0)
4,831
(3
9)
–
–
–
–
470
5,262
Debt due within one year:
Commercial paper
(3,58
6)
(50)
–
–
–
–
3,619
(17)
European/
US MTN and Bank facilities
(2,65
8)
38
–
–
–
(3,4
68)
3
,7
3
8
(2,350)
Lease liabilities
(240)
(4)
16
–
–
(229)
227
(23
0)
Other
(51)
12
(7)
–
–
–
(52)
(98)
(6,535)
(4)
9
–
–
(3,6
9
7)
7
,532
(2,695)
Debt due after one year:
European/
US MTN & Bank facilities
(22,58
0)
(1
0
4)
(4)
(20)
–
3,4
68
(3,298)
(22,538)
Lease liabilities
(1,0
1
0)
19
(125)
–
–
229
–
(887)
(23,59
0)
(85)
(129)
(20)
–
3,6
9
7
(3,298)
(23,425)
Net debt
(25,215)
(128)
(120)
(20)
–
–
4,
703
(20,
780)
Interest payable
(24
4)
1
–
(86
8)
–
–
864
(24
7)
Derivative ﬁnancial instruments
335
–
–
–
(290)
–
(119)
(7
4)
T
otal liabilities from ﬁnancing activities*
(3
0,034)
(8
8)
(120)
(88
8)
(29
0)
–
4
,
979
(26,441)
* Excluding cash and cash equivalents, overdrafts and liquid investments.
For further information on signiﬁcant changes in net debt see Note 29, ‘Net debt’.
42. Adjustments of net cash ﬂow to movement in net debt
continued
22
8
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e objec
tive of GS
K’s T
reas
ur
y activ
ity i
s to minimi
se the
pos
t
-ta
x net c
ost of ﬁn
anci
al oper
ation
s and red
uce it
s volatili
ty
to ben
eﬁt e
arnin
gs and c
ash ﬂ
ows. GS
K use
s a varie
ty of
ﬁna
ncia
l instr
ument
s t
o ﬁna
nce it
s oper
ations a
nd der
ivative
ﬁnancial instruments
to
manage mark
et risks
from these
operations. Derivat
ives principally
comprise of
foreign e
xchange
for
war
d contr
acts a
nd swaps w
hich a
re use
d t
o swap
bor
rowin
gs and li
quid a
ssets i
nto curr
encie
s requ
ired fo
r Group
pur
pose
s as well a
s inter
est ra
t
e swap
s whic
h are us
ed to
manage exposure
to
ﬁnancial risks from
changes in
interest
rate
s. Th
ese ﬁn
anci
al inst
rumen
ts redu
ce the un
cer
tai
nty of
foreign cu
rrency transactions
and int
erest pa
yments.
De
rivati
ves are u
sed excl
usive
ly for hed
ging pu
rpos
es in
rel
ation to un
derly
ing bus
ines
s acti
vitie
s and not a
s trad
ing or
speculat
ive
instrumen
ts.
Capit
a
l management
GSK’s ﬁnancial
strat
egy su
pports the Group
’
s
strat
egic
pri
orit
ies an
d is regu
larly r
eviewe
d by the Boa
rd. GS
K man
ages
the c
apit
al str
uctur
e of the Gr
oup thro
ugh an ap
propr
iate mix o
f
deb
t and equ
ity.
Th
e capi
tal st
ructu
re of the G
roup co
nsis
ts of net de
bt of
£1
9.
8 billi
on (
see N
ote 29, ‘Ne
t debt
’) and tota
l equit
y
, inc
luding
items rela
ted
to
non-controllin
g int
erests, of £2
1
.3 billion
(
see
‘C
onsol
idated s
tateme
nt of cha
nges in e
quit
y’ on pa
ge 1
70
).
T
o
tal ca
pita
l, inc
luding t
hat provi
ded by no
n-co
ntrolli
ng
interests, is
£4
1
.
1 billion.
Th
e Group c
ontinu
es to man
age its ﬁ
nanci
al pol
icie
s to a credi
t
pro
ﬁle that p
ar
ticul
arly t
arget
s shor
t-term cr
edit ra
tings of A-
1
and P
-
1 whil
e maint
aini
ng singl
e A long-ter
m ratin
gs con
sisten
t
wit
h those t
arge
ts. Th
e Grou
p
’s long-ter
m cred
it ratin
g with
Standard &
Poor’
s
is A
(
stable o
utlook)
and with
Moody’
s
Inve
stor Se
rv
ices (‘
Moo
dy’s’) it is A
2 (
stab
le outl
ook). Th
e
Gr
oup’
s shor
t-term cr
edit r
atings a
re A-
1 an
d P-
1 wi
th Stan
dard
& Poor’
s
and Moody’
s
respectively
.
Liquidit
y risk manage
ment
GS
K’s poli
cy is to bor
row cen
trall
y in orde
r to meet an
ticip
ated
fun
ding re
quirem
ents
. The st
rategy i
s to diver
sif
y liqui
dit
y
sou
rces u
sing a r
ange of f
acilit
ies an
d to maint
ain bro
ad acc
ess
to ﬁna
ncia
l market
s. Ea
ch day, we sweep c
ash to or f
rom a
numb
er of glo
bal su
bsidi
arie
s and c
entra
l T
re
asur
y ac
count
s for
liquidity mana
gement p
urposes. GSK utilises bo
th ph
ysical and
notional
cash pool arrangemen
ts as appr
opriat
e by
location
and
cur
rency. For n
otiona
l cas
h pool
s, liq
uidit
y is dr
awn agai
nst
fore
ign cur
renc
y bala
nces to p
rovide b
oth loc
al fun
ding and
central l
iquidity as
required
and
with balan
ces activ
ely m
anaged
and m
ainta
ined to a
pprop
riate level
s. As b
alan
ces in n
otiona
l
pooling
arrangements are
not
settled across
currencies, gross
ca
sh and ove
rdraf
t ba
lanc
es are r
epor
ted
.
At 3
1 De
cemb
er 202
1
, GSK ha
d £3
.6 billi
on of bor
rowin
gs
rep
ayable w
ithin on
e year an
d held £
4.
3 billio
n of ca
sh and
ca
sh equ
ivale
nts and li
quid inve
stmen
ts of whi
ch £2.9 b
illio
n
was h
eld ce
ntral
ly
.
GS
K has ac
ces
s to shor
t-term ﬁn
ance u
nder a $1
0 billio
n
(
£7
.4 billion
) US
commercial paper programme
;
$nil (
£nil)
was
in is
sue at 31 Dec
embe
r 202
1 (2020 – $25 mil
lion (£1
7
mill
ion)
). GSK ha
s acc
ess to s
hor
t
-term ﬁ
nanc
e under a £
5
billion E
uro commercial paper
programme
;
€
30
0 millio
n (
£252
mill
ion) was in is
sue at 31 Dec
ember 2021 (2020 – £nil). At 31
De
cemb
er 202
1
, GSK ha
d a £
1
.
9 billi
on thre
e-yea
r commi
tted
fac
ilit
y and a $2.
5 billi
on (£
1
.
9 billi
on
) 364-
day com
mitte
d
fac
ilit
y
. The thr
ee-ye
ar co
mmit
ted faci
lity w
as agre
ed in
Sep
tember 201
9, exte
nded by on
e year in S
eptemb
er 2020
and wa
s ex
tended a
gain by o
ne year to 2024 in Augu
st 202
1
.
Th
e 364-d
ay comm
itted f
acili
ty wa
s agree
d in Augus
t 202
1
.
Th
ese co
mmit
ted fac
ilitie
s were un
drawn at 31 Dec
embe
r
202
1
. GSK c
onsi
ders th
is level of c
ommi
tted fa
ciliti
es to be
adequat
e, giv
en cu
rrent liq
uidity requiremen
ts.
In preparation f
or the
separation o
f the
Consumer Healthcare
bus
ines
s, in F
ebru
ar
y 202
2 GS
K canc
elle
d and re
place
d the
thr
ee year a
nd 364 day f
acili
ties
. New revol
ving cr
edit f
acilit
ies
of eq
uivale
nt size we
re agre
ed with m
aturit
ies in S
eptemb
er
2025 and S
eptemb
er 2023.
GS
K has a £20
.0 billi
on Euro M
ediu
m T
er
m Note pro
gram
me
and at 31 Dec
embe
r 202
1
, £1
0.5 bi
llion of n
otes were i
n issu
e
und
er this pr
ogra
mme. T
he Gro
up also h
ad $1
5.7 bill
ion
(£
1
1.6 billio
n
) of notes i
n issu
e at 3
1 Dece
mber 2021 unde
r a
US shelf registra
tion. GSK’s
borrowings
mature
at da
tes
bet
ween 2022 a
nd 2045
.
Th
e put opti
on owne
d by Pﬁ
zer in V
iiV He
alth
care i
s
exercisable. In re
viewing
liquidity requiremen
ts GSK considers
that s
uf
ﬁcie
nt ﬁnan
cing op
tions ar
e availa
ble sho
uld the pu
t
option be
exercised.
Market risk
Interest rate risk management
Th
e objec
tive of GS
K’s T
reas
ur
y activ
ity i
s to minimi
se the
ef
fect
ive net inte
rest c
ost a
nd to bala
nce the m
ix of de
bt at ﬁxed
and ﬂ
oating r
ates over ti
me.
Th
e Group’s main i
nteres
t rate ri
sk ari
ses fr
om bor
rowing
s and
inves
tment
s with ﬂo
ating r
ates and r
eﬁna
ncing of m
aturin
g ﬁxed
rate de
bt whe
re any cha
nges i
n intere
st rates w
ill af
fect f
uture
ca
sh ﬂows o
r the fai
r value
s of ﬁnan
cial i
nstru
ments
. The po
licy
on in
t
ere
st rate r
isk ma
nageme
nt limi
ts the net a
mount of
ﬂoa
ting rate d
ebt to a spe
ciﬁc c
ap, rev
iewed an
d agree
d no
le
ss than a
nnua
lly by the B
oard
.
Th
e major
ity o
f debt is i
ssue
d at ﬁxed i
nteres
t rates a
nd
cha
nges i
n the ﬂoat
ing rate
s of intere
st do not s
igni
ﬁca
ntly
affect the Group
’
s ne
t int
erest charge. This
includes some
bor
rowin
gs for wh
ich inter
est r
ate swaps a
re in pla
ce whi
ch
rem
oves the im
pact o
f the as
soci
ated per
iodic r
epri
cing.
Sho
rt-term b
orrow
ings in
cludi
ng bank f
acilit
ies ar
e expos
ed to
the r
isk of fu
ture cha
nges i
n marke
t intere
st rate as a
re the
maj
orit
y of ca
sh and l
iquid i
nvestme
nts.
43
. Financi
al instrument
s and relate
d disclos
ures
GS
K Ann
ual R
epor
t 2021
229
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Interest rate benc
hmark r
eform
‘
Intere
st rate b
enchm
ark re
form – Am
endme
nts to IF
RS 9, I
AS
39, I
FRS 4
, IFR
S 7 and I
FRS 1
6’ Pha
se I an
d Phas
e II we
re
is
sued by th
e IAS
B in Septe
mber 201
9 a
nd Augus
t 2020, and
ado
pted by the U
K Endo
rsem
ent Bo
ard on 5 Ja
nuar
y 2021
.
Ph
ase I of th
e amen
dment mo
diﬁ
es spe
ciﬁ
c hedge a
ccou
nting
req
uirem
ents to all
ow hedg
e acco
unting to c
ontinu
e for
af
fecte
d hedge
s duri
ng the pe
riod of u
ncer
ta
inty b
efore t
he
hed
ged ite
ms or hed
ging ins
trum
ents af
fecte
d by the cur
rent
inter
est r
ate bench
mark
s are am
ended a
s a res
ult of the
ongoing in
terest rat
e bench
mark reforms. Phase II also provides
that,
for
ﬁnancial
instrumen
ts measured
using
amortised cost
me
asur
ement
, chang
es to the ba
sis fo
r determ
ining th
e
contractual cash ﬂows
required
by in
terest rat
e bench
mark
refo
rm sho
uld be re
ﬂec
ted by adju
sting th
eir ef
fect
ive inter
est
rate a
nd no imme
diate ga
in or los
s shou
ld be re
cogni
sed.
The Group has closely monit
ored the mark
et and t
he output
from the various industry working groups managing the
transition t
o ne
w benchmark in
terest ra
tes. This incl
udes
announcements made by LIBO
R
regulators, including the
Fi
nanci
al Co
nduct A
uthor
ity (F
CA) and th
e US Co
mmodi
ty
Futures T
rading Commission, regarding
the t
ransition a
wa
y
fro
m LIB
OR (inc
ludin
g GBP L
IBO
R
, USD L
IBO
R and
EUR
I
BOR) to the S
t
erl
ing Ove
rnigh
t Index Aver
age Ra
te
(SON
IA), the S
ecur
ed Over
night F
inan
cing Ra
t
e (SOF
R),
and t
he Euro S
hor
t
-
T
erm R
ate (
€ST
R) res
pecti
vely.
At 3
1 De
cemb
er 202
1
, the Gro
up was not d
irect
ly expo
sed
to inter
est ra
te bench
mark r
eform a
s it hel
d no intere
st rate
der
ivative
s or ﬂoa
ting rate d
ebt that re
feren
ced to L
IBO
R. T
he
Gr
oup did no
t trans
ition a
ny materi
al deri
vative
s or ﬂoati
ng rate
deb
t into a new ind
ex as all o
f the ins
trume
nts refe
renci
ng
LI
BOR m
atured b
efore D
ecem
ber 2021
.
For
eign exc
hange risk management
Th
e Group’s obje
ctive i
s to minimi
se the exp
osur
e of overs
eas
ope
rating s
ubsi
diar
ies to tra
nsac
tion r
isk by match
ing loc
al
cur
rency i
ncom
e with lo
cal cu
rren
cy cos
ts wher
e pos
sible
.
Foreign currency
transaction exposures
arising on e
xternal
and i
nterna
l trade ﬂ
ows are s
elec
tively h
edge
d. GS
K’s intern
al
trading t
ransactions are ma
tched
centrally and
inter
-compan
y
payment
terms are
managed t
o reduce
foreign
currency risk.
Wh
ere pos
sibl
e, GS
K manag
es the c
ash s
urplu
ses or
borrowing
requirement
s of
subsidiary companies centrally
usi
ng for
ward c
ontra
cts to hed
ge futu
re repay
ments b
ack
into
the originating
currency
.
In order t
o reduce f
oreign currency
translation
exposure, t
he
Gr
oup see
ks to deno
minate bo
rrowi
ngs in the c
urre
ncie
s of
our p
rinci
pal as
sets a
nd ca
sh ﬂows
. The
se are p
rimar
ily
den
ominate
d in US Do
llar
s, Eur
os and Ster
ling
. Borr
owings
ca
n be swap
ped into ot
her cur
renci
es as r
equir
ed.
Bo
rrowin
gs deno
minated i
n, or swa
pped in
to, forei
gn
cur
renci
es that m
atch inves
tments i
n overs
eas G
roup a
ssets
may be t
reated a
s a hedg
e again
st the re
levant a
sset
s. For
wa
rd
co
ntrac
ts in maj
or curr
encie
s are a
lso use
d to reduc
e expo
sure
to the G
roup’s investm
ent in over
sea
s as
sets (see ‘N
et
inves
tment h
edge
s’ secti
on of thi
s note for fur
the
r deta
ils
).
Credit risk
Cr
edit ri
sk is the r
isk tha
t a counter
par
t
y will def
ault on i
ts
contractual obliga
tions
resulting in
ﬁnancial loss t
o the
Group
and a
rise
s on ca
sh and c
ash e
quiva
lents a
nd favoura
ble
derivat
ive
ﬁnancial
instrumen
ts h
eld wit
h banks
and ﬁn
ancial
ins
tituti
ons as we
ll as cr
edit ex
posur
es to who
lesa
le and r
etail
customers, including outstanding receivables
.
Th
e Group c
onsi
ders i
ts ma
ximu
m credi
t risk at 31 Dec
embe
r
202
1 to be £1
1
,4
1
7 millio
n (
3
1 Dec
embe
r 2020 – £
1
2,
5
7
2
mill
ion) which i
s the tota
l of the Gr
oup’
s ﬁna
ncial a
ss
ets with
the exc
eptio
n of ’Oth
er inves
tment
s
’ (
com
pris
ing equi
ty
inves
tment
s
) which b
ear eq
uit
y risk r
ather tha
n cred
it ris
k.
Se
e page 232 for de
tail
s on the Gr
oup’
s total ﬁ
nanc
ial as
sets
.
At 3
1 De
cemb
er 202
1
, GSK
’
s gre
atest co
ncen
tratio
n of
cre
dit ri
sk was £
0.9 bil
lion wi
th a whol
esa
ler in th
e US
(2020 - £
1
.
4 billi
on with L
egal a
nd Gen
eral I
nvestm
ent
Ma
nagem
ent Cl
ass 4 G
BP li
quidit
y fun
d (A
A
A
/
Aaa)).
Se
e page 230 fo
r fur
ther in
format
ion on th
e Group’s cre
dit
ris
k expo
sure in r
espe
ct of the t
hree la
rges
t US who
les
aler
customers.
Th
ere ha
s been no c
hang
e in the es
timati
on techn
iques o
r
signiﬁcant assumptions made
during t
he current
reporting
per
iod in a
sse
ssi
ng the lo
ss allo
wance fo
r ﬁnan
cial a
sset
s at
amo
rti
sed c
ost or at F
V
TOC
I sinc
e the ado
ption of I
FR
S 9 at
the s
tar
t of the 201
8 r
epor
tin
g peri
od.
T
reasury-r
elated cr
edit risk
GS
K sets gl
obal c
ounter
par
ty li
mits for e
ach of G
SK’s ba
nkin
g
and i
nvestme
nt cou
nterpa
rti
es ba
sed on l
ong-ter
m credi
t
rati
ngs fro
m Moo
dy’s and St
andar
d and Poo
r’s. Us
age of the
se
limits is
actively
monit
ored.
GSK actively mana
ges its e
xposure t
o credit risk, reducing
sur
plus c
ash b
alanc
es wh
erever po
ssi
ble. T
his is pa
rt of G
SK
’
s
str
ategy to re
giona
lise c
ash ma
nagem
ent and to c
once
ntrate
ca
sh ce
ntral
ly as muc
h as po
ssib
le. Th
e tabl
e below s
ets out
the c
redit ex
posu
re to coun
terpa
rti
es by rati
ng for liq
uid
inves
tment
s, ca
sh and c
ash e
quiva
lents a
nd deri
vative
s.
Th
e gros
s ass
et posi
tion on e
ach de
rivati
ve contr
act is
co
nside
red for th
e purp
ose of th
is tabl
e, alt
hough
, under I
SDA
agr
eemen
ts, the a
mount at r
isk is t
he net po
sitio
n with e
ach
cou
nterpa
rt
y. T
abl
e (
e
) o
n page 240 set
s out the G
roup’s
ﬁna
ncia
l ass
ets and li
abili
ties o
n an of
fset b
asis
.
43. Financial instruments and related disclosur
es
continued
23
0
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
GS
K’s cent
rall
y manag
ed ca
sh res
er
ves amo
unted to
£2.
9 billi
on at 3
1 Dec
embe
r 202
1
, a
ll availab
le with
in thre
e
mon
ths. T
his inc
ludes £1
.
7 bill
ion of c
ash ma
naged by t
he
Gr
oup for Vi
iV He
althc
are
, a 7
8.
3% own
ed subs
idia
ry a
nd
£0
.
7 billio
n of ca
sh man
aged by the G
roup fo
r GSK C
onsu
mer
He
althc
are
, a 68% own
ed sub
sidia
ry. The G
roup h
as inves
ted
ce
ntrall
y mana
ged liq
uid as
sets in b
ank de
posit
s, Aa
a
/
A
A
A
rated
US T
reasur
y and
T
reasur
y repo on
ly mone
y market
funds
and A
aa
/A
AA r
ated liq
uidit
y fund
s.
Wholesale and r
etail credit risk
Out
side th
e US, n
o custom
er acc
ounts for m
ore tha
n 5% of
the Group
’
s
trade receivables balance.
In th
e US, i
n line wi
th other p
harma
ceut
ical c
ompa
nies
, the
Group sells its
products through
a small nu
mber of wholesalers
in addit
ion t
o hospitals, p
harmacies, phy
sicians and
other
gro
ups. S
ales to t
he thre
e large
st wh
oles
aler
s amou
nted to
app
roxim
ately 75% (
2020 – 79%
) of the s
ale
s of the US
Ph
armac
euti
cals a
nd V
acc
ines bu
sine
sse
s in 202
1
.
At 3
1 De
cemb
er 202
1
, the Gro
up had tr
ade rec
eivab
les du
e
fro
m thes
e three w
hole
sale
rs tota
lling £2
,430 m
illion o
r 39% of
tota
l trade r
ecei
vable
s (
2020 – £2,
362 milli
on or 43
%
). T
he
Gr
oup is exp
osed to a c
once
ntrati
on of cre
dit ri
sk in re
spec
t of
these wholesaler
s
such tha
t, if one or
more of
them encount
ers
ﬁna
ncia
l dif
ﬁcul
ty, it cou
ld materi
ally a
nd adver
sel
y affe
ct the
Group’
s ﬁnancial results.
Th
e Group’s cre
dit ris
k monito
ring ac
tivit
ies re
lating to th
ese
who
les
aler
s inclu
de a revi
ew of their q
uar
terl
y ﬁnanc
ial
info
rmati
on and St
anda
rd & Poor
’
s cred
it rati
ngs, d
evelopm
ent
of GS
K inter
nal ri
sk ratin
gs, a
nd est
ablis
hment a
nd per
iodic
review
of c
redit lim
its.
All n
ew custom
ers a
re subj
ect to a cre
dit vet
ting pr
oce
ss and
exi
sting cu
stomer
s will b
e subje
ct to a revi
ew at lea
st annu
ally.
Th
e vettin
g proc
ess a
nd subs
eque
nt review
s involve obt
ainin
g
info
rmati
on incl
uding th
e custom
er’s statu
s as a gover
nment o
r
privat
e sect
or en
tity
, aud
ited
ﬁnancial stat
ements,
credit bur
eau
reports, debt rating
agency
(
e.g. Moody’s, Standard
& P
oor’
s
)
reports
,
payment
performance history (
from trade
references,
industr
y
credit groups
) and
bank references.
43. Financial instruments and related disclosur
es
continued
At 3
1 De
cemb
er 202
1
, £
54 mi
llion (2020 – £
4
7 m
illion) of ca
sh is c
ategor
ised a
s held w
ith unr
ated or su
b-inves
tment g
rade r
ated
cou
nterpa
rt
ies (lowe
r than B
BB-/
Baa
3
) of whi
ch £7 milli
on (
2020 – £1 millio
n
) is ca
sh in tra
nsit
. The re
maini
ng expo
sure is
co
ncent
rated in over
sea
s bank
s used f
or loc
al ca
sh mana
geme
nt or inves
tment pu
rpos
es, i
nclud
ing: £
1
9 m
illion i
n Nige
ria he
ld with
Uni
ted Ban
k for Afri
ca
, Zenit
h Bank
, Acc
ess B
ank an
d Stanb
ic IB
T
C Ban
k; £1
4 milli
on with H
alk B
ank in the U
K; £2 mi
llion w
ith BT
V
in Au
stria; £
2 millio
n in Arg
entina h
eld wi
th Banc
o de la N
acion a
nd Ban
co de la P
rovinc
ia; £2 mil
lion wi
th J T
r
ust Royal B
ank in
Ca
mbodi
a; £
1 milli
on with P
rodu
banc
o in Ecua
dor; £1 millio
n with B
anco C
entr
al de Ho
ndura
s in Ho
ndura
s; £
1 milli
on with B
A
C
San Jos
é
in Pan
ama an
d £
1 milli
on with B
anco Po
pular i
n Puer
to Ri
co. O
f the £7
7 mill
ion of ba
nk bal
ance
s and dep
osit
s held w
ith
BB
B/B
aa ra
t
ed c
ounterp
ar
ties
, £25 mill
ion was h
eld wi
th BB
B-/Ba
a3 ra
ted coun
t
er
par
ties
, incl
uding b
alanc
es or d
eposi
ts of
£24 milli
on with H
DF
C Bank in I
ndia
. The
se ba
nks are u
sed for l
oca
l investm
ent pur
pose
s.
GS
K mea
sure
s expec
ted cre
dit los
ses ove
r cas
h and ca
sh eq
uivale
nts as a f
uncti
on of indi
vidu
al coun
terpa
rt
y cred
it rati
ngs and
as
soci
ated 1
2 m
onth def
ault rate
s. E
xpe
cted cr
edit lo
sse
s over ca
sh and c
ash e
quiva
lents an
d third
-par
t
y ﬁnanc
ial de
rivati
ves are
dee
med to be i
mmateri
al and n
o such lo
ss ha
s been ex
peri
ence
d durin
g 202
1
.
Cr
edit rat
ings ar
e ass
igne
d by Stand
ard & Poo
r’s and Mo
ody’s re
spec
tively. Wh
ere the op
inion
s of the t
wo rating a
genci
es dif
fer,
GS
K ass
igns th
e lower rat
ing of the t
wo to the co
unterp
ar
ty. Wher
e loca
l ratin
g agency o
r Fitch d
ata is th
e only so
urce avai
labl
e,
the r
atings a
re conve
rted to g
lobal r
ating
s equiva
lent to tho
se of St
andar
d & Poor’s or M
oody
’
s usi
ng publi
shed c
onvers
ion ta
bles
.
Th
ese cr
edit r
atings fo
rm the ba
sis of t
he as
sess
ment of t
he expe
cted cr
edit lo
ss on T
rea
sur
y-re
lated ba
lanc
es hel
d at amor
tis
ed
cost being
bank
balances and
deposits
and Go
vernmen
t secu
rities.
2021
AAA/
Aaa
£m
AA/
Aa
£m
A
/A
£m
BBB/Ba
a
£m
B
B+/Ba1
and below
/unrated
£m
T
otal
£m
Bank balances and deposits
–
7
2,6
8
7
77
54
2,825
US T
reasury and T
reasury repo only money market funds
54
–
–
–
–
54
Liquidity funds
1,3
95
–
–
–
–
1,39
5
Government securities
–
60
–
1
–
61
3rd party ﬁnancial derivatives
–
–
200
–
–
200
T
otal
1,4
49
67
2,8
8
7
78
54
4,53
5
2020
AAA/
Aaa
£m
AA/
Aa
£m
A
/A
£m
BBB/Ba
a
£m
B
B+/Ba1
and below
/unrated
£m
T
otal
£m
Bank balances and deposits
–
10
2,575
368
47
3,000
US T
reasury and T
reasury repo only money market funds
3
17
–
–
–
–
317
Liquidity funds
2,975
–
–
–
–
2,975
Government securities
–
77
–
1
–
78
3rd party ﬁnancial derivatives
–
–
134
12
–
146
T
otal
3,292
87
2
,7
0
9
381
47
6,516
GS
K Ann
ual R
epor
t 2021
231
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
T
rade receivables consist of amou
nts due
from a
large nu
mber
of cu
stomer
s, sp
read a
cros
s diver
se indu
stri
es and
geographical areas. Ongoing credit e
valuatio
n is performed
on the
ﬁnancial condition
of accounts
receivable and,
where
appropriate,
credit insu
rance is purchased or
factoring
ar
range
ments p
ut in pla
ce.
Th
e amount o
f infor
mation o
btain
ed is pro
por
tion
al to the leve
l
of exposure
being considered. The
informat
ion is e
valua
ted
quantitativ
ely (i.
e. credit score
) and qualitativ
ely (
i.e. judgement
)
in conjunction
with t
he cust
omer’
s credit requ
irements t
o
deter
mine a c
redit l
imit.
T
rade receivables are grouped into
customer
segments that
have si
milar l
oss pat
tern
s to ass
ess cr
edit r
isk whi
le othe
r
receivables
and ot
her ﬁn
ancial assets
are assessed ind
ividually
.
Historical and f
orward-looking information is
considered t
o
dete
rmine t
he appr
opriat
e e
xpected
credit
loss allo
wance.
The Group belie
ves t
here is n
o further credit risk
provision
required
in e
xcess of
the
allow
ance f
or e
xpected
credit
losses
(
see N
ote 25, ‘T
rad
e and othe
r rec
eivabl
es’).
Credit enhancements
The Group uses credit enhancements including factoring
and c
redi
t insur
ance to mi
nimis
e the cre
dit ris
k of the tr
ade
rec
eiva
bles i
n the Gro
up. At 3
1 Dec
embe
r 202
1
, £
31
5 mil
lion
(2020 – £3
86 milli
on
) of tra
de rec
eivab
les wer
e insur
ed in
ord
er to prote
ct the re
ceiva
bles f
rom lo
ss due to cr
edit r
isks
suc
h as def
ault, i
nsolve
ncy and b
ank
ruptcy.
Ea
ch Gro
up entit
y as
ses
ses th
e cred
it risk o
f its pr
ivate
customers t
o det
ermine if
credit insu
rance is required.
Factorin
g arrangements
are man
aged locally
by
entities
and
are used t
o mitiga
te
risk arising
from large cred
it risk
concentrations. All f
actoring
arrangements are
non-recourse.
Fair value
of ﬁnancial asset
s and liabilities ex
cluding
lease liabilities
Th
e table o
n page 232 pr
esen
ts the ca
rr
ying a
mounts a
nd the
fai
r value
s of the Gr
oup’
s ﬁna
ncial a
ss
ets and li
abili
ties
exclu
ding le
ase l
iabil
ities at 31 Dec
emb
er 202
1 and
3
1 De
cemb
er 2020.
Th
e fair val
ues of th
e ﬁnanc
ial a
sset
s and lia
biliti
es are i
nclud
ed
at the p
rice t
hat would b
e rece
ived to se
ll an as
set or p
aid to
tra
nsfer a l
iabil
ity i
n an orde
rly tr
ansa
ction b
etwe
en mar
ket
participants at
the measuremen
t dat
e.
Th
e followi
ng metho
ds and a
ssu
mption
s are use
d to mea
sure
the fa
ir valu
es of sig
niﬁ
cant ﬁ
nanci
al inst
rume
nts car
rie
d at fair
valu
e on the ba
lanc
e sheet:
–
Ot
her inves
tment
s – equit
y inves
tments t
rade
d in an act
ive
mar
ket deter
mined by r
efere
nce to the r
elevant s
tock
exch
ange qu
oted bid pr
ice; othe
r equit
y inves
tment
s
deter
mine
d by refer
ence to th
e curre
nt mar
ket value of s
imila
r
ins
trume
nts, r
ecent ﬁ
nanc
ing rou
nds or the d
isco
unted ca
sh
ﬂows o
f the unde
rlyi
ng net as
sets
–
T
rade re
ceiv
able
s carr
ied at fa
ir valu
e – base
d on invoic
ed
amount
–
Interest rat
e sw
aps, foreign
exchange
forward contracts,
swap
s and opt
ions – ba
sed o
n the pre
sent va
lue of
contractual cash ﬂows
or op
tion v
aluation
models using
mar
ket sour
ced d
ata (
excha
nge rate
s or intere
st rate
s
) at the
balance sheet
dat
e
–
Ca
sh and c
ash e
quival
ents c
arri
ed at fai
r value – ba
sed o
n
net a
sset v
alue of th
e funds
–
Contingent considerat
ion for
business acquisitions
and
dive
stme
nts – bas
ed on pr
esen
t value
s of expe
cted fut
ure
cash
ﬂow
s.
Th
e followi
ng metho
ds and a
ssu
mption
s are use
d to esti
mate
the fa
ir valu
es of sig
niﬁ
cant ﬁ
nanci
al inst
rume
nts whic
h are not
me
asur
ed at fair va
lue on th
e bala
nce sh
eet:
–
Rec
eivab
les a
nd payabl
es, in
cludi
ng put opt
ions
, car
ried at
amo
rti
sed c
ost – ap
proxim
ates to the c
arr
ying a
mount
–
Li
quid inve
stment
s – appr
oximates to t
he car
ry
ing amo
unt
–
Cash and cash eq
uivalen
ts carried
at
amortised cost –
app
roxim
ates to the ca
rr
ying a
mount
–
Lon
g-term lo
ans – ba
sed on q
uoted ma
rket pri
ces (a level 1
fai
r value me
asu
remen
t
) in the c
ase o
f Europ
ean an
d US
Me
dium T
erm N
otes; appr
oximate
s to the car
ry
ing am
ount in
the c
ase of other ﬁ
xed rate b
orrow
ings an
d ﬂoatin
g rate ban
k
loans
–
Short-t
erm loans, o
verdrafts and commercial
paper –
app
roxim
ates to the ca
rr
ying a
mount b
ecau
se of the s
hor
t
matur
ity o
f thes
e instr
uments
.
43. Financial instruments and related disclosur
es
continued
232
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
2021
2020
Notes
Carrying
value
£m
Fair
value
£m
Carrying
value
£m
Fair
value
£m
Financial assets measured at amortised cost:
Other non-current assets
b
21
21
37
37
T
rade and other receivables
b
4,830
4,83
0
3,99
0
3,9
90
Liquid investments
61
61
78
78
Cash and cash equivalents
2,825
2,825
3,000
3,000
Financial assets measured at fair value through other comprehensive
income (FVT
OC
I):
Other investments designated at FVT
OCI
a
1,927
1,927
2,939
2,93
9
T
rade and other receivables
a,b
1,943
1,943
1,9
42
1,9
42
Financial assets mandatorily measured at fair value through proﬁt or loss (FVTP
L):
Other investments
a
19
9
19
9
121
121
Other non-current assets
a,b
23
23
30
30
T
rade and other receivables
a,b
59
59
46
46
Held for trading derivatives that are not in a designated and
effective hedging relationship
a,d,e
83
83
68
68
Cash and cash equivalents
a
1,44
9
1,4
49
3,292
3,292
Derivatives designated and effective as hedging instruments (fair value movements
through Other comprehensive income)
a,d,e
12
3
12
3
89
89
T
otal ﬁnancial assets
1
3,543
1
3,543
15,632
15,632
Financial liabilities measured at amortised cost:
Borrowings excluding obligations under lease liabilities:
– bonds in a designated hedging relationship
d
(4,982)
(5,31
1)
(7
,6
81)
(8,171)
– other bonds
(1
7
,37
3)
(20,7
4
6)
(17
,205)
(21,96
6)
– bank loans and overdrafts
(550)
(5
50)
(1,11
0)
(1,11
0)
– commercial paper
(252)
(252)
(17)
(17)
– other borrowings
(1)
(1)
(20)
(20)
T
otal borrowings excluding lease liabilities
f
(23,1
5
8)
(26,8
60)
(26,033)
(31,28
4)
T
rade and other payables
c
(1
5,431)
(1
5,431)
(13,
7
48)
(13,
7
48)
Other provisions
c
(1
1
3)
(1
1
3)
(232)
(232)
Other non-current liabilities
c
(52)
(52)
(72)
(72)
Financial liabilities mandatorily measured at fair value through proﬁt or loss (FVTP
L):
Contingent consideration liabilities
a,c
(6,0
76)
(6,0
7
6)
(5,869)
(5,8
69)
Held for trading derivatives that are not in a designated and
effective hedging relationship
a,d,e
(1
71)
(1
71)
(200)
(200)
Derivatives designated and effective as hedging instruments (fair value movements
through Other comprehensive income)
a,d,e
(57)
(57)
(31)
(31)
T
otal ﬁnancial liabilities excluding lease liabilities
(45,05
8)
(4
8,
7
60)
(46,185)
(51,43
6)
Net ﬁnancial assets and ﬁnancial liabilities excluding lease liabilities
(31,51
5)
(35,21
7)
(3
0,553)
(35,804)
Th
e valuati
on metho
dolo
gy use
d t
o me
asur
e fair val
ue in the a
bove tab
le is de
scrib
ed and c
ategor
ised o
n page 231
.
T
rade and other
receivables, Other non-current assets, T
rade and o
ther pa
yables, Other pro
visions, Contingent
consideration
lia
biliti
es and O
ther n
on-c
urren
t liabi
litie
s are re
conci
led to the r
elevant N
otes on p
ages 234 a
nd 235.
43. Financial instruments and related disclosur
es
continued
GS
K Ann
ual R
epor
t 2021
233
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Fair value of i
n
vest
ment
s in GSK sh
ares
At 31 Dec
ember
202
1
, th
e Empl
oyee Sha
re Ow
ner
ship P
lan (ESO
P
) T
ru
sts held GSK s
hares with a c
arr
ying value of £28 million
(2020 – £
1
9
5 millio
n
) and a ma
rket valu
e of £373 milli
on (20
20 – £6
5
7 millio
n
) base
d on quote
d market p
rice
. The s
hare
s are hel
d
by the E
SOP T
rust
s to satis
fy fu
ture exer
cise
s of opti
ons and awa
rds und
er empl
oyee inc
entive s
chem
es. I
n 202
1
, th
e car
ry
ing
valu
e, whi
ch is the l
ower of co
st or exp
ected p
roce
eds, o
f thes
e share
s has b
een re
cogni
sed a
s a deduc
tion f
rom othe
r rese
rve
s.
At 3
1 De
cemb
er 202
1
, GSK he
ld T
r
eas
ury s
hare
s at a cos
t of £4
,969 mi
llion (2020 – £4
,969 mi
llion) whic
h has b
een de
ducted
from retained
earnings.
(
a) Financ
ial inst
rument
s held a
t fair value
Th
e followi
ng tab
les ca
tegori
se the G
roup’s ﬁnanc
ial a
ssets a
nd lia
biliti
es hel
d at fair va
lue by the va
luatio
n method
olog
y appli
ed in
deter
minin
g their f
air valu
e. Whe
re pos
sibl
e, quoted p
ric
es in act
ive mar
kets are u
sed (L
evel 1
). Wher
e such p
rice
s are not ava
ilabl
e,
the a
sset o
r liab
ilit
y is cla
ssi
ﬁed a
s Level 2, p
rovide
d all sig
niﬁ
cant in
puts to the va
luati
on mode
l used a
re bas
ed on ob
ser
vabl
e
mar
ket data
. If o
ne or mor
e of the si
gniﬁ
cant i
nputs to th
e valuati
on mode
l is not ba
sed o
n obse
rva
ble mar
ket data
, the i
nstru
ment is
cla
ssi
ﬁed a
s Level 3
. Othe
r invest
ments c
las
siﬁe
d as Leve
l 3 in the ta
bles b
elow co
mpri
se equi
ty inve
stmen
ts in unli
sted ent
ities
wit
h whic
h the Gro
up has e
ntered in
to rese
arch c
olla
borati
ons and a
lso inve
stmen
ts in eme
rging li
fe sci
ence c
ompa
nies
.
At 31 December 2021
Level 1
£m
Level 2
£m
Level 3
£m
T
otal
£m
Financial assets at fair value
Financial assets measured at fair value through other comprehensive income (FVT
OC
I):
Other investments designated at FVT
OC
I
1
,7
3
6
–
191
1,92
7
T
rade and other receivables
–
1,943
–
1,943
Financial assets mandatorily measured at fair value through proﬁt or loss (FVTP
L):
Other investments
–
–
19
9
19
9
Other non-current assets
–
–
23
23
T
rade and other receivables
–
59
–
59
Held for trading derivatives that are not in a designated and effective hedging relationship
–
77
6
83
Cash and cash equivalents
1,44
9
–
–
1,44
9
Derivatives designated and effective as hedging instruments (fair value movements through OC
I)
–
123
–
12
3
3,185
2,202
419
5,80
6
Financial liabilities at fair value
Financial liabilities mandatorily measured at fair value through proﬁt or loss (FVTP
L):
Contingent consideration liabilities
–
–
(6,07
6)
(6,07
6)
Held for trading derivatives that are not in a designated and effective hedging relationship
–
(1
71)
–
(1
71)
Derivatives designated and effective as hedging instruments (fair value movements through OC
I)
–
(57)
–
(57)
–
(228)
(6,0
7
6)
(6,30
4)
At 31 December 2020
Level 1
£m
Level 2
£m
Level 3
£m
T
otal
£m
Financial assets at fair value
Financial assets measured at fair value through other comprehensive income (FVT
OC
I):
Other investments designated at FVT
OC
I
2,281
–
65
8
2,939
T
rade and other receivables
–
1,942
–
1,9
42
Financial assets mandatorily measured at fair value through proﬁt or loss (FVTP
L):
Other investments
–
–
121
121
Other non-current assets
–
–
30
30
T
rade and other receivables
–
46
–
46
Held for trading derivatives that are not in a designated and effective hedging relationship
–
63
5
68
Cash and cash equivalents
3,292
–
–
3,292
Derivatives designated and effective as hedging instruments (fair value movements through OC
I)
–
89
–
89
5
,573
2,14
0
814
8,527
Financial liabilities at fair value
Financial liabilities mandatorily measured at fair value through proﬁt or loss (FVTP
L):
Contingent consideration liabilities
–
–
(5,86
9)
(5,86
9)
Held for trading derivatives that are not in a designated and effective hedging relationship
–
(191)
(9)
(200)
Derivatives designated and effective as hedging instruments (fair value movements through OC
I)
–
(31)
–
(31)
–
(222)
(5,8
7
8)
(6,1
00)
43. Financial instruments and related disclosur
es
continued
23
4
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Move
ments i
n the year f
or ﬁnan
cial i
nstru
ments me
asu
red us
ing Level 3 va
luatio
n metho
ds are pr
ese
nted bel
ow:
2021
£m
2020
£m
At 1 January
(5,0
64)
(4,
722)
Net losses recognised in the income statement
(1,024)
(1,269)
Net gains recognised in other comprehensive income
18
9
16
0
Settlement of contingent consideration liabilities
856
885
Additions
99
126
Disposals and settlements
(1
9)
(
172
)
T
ransfers from Level 3
(6
94)
(72)
At 31 December
(5,657)
(5,0
64)
Net l
oss
es of £1
,
02
4 millio
n (
2020 – £
1
,269 mill
ion) attri
buta
ble to Level 3 ﬁ
nanc
ial ins
trum
ents whi
ch were r
ecog
nise
d in the
inc
ome st
atement we
re all i
n resp
ect of ﬁ
nanci
al inst
rume
nts whic
h were he
ld at the en
d of the yea
r and wer
e repor
ted i
n Othe
r
operating i
ncome. Charges of
£
1
,026 mi
llion (
2
02
0 –
£
1
,
1
1
4 mil
lion
)
arose from remeasurement
of the
contingen
t consideration
payab
le for the a
cquis
itio
n of the for
mer Shi
onogi
-
Vii
V Hea
lthca
re joi
nt venture a
nd £32 m
illion (2020 – £1
61 milli
on
) aros
e from
rem
eas
ureme
nt of the c
onting
ent con
side
ration p
ayable fo
r the acq
uisit
ion of the N
ovar
tis Vaccin
es bus
ines
s. Ne
t gains o
f £
1
9
5
mill
ion (2020 – net gai
ns of £
39 milli
on
) attr
ibut
able to L
evel 3 ﬁnan
cial i
nstru
ments r
epor
ted in O
ther c
ompre
hens
ive inco
me as
Fai
r value move
ments o
n equit
y inves
tment
s arose p
rior to tr
ansf
er from L
evel 3 on eq
uity i
nvestme
nts whi
ch tra
nsfer
red to a Leve
l
1 valu
ation me
thodo
logy a
s a resu
lt of lis
ting on a re
cogn
ised s
tock exch
ange du
ring the ye
ar
. Net g
ains an
d loss
es inc
lude th
e
imp
act of exc
hange m
ovement
s.
Fi
nanci
al liab
iliti
es mea
sure
d using L
evel 3 valu
ation me
thods at 31 Dec
embe
r inclu
ded £
5,559 m
illio
n (
2020 – £5,
359 mi
llion) in
respect of contingen
t consideration
pay
able for
the
acquisition in
20
1
2
of t
he former
Shionogi-
ViiV Healthcare joint
vent
ure. This
co
nside
ratio
n is expe
cted to be pa
id over a num
ber of ye
ars a
nd will va
ry in l
ine wit
h the futu
re per
for
manc
e of spe
ciﬁe
d prod
ucts
and m
ovement
s in cer
ta
in forei
gn cur
renci
es. T
hey als
o inclu
ded £
4
7
9 mill
ion (2020 – £47
7 millio
n
) in res
pec
t of conti
ngent
co
nside
ratio
n for the ac
quisi
tion in 201
5 o
f the Nova
rti
s V
acci
nes bus
ines
s. T
his con
side
ration i
s expe
cted to be pa
id over a
numb
er of yea
rs and w
ill var
y in li
ne with t
he futur
e per
form
ance o
f spec
iﬁed p
rodu
cts, t
he achieve
ment of c
er
tain m
iles
tone
ta
rgets a
nd moveme
nts in ce
rt
ain for
eign cu
rrenc
ies
. Sens
itivi
ty an
alysi
s on the
se bal
ance
s is provi
ded in N
ote 32, ‘C
onting
ent
consideration
liabilit
ies’
.
(b
) T
ra
de and oth
er rece
ivables and O
the
r non-
curren
t asset
s in scope of I
FRS 9
Th
e followi
ng tab
le rec
oncil
es ﬁna
ncia
l instr
uments w
ithin T
rad
e and othe
r rec
eivabl
es and O
ther n
on-c
urren
t ass
ets whi
ch fall
wit
hin the s
cope of I
FR
S 9 to the relev
ant bal
ance s
heet am
ounts
. The ﬁ
nanci
al as
sets ar
e pred
omina
ntly non
-inter
est ea
rning
.
Non-ﬁnancial instruments
include tax receivables, pension surplus
balances and prepa
yments, which are
outside t
he scope of
IF
RS 9.
2021
2020
At
FVTP
L
£m
At
FVT
OCI
£m
Amortised
cost
£m
Financial
instruments
£m
Non-
ﬁnancial
instruments
£m
T
otal
£m
At
FVTP
L
£m
At
FVT
OCI
£m
Amortised
cost
£m
Financial
instruments
£m
Non-
ﬁnancial
instruments
£m
T
otal
£m
T
rade and other receivables
(Note 25)
59
1,943
4,830
6,832
1,028
7
,
860
46
1,942
3,99
0
5
,978
9
74
6,952
Other non-current assets
(Note 23)
23
–
21
44
1,632
1,6
76
30
–
37
67
9
74
1,041
82
1,9
43
4,851
6
,876
2,6
60
9,536
76
1,942
4,02
7
6,0
45
1,9
48
7
,993
T
rade an
d other re
cei
vable
s inclu
de trad
e rece
ivabl
es of £6
,246 milli
on (
2020 – £5
,549 mi
llion). The G
roup ha
s por
t
folios i
n each
of the t
hree bu
sine
ss mod
els und
er IF
RS 9: £59 m
illion (2020 – £
46 milli
on
), mea
sure
d at F
VT
PL
, is he
ld to sell th
e contr
actu
al
ca
sh ﬂows a
s the re
ceiv
able
s will be s
old und
er a facto
ring ar
rang
ement
, £
1
,943 m
illion (2020 – £1
,
94
2 mill
ion
), mea
sure
d at
F
V
TOCI
, is he
ld to eith
er coll
ect or s
ell the c
ontra
ctual c
ash ﬂ
ows as th
e rece
ivabl
es may be s
old und
er a facto
ring ag
reeme
nt,
and £
4,
2
44 mill
ion (2020 – £3
,561 millio
n
), meas
ured at a
mor
tise
d cost
, is hel
d to colle
ct the c
ontra
ctual c
ash ﬂ
ows and th
ere is
no fa
ctorin
g agree
ment in p
lace.
43. Financial instruments and related disclosur
es
continued
GS
K Ann
ual R
epor
t 2021
235
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
(
c
) T
ra
de and oth
er payables
, Ot
her provisi
ons, C
ontin
gent cons
iderat
ion liabi
lities a
nd Ot
her non
-curr
ent
liab
ilities i
n scope of I
FRS 9
The follo
wing table reconciles
ﬁnancial instrument
s within
T
rade and other
pay
ables, Other provisions,
Contingent considerat
ion
lia
biliti
es and O
ther n
on-c
urren
t liabi
litie
s which f
all wi
thin the s
cope o
f IFR
S 9 to the rel
evant bal
ance s
heet a
mounts
. The ﬁ
nanci
al
liabilities are
predominantly
non-int
erest bearing. Non-ﬁnancial inst
ruments incl
ude pa
yments on
account, tax and social security
payables
and pro
visions which
do not
arise from
contractual obliga
tions
to
deliver
cash or another
ﬁnancial asset, which are
outside
the s
cope of I
FR
S 9.
2021
2020
At FVTP
L
£m
Amortised
cost
£m
Financial
instruments
£m
Non-
ﬁnancial
instruments
£m
T
otal
£m
At FVTP
L
£m
Amortised
cost
£m
Financial
instruments
£m
Non-
ﬁnancial
instruments
£m
T
otal
£m
T
rade and other payables
(Note 28)
–
(15,431)
(1
5,431)
(2,1
23)
(1
7
,5
54)
–
(13,
7
48)
(13,
7
48)
(2,092)
(15,84
0)
Other provisions
(Note 31)
–
(113)
(1
1
3)
(1,35
8)
(1,4
71)
–
(232)
(232)
(1,527)
(1,
75
9)
Contingent consideration
liabilities (Note 32)
(6,07
6)
–
(6,076)
–
(6,07
6)
(5,8
69)
–
(5,8
69)
–
(5,86
9)
Other non-current liabilities
(Note 33)
–
(52)
(52)
(86
9)
(921)
–
(7
2)
(7
2)
(7
31)
(803)
(6,0
7
6)
(15,59
6)
(21,672)
(4,3
50)
(26,022)
(5,86
9)
(14,052)
(19,921)
(4,350)
(24,271)
(
d) Deri
v
ati
v
e ﬁnan
cial ins
trumen
ts and h
edging pro
gramme
s
De
rivati
ves are o
nly use
d for ec
onomi
c hedgi
ng purp
oses a
nd not a
s specu
lative inve
stme
nts and a
re cla
ssi
ﬁed a
s ‘held f
or tradi
ng’
,
othe
r than de
sign
ated and ef
fec
tive he
dging i
nstru
ments
, and ar
e pres
ented a
s curre
nt as
sets or li
abili
ties i
f they are ex
pec
ted to be
set
tled w
ithin 1
2 month
s afte
r the end of t
he repo
rt
ing per
iod, ot
her
wis
e they are c
las
siﬁe
d as no
n-cur
rent
. The Gr
oup ha
s the
follo
wing
deriva
tive
ﬁnancial
instrume
nts
:
2021
Fair value
2020
Fair value
Assets
£m
Liabilities
£m
Assets
£m
Liabilities
£m
Non-current
Cash ﬂow hedges – Interest rate swap contracts
(principal amount – £1,99
6 million (2020 – £nil))
12
(1)
–
–
Current
Cash ﬂow hedges – Interest rate swap contracts
(principal amount – £nil (2020 – £89
9 million))
–
–
–
(1)
Net investment hedges – Cross currency swaps
(principal amount – £nil (2020 – £54
9 million))
–
–
–
(18)
Cash ﬂow hedges – Foreign exc
hange contracts
(principal amount – £160 million (2020 – £24 million))
–
(3)
–
–
Net investment hedges – Foreign exc
hange contracts
(principal amount – £5,46
9 million (2020 – £11,193 million))
111
(53)
89
(12)
Derivatives designated and effective as hedging instruments
12
3
(57)
89
(31)
Non-current
Embedded and other derivatives
6
–
5
(1
0)
Current
Foreign exc
hange contracts
(principal amount – £9,
728 million (2020 – £13,563 million))
77
(1
69)
57
(19
0)
Embedded and other derivatives
–
(2)
6
–
Derivatives classiﬁed as held for trading
83
(1
71)
68
(200)
T
otal derivative instruments
206
(228)
1
57
(231)
Fair value
hedges
At 3
1 De
cemb
er 202
1 and 31 Dec
ember 2020
, the Gro
up had no d
esign
ated fai
r value he
dges
.
43. Financial instruments and related disclosur
es
continued
23
6
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Net in
vestment hedges
At 3
1 De
cemb
er 202
1
, cer
tain f
oreig
n exchan
ge cont
racts we
re des
ignate
d as net inve
stme
nt hedg
es in re
spec
t of the for
eign
cur
rency t
rans
lation r
isk ar
ising o
n cons
olidat
ion of the G
roup’s net inve
stmen
t in its Eur
opea
n (Euro) and Ja
pane
se (JP
Y) fo
reign
ope
ratio
ns as sh
own in the t
able a
bove.
Th
e carr
yi
ng value o
f bonds o
n page 232 inc
lude
d £4,
982 mill
ion (2020 – £
7
,681 milli
on
) that we
re des
ignated a
s hedg
ing
ins
trume
nts in net i
nvestm
ent hed
ges.
C
ash ﬂow hedg
es
Dur
ing 201
8
-
202
1
, the Gro
up entere
d into for
war
d foreig
n exchan
ge cont
ract
s which h
ave been de
sign
ated as c
ash ﬂ
ow hedge
s.
Th
ese wer
e entere
d into to hedg
e the fore
ign exch
ange ex
posur
e aris
ing on c
ash ﬂ
ows from E
uro deno
minated c
oupo
n paymen
ts
rel
ating to note
s issu
ed unde
r the Gr
oup’
s Euro
pean M
ediu
m T
er
m Note pro
gram
me, on th
e buyout o
f Novar
tis’
non
-cont
rollin
g intere
st in the C
ons
umer He
alth
care J
oint Venture i
n 20
1
8
, on the di
vestm
ent of Ho
rlick
s and oth
er nutri
tion br
ands
whi
ch took pl
ace in 2020 a
nd on reﬁ
nanc
ing exi
sting de
bt matur
ities
.
Th
e Group m
anage
s its c
ash ﬂow i
nteres
t rate ri
sk by usin
g ﬂoatin
g-to-ﬁ
xed inter
est ra
te swaps
. In add
ition
, the Gro
up car
rie
s a
balance in reserves that arose
from pre-hedgin
g ﬂuctuat
ions in
long-
term in
terest rat
es when
pricing bonds
issued in prior
years in
the c
urren
t year, and in the f
uture
. The ba
lanc
e is rec
lass
iﬁe
d to ﬁnan
ce cos
ts over the l
ife of the
se bon
ds.
Foreign ex
change risk
In th
e curr
ent year, the G
roup ha
s desi
gnated c
er
tain fo
reign e
xchang
e for
ward c
ontrac
ts and sw
aps as c
ash ﬂ
ow and net
inves
tment h
edge
s. Fo
reign exc
hang
e deri
vative ﬁna
ncia
l ass
ets and l
iabil
ities a
re pre
sented i
n the line ‘
Derivati
ve
ﬁnanc
ial
ins
trume
nts’ (
eithe
r as as
sets o
r liabi
litie
s
) on the C
onsol
idated b
alanc
e she
et. Th
e fol
lowi
ng ta
ble
s de
tai
l the f
ore
ign ex
cha
nge
for
war
d contr
acts a
nd swaps o
utst
anding a
t the end of t
he repo
rti
ng per
iod, a
s well as i
nform
ation on t
he rela
t
ed he
dged i
tems.
He
dge ef
fect
ivene
ss is de
termin
ed at the in
cepti
on of the h
edge re
lation
ship, an
d throu
gh peri
odic pr
ospe
ctive e
ffe
ctiven
ess
as
ses
smen
ts to ensur
e that an e
conom
ic rel
ations
hip exis
ts bet
ween th
e hedge
d item an
d hedgi
ng instr
umen
t. The G
roup en
ters
into he
dge re
lation
ships w
here th
e criti
cal te
rms of th
e hedgi
ng instr
ument m
atch exac
tly wit
h the term
s of the he
dged ite
m, and s
o
a qua
litati
ve as
sess
ment of e
ffe
ctive
ness i
s per
for
med. I
f chan
ges in c
ircum
stan
ces af
fec
t the term
s of the he
dged ite
m such th
at
the c
ritic
al ter
ms no long
er match ex
actly w
ith the c
ritic
al ter
ms of the he
dging i
nstru
ment
, the Gro
up use
s the hypot
hetic
al
der
ivative m
ethod to a
sse
ss ef
fec
tivene
ss.
Th
e main so
urce of h
edge i
nef
fecti
venes
s in the
se hed
ging rel
ations
hips i
s the ef
fect o
f the cou
nterpa
rt
y and th
e Group’s own
cre
dit ri
sk on the f
air valu
e of the for
eign exc
hange fo
rwa
rd co
ntrac
ts and swa
ps, w
hich is n
ot reﬂe
cted in th
e fair va
lue of the
hed
ged ite
m attri
buta
ble to cha
nges i
n foreig
n exchan
ge rates a
nd inef
fec
tiven
ess o
n rollin
g the ca
sh ﬂow he
dges o
f the
dive
stme
nts ment
ioned a
bove. No o
ther so
urce
s of inef
fec
tivene
ss em
erged f
rom the
se hed
ging re
lation
ships
. Ine
ffe
ctive
ness
to be re
cord
ed fro
m cas
h ﬂow hed
ges am
ounted to £n
il in 202
1 (2020 – gain of £7 mil
lion). No ine
ffe
ctive
ness wa
s rec
orde
d from
net inve
stme
nt hedg
es (2020 – £nil).
In
clude
d in the 2020 ta
ble be
low unde
r ‘Bo
rrowin
gs’ are bo
nds wi
th notio
nal valu
e of US
$7
50 milli
on that h
a
ve bee
n swapp
ed to
ﬁxe
d intere
st rate EU
R debt w
ith a cro
ss cur
rency i
ntere
st rate swap
.
2021
Hedging instruments
Average
exchange rate
Foreign
currency
Notional
value
£m
Carrying
value
£m
Periodic
change in value
for calculating
hedge
ineffectiveness
£m
Cash ﬂow hedges
Foreign exc
hange contracts
Buy foreign currency:
Less than 3 months
1.32
USD
89
(2)
–
3 to 6 months
1.1
7
EUR
48
(1)
(1)
Over 6 months
1.17
EUR
23
–
–
160
(3)
(1)
43. Financial instruments and related disclosur
es
continued
GS
K Ann
ual R
epor
t 2021
237
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
2021
Hedging instruments
Average
exchange rate
Foreign
currency
Notional
value
£m
Carrying
value
£m
Periodic
change in value
for calculating
hedge
ineffectiveness
£m
Net investment hedges
Foreign exc
hange contracts
Sell foreign currency:
Less than 3 months
1.18
EUR
5,34
8
58
578
SGD
–
–
55
155.19
J
PY
121
–
15
Borrowings
Less than 3 months
EUR
252
(252)
11
Over 6 months
EUR
4,9
98
(4,982)
459
1
0,
719
(5,17
6)
1,118
2021
Hedged items
Periodic c
hange in value
for calculating hedge
ineffectiveness
£m
Cumulative balance in cash
ﬂow hedge reserve/foreign
currency translation reserve
for continuing hedges
£m
Cash ﬂow hedges
V
ariability in cash ﬂows from foreign exc
hange exposure arising on
Euro denominated coupon payments relating to debt issued
1
(1)
Net investment hedges
Net investment in foreign operations
(1,117)
(873
)
2020
Hedging instruments
Average
exchange rate
Foreign
currency
Notional
value
£m
Carrying
value
£m
Periodic
change in value
for calculating
hedge
ineffectiveness
£m
Cash ﬂow hedges
Foreign exc
hange contracts
Buy foreign currency:
3 to 6 months
1.12
EUR
24
0.1
–
24
0.1
–
2020
Hedging instruments
Average
exchange rate
Foreign
currency
Notional
value
£m
Carrying
value
£m
Periodic
change in value
for calculating
hedge
ineffectiveness
£m
Net investment hedges
Foreign exc
hange contracts
Sell foreign currency:
Less than 3 months
1.1
0
EUR
9,663
60
(
370)
Less than 3 months
1
.7
9
SG
D
1,387
13
32
Less than 3 months
13
9.41
J
PY
143
4
(30)
Borrowings (including cross currency interest rate swaps):
3 to 6 months
EUR
549
(55
0)
(34)
Over 6 months
EUR
7
,117
(7
,131)
(5
0
1)
18,859
(7
,6
04)
(9
03)
43. Financial instruments and related disclosur
es
continued
23
8
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
2020
Hedged items
Periodic c
hange in value
for calculating hedge
ineffectiveness
£m
Cumulative balance in cash
ﬂow hedge reserve/foreign
currency translation reserve
for continuing hedges
£m
Cash ﬂow hedges
V
ariability in cash ﬂows from a highly probable forecast transaction
–
–
V
ariability in cash ﬂows from foreign exc
hange exposure arising on
Euro denominated coupon payments relating to debt issued
–
–
Net investment hedges
Net investment in foreign operations
903
(1,9
83)
£1
9 mi
llion (2020 – £
1
9 millio
n
) of bala
nce
s in the ca
sh ﬂow h
edge r
eser
ve ar
ise fr
om hedg
ing rel
ations
hips for w
hich h
edge
accounting is no longer applied.
Th
e followi
ng tab
le deta
ils the e
ffe
ctiven
ess of t
he hedg
ing rel
ations
hips a
nd the amo
unts re
clas
siﬁ
ed fro
m the hed
ging re
ser
ve to
proﬁt or loss:
2021
Amount reclassiﬁed to proﬁt or loss
Hedging
gains/(losses)
recognised in
reserves
£m
Amount
of hedge
ineffectiveness
gains/(losses)
recognised in
proﬁt or loss
£m
Line item
in proﬁt or
loss in
which hedge
ineffectiveness
is included
Hedged
future cash
ﬂows
no longer
expected to
occur
£m
As hedged
item affects
proﬁt or loss
£m
Line item
in which
reclassiﬁcation
adjustment
is included
Cash ﬂow hedges
V
ariability in cash ﬂows from a highly probable forecast transaction
7
–
Other
operating
income/
(expense)
–
(7)
Other
operating
income/
(expense)
V
ariability in cash ﬂows from foreign exc
hange exposure arising on
Euro denominated coupon payments relating to debt issued
(1)
–
Finance
income/
(expense)
–
–
Finance
income/
(expense)
Net investment hedges
Net investment in foreign operations
1,11
7
–
Finance
income/
(expense)
–
(7)
Finance
income/
(expense)
Th
e followi
ng tab
le deta
ils the e
ffe
ctiven
ess of t
he hedg
ing rel
ations
hips a
nd the amo
unts re
clas
siﬁ
ed fro
m the hed
ging re
ser
ve to
proﬁt or loss:
2020
Amount reclassiﬁed to proﬁt or loss
Hedging
gains/(losses)
recognised in
reserves
£m
Amount
of hedge
ineffectiveness
gains/(losses)
recognised in
proﬁt or loss
£m
Line item
in proﬁt or
loss in
which hedge
ineffectiveness
is included
Hedged
future cash
ﬂows
no longer
expected to
occur
£m
As hedged
item affects
proﬁt or loss
£m
Line item
in which
reclassiﬁcation
adjustment
is included
Cash ﬂow hedges
V
ariability in cash ﬂows from a highly probable forecast transaction
(15)
7
Other
operating
income/
(expense)
–
51
Other
operating
income/
(expense)
V
ariability in cash ﬂows from foreign exc
hange exposure arising on
Euro denominated coupon payments relating to debt issued
–
–
Finance
income/
(expense)
–
–
Finance
income/
(expense)
Net investment hedges
Net investment in foreign operations
(903)
–
Finance
income/
(expense)
–
–
Finance
income/
(expense)
43. Financial instruments and related disclosur
es
continued
GS
K Ann
ual R
epor
t 2021
239
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Interest rate risk
Th
e Group m
anage
s its c
ash ﬂow i
nteres
t rate ri
sk by usin
g ﬂoatin
g-to-ﬁ
xed inter
est ra
te swaps
, wher
e at quar
terl
y inter
vals th
e
dif
fer
ence b
etwe
en ﬁxe
d contr
act rate
s and ﬂo
ating ra
t
e inter
est a
mounts c
alcu
lated by ref
erenc
e to the agr
eed noti
onal p
rinci
pal
amounts are exchanged.
Th
ere are n
one of the
se swap
s outs
tandi
ng as 31 Dec
ember 2021
, however
, the in
teres
t rate ris
k on an ele
ment of f
uture d
ebt
is
suanc
e has b
een ma
naged by e
nterin
g into for
ward s
tar
ting i
nteres
t rate swap
s, ef
fec
tively to l
ock in th
e intere
st rates o
n the deb
t
in ad
vance
. The
se will b
e clos
ed out at th
e time of is
suin
g the debt
, and th
e resul
ting ga
in or los
s held i
n OCI a
nd recyc
led to
inc
ome st
atement a
s the inte
rest p
ayment
s on the de
bt impac
t the inc
ome st
atemen
t.
Forwar
d starting interest rate swaps
Th
e for
ward st
ar
ting inte
rest r
ate contr
acts
, excha
nging ﬂ
oating in
teres
t for ﬁxe
d intere
st, have b
een de
signate
d as ca
sh ﬂow
hed
ges to he
dge the i
nteres
t varia
bilit
y of the i
nteres
t cas
h ﬂows a
ssoc
iated wi
th the fut
ure ﬁxe
d rate debt
.
Interest rate swaps
Th
e intere
st rate swa
p contr
acts
, excha
nging ﬂo
ating r
ate intere
st for ﬁx
ed intere
st, h
a
ve bee
n des
ignated a
s ca
sh ﬂow he
dges to
hed
ge the var
iabi
lity o
f the inter
est c
ash ﬂ
ows ass
ociate
d with ﬂ
oating r
ate debt re
lating to no
tes iss
ued un
der the G
roup’s Europ
ean
Me
dium T
erm N
ote progr
amme
. The inte
rest r
ate swaps a
nd the inte
rest p
ayment
s on the lo
an occ
ur simul
tane
ousl
y and the a
mount
acc
umulate
d in equi
ty is r
ecla
ssi
ﬁed to pr
oﬁt or l
oss over t
he peri
od that th
e ﬂoati
ng rate inter
est p
a
yme
nts af
fect p
roﬁt o
r loss
.
Th
e criti
cal ter
ms of the i
nteres
t rate swap a
nd for
ward s
tar
ting i
nteres
t rate swap c
ontr
acts an
d their c
orre
spon
ding he
dged ite
ms
are m
ateria
lly the s
ame. A q
ualit
ative a
sse
ssme
nt of ef
fect
ivene
ss is pe
rfo
rmed a
nd it is ex
pecte
d that the va
lue of the i
ntere
st rate
swap c
ontra
cts an
d the valu
e of the co
rres
pondi
ng hedg
ed items w
ill sys
tematic
ally c
hange i
n oppo
site dir
ectio
ns in re
spons
e to
movem
ents in th
e under
lyin
g intere
st rates
. The m
ain sou
rce
s of inef
fec
tivene
ss in th
ese he
dge re
lation
ships a
re the ef
fec
ts of the
Gr
oup’
s own cr
edit ri
sk on th
e fair val
ue of the in
teres
t rate swap c
ontrac
ts, w
hich a
re not re
ﬂecte
d in the fai
r value of t
he hedg
ed item
attributable to
the ch
ange in i
nterest ra
tes. No ot
her mat
erial sources o
f ineffectiveness emerged from
these hedging
relation
ships.
Th
e followi
ng tab
les prov
ide in
formati
on reg
ardin
g intere
st rate swa
p and for
war
d star
ti
ng intere
st rate swa
p contr
acts o
utst
anding
and t
he relate
d hedg
ed items at 31 Dec
emb
er 202
1 and 31 Dece
mber 2020
. Intere
st rate swa
p contr
act a
sset
s and lia
biliti
es are
pre
sente
d in the lin
e ‘De
rivati
ve ﬁnanc
ial ins
trum
ents’ (
eith
er as a
sset
s or liab
iliti
es
) on the C
onso
lidate
d balan
ce she
et.
2021
Hedging instruments
Average
contracted ﬁxed
rate
%
Notional
principal
value
£m
Change in
fair value for
recognising
hedge
ineffectiveness
£m
Fair value
assets/
(liabilities)
£m
5-1
0 years
1.1
038
668
4
4
1
0-30 years
1.3385
935
3
3
More than 30 years
1.4515
3
93
4
4
2021
Hedged items
Change in value
used for
calculating
hedge
ineffectiveness
£m
Balance in cash
ﬂow hedge
reserve for
continuing
hedges
after tax
£m
Pre-hedging of long-term interest rate
(11)
(8)
£1
1 mil
lion (2020 – £
1
1 mi
llion) of ba
lance
s in the c
ash ﬂ
ow hedg
e rese
rve a
rise f
rom hed
ge rel
ations
hips for w
hich h
edge
accounting is no longer applied.
2020
Hedging instruments
Average
contracted ﬁxed
rate
%
Notional
principal
value
£m
Change in
fair value for
recognising
hedge
ineffectiveness
£m
Fair value
assets/
(liabilities)
£m
Less than 1 year
0.1
7
1,44
9
3
(19)
1 to 2 years
–
–
–
–
2020
Hedged items
Change in value
used for
calculating
hedge
ineffectiveness
£m
Balance in cash
ﬂow hedge
reserve for
continuing
hedges
after tax
£m
V
ariable rate borrowings
(3)
1
43. Financial instruments and related disclosur
es
continued
24
0
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e followi
ng tab
le deta
ils the e
ffe
ctiven
ess of t
he hedg
ing rel
ations
hips a
nd the amo
unts re
clas
siﬁ
ed fro
m the hed
ging re
ser
ve to
proﬁt or loss:
2021
Amount reclassiﬁed to proﬁt or loss
Hedging
gains/(losses)
recognised in
reserves
£m
Amount
of hedge
ineffectiveness
recognised in
proﬁt or loss
£m
Line item
in proﬁt or
loss in
which hedge
ineffectiveness
is included
Hedged
future cash
ﬂows
no longer
expected to
occur
£m
As hedged
item affects
proﬁt or loss
£m
Line item
in which
reclassiﬁcation
adjustment is
included
Cash ﬂow hedges
V
ariability in cash ﬂows
(11)
–
Finance
income/
(expense)
–
17
Finance
income/
(expense)
Pre-hedging of long-term interest rates:
Matured in the past
–
–
Finance
income/
(expense)
–
2
Finance
income/
(expense)
5-1
0 years
4
–
–
–
1
0-30 years
3
–
–
–
>30 years
4
–
–
–
2020
Amount reclassiﬁed to proﬁt or loss
Hedging
gains/(losses)
recognised in
reserves
£m
Amount
of hedge
ineffectiveness
recognised in
proﬁt or loss
£m
Line item
in proﬁt or
loss in
which hedge
ineffectiveness
is included
Hedged
future cash
ﬂows
no longer
expected to
occur
£m
As hedged
item affects
proﬁt or loss
£m
Line item
in which
reclassiﬁcation
adjustment is
included
Cash ﬂow hedges
V
ariability in cash ﬂows
3
–
Finance
income/
(expense)
–
–
Finance
income/
(expense)
Pre-hedging of long-term interest rates
(7)
–
Finance
income/
(expense)
–
3
Finance
income/
(expense)
(
e
) Of
fse
tt
ing of ﬁnan
cial asse
ts and li
abilit
ies
Fi
nanci
al as
sets an
d liabi
litie
s are of
fse
t and the n
et amou
nt repo
rted i
n the bal
ance s
heet w
here th
ere is a le
gall
y enforc
eab
le righ
t
to of
fset t
he rec
ognis
ed amo
unts, a
nd ther
e is an inte
ntion to se
ttle o
n a net ba
sis or re
alis
e the as
set an
d sett
le the lia
bilit
y
sim
ultan
eous
ly
. The
re are a
lso ar
range
ments t
hat do not me
et the cr
iteri
a for of
fset
ting b
ut still a
llow for th
e relate
d amoun
ts to be
of
fse
t in cer
ta
in circ
umst
ance
s, suc
h as ba
nkru
ptcy or the te
rminat
ion of a co
ntrac
t.
Th
e followi
ng tab
les set o
ut the ﬁn
anci
al as
sets an
d liabi
litie
s that are o
ff
set, o
r subje
ct to enfor
cea
ble ma
ster net
ting a
rran
gemen
ts
and o
ther sim
ilar ag
reem
ents but n
ot of
fset
, as at 3
1 De
cemb
er 202
1 and 31 Dec
ember 2020
. The co
lumn ‘
Net amo
unt’ s
hows the
imp
act on th
e Group’s bal
ance s
heet i
f all of
fset r
ights we
re exerc
ised
.
At 31 December 2021
Gross
ﬁnancial
assets/
(liabilities)
£m
Financial
(liabilities)/
assets
offset
£m
Net ﬁnancial
assets/
(liabilities)
£m
Related
amounts not
offset
£m
Net
amount
£m
Financial assets
T
rade and other receivables
6,851
(19)
6,832
(3)
6,829
Derivative ﬁnancial instruments
206
–
20
6
(192)
14
Financial liabilities
T
rade and other payables
(15,450)
19
(15,431)
3
(15,428)
Derivative ﬁnancial instruments
(228)
–
(228)
192
(36)
43. Financial instruments and related disclosur
es
continued
GS
K Ann
ual R
epor
t 2021
2
41
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
At 31 December 2020
Gross
ﬁnancial
assets/
(liabilities)
£m
Financial
(liabilities)/
assets
offset
£m
Net ﬁnancial
assets/
(liabilities)
£m
Related
amounts not
offset
£m
Net
balance
£m
Financial assets
T
rade and other receivables
5,9
9
7
(19)
5
,
978
(28)
5,950
Derivative ﬁnancial instruments
157
–
1
57
(142)
15
Financial liabilities
T
rade and other payables
(13,
7
6
7)
19
(13,
7
48)
28
(13,
7
20)
Derivative ﬁnancial instruments
(231)
–
(231)
142
(8
9)
Am
ounts wh
ich do no
t meet th
e criter
ia for of
fs
etti
ng on the ba
lanc
e shee
t but cou
ld be set
tle
d net in ce
rt
ain cir
cums
tanc
es
principally rela
te t
o deriv
ativ
e transactions
under ISDA
(Interna
tional Sw
aps and
Derivatives
Association
) a
greements where
each
par
t
y has th
e option to s
ettl
e amoun
ts on a net b
asis i
n the event of d
efault o
f the othe
r par
ty. As the
re is pr
esen
tly not a le
gally
enfo
rce
able ri
ght of of
fs
et, the
se amo
unts have not b
een of
fs
et in the ba
lanc
e sheet
, but have b
een pre
sente
d sepa
rately i
n the
ta
ble above
.
(
f) Debt interes
t rate repricing
table
Th
e followi
ng tab
le sets ou
t the exp
osure o
f the Gr
oup to intere
st rate
s on debt
, incl
uding c
ommer
cial p
aper. The mat
urit
y anal
ysis
of ﬁ
xed rate de
bt is sta
ted by cont
ractu
al matur
ity a
nd of ﬂoat
ing rate de
bt by inter
est rate r
epri
cing date
s. Fo
r the pur
pose of t
his
ta
ble, de
bt is deﬁ
ned a
s all cla
sse
s of bor
rowin
gs other t
han le
ase li
abili
ties
.
2021
2020
T
otal
debt
£m
T
otal
£m
Floating and ﬁxed rate debt less than one year
(3,3
98)
(3,495)
Between one and two years
(4,03
0)
(2,5
61)
Between two and three years
(1,57
6)
(4,0
61)
Between three and four years
(1,36
5)
(1,622)
Between four and ﬁve years
(1,425)
(1,3
98)
Between ﬁve and ten years
(4,41
1)
(5,981)
Greater than ten years
(6,9
53)
(6,915)
T
otal
(23,1
5
8)
(26,033)
Original issuance proﬁle:
Fixed rate interest
(22,35
5)
(23,002)
Floating rate interest
(803)
(3,031)
(23,1
58)
(26,033)
In a
dditio
n to the above
, for
ward s
tar
ting in
teres
t rate swap
s have been e
ntered i
nto, whic
h aff
ect the p
rici
ng of debt to b
e rais
ed in
the fut
ure. See Section
(
d
) Int
erest Rate
Risk for
further details.
43. Financial instruments and related disclosur
es
continued
242
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
(g) Sensitivit
y analysis
Th
e table
s bel
ow illust
rate the e
stimate
d impac
t on the in
come s
tateme
nt and eq
uity a
s a res
ult of hyp
othetic
al ma
rket movem
ents
in for
eign exc
hange a
nd inter
est ra
tes in rel
ation to th
e Group’s ﬁna
ncial i
nstr
uments
. The r
ange of va
riab
les ch
osen f
or the
sensitivity analysis reﬂects managemen
t’s
view
of changes which
are reasonably possible o
ver
a one-y
ear period.
Foreign ex
change sensitivit
y
Th
e Group o
perate
s intern
ationa
lly an
d is prim
aril
y expos
ed to fore
ign excha
nge ri
sk in re
lation to Ste
rling ag
ains
t movemen
ts in US
Dol
lar, Euro and J
apan
ese Y
e
n. For
eign exc
hange r
isk ar
ise
s from the t
rans
lation o
f ﬁnanc
ial a
sset
s and lia
biliti
es whi
ch are n
ot in
the f
uncti
onal cu
rrenc
y of the ent
ity th
at holds t
hem. B
ase
d on the Gr
oup’
s net ﬁ
nanci
al as
sets an
d liabi
litie
s as at 31 Dece
mber, a
wea
kening an
d stre
ngthen
ing of Ster
ling ag
ainst th
ese cu
rren
cies
, with a
ll other va
riab
les he
ld con
stan
t, is ill
ustrate
d in the ta
bles
bel
ow
. The t
able
s exclud
e ﬁnanc
ial in
strum
ents that e
xpos
e the Gro
up to forei
gn excha
nge ri
sk wher
e this ri
sk is fu
lly hed
ged wi
th
another
ﬁnancial
instru
ment.
2021
2020
Income statement impact of non-functional currency foreign exc
hange exposures
Increase/(decr
ease) in
income
£m
Increase/(decrease) in
income
£m
1
0 cent appreciation of the US Dollar
5
20
1
0 cent appreciation of the Euro
(26)
(25)
1
0 yen appreciation of the Y
en
–
(1)
2021
2020
Income statement impact of non-functional currency foreign exc
hange exposures
Increase/(decr
ease) in
income
£m
Increase/(decrease) in
income
£m
1
0 cent depreciation of the US Dollar
(4)
(17)
1
0 cent depreciation of the Euro
22
21
1
0 yen depreciation of the Y
en
–
1
Th
e equit
y impa
ct, sh
own bel
ow
, for fore
ign exch
ange s
ensit
ivit
y relate
s to deri
vative an
d non-d
eriva
tive ﬁna
ncia
l instr
uments
hed
ging the G
roup’s net inve
stmen
ts in its Eu
rope
an (Euro) forei
gn ope
ration
s and ca
sh ﬂow h
edge
s of its for
eign exc
hange
exp
osure a
risi
ng on Eur
o denom
inated co
upon pay
ments r
elatin
g to notes is
sued u
nder the G
roup’s Euro
pean M
ediu
m T
er
m
Note programme.
2021
2020
Equity impact of non-functional currency for
eign exchange exposures
Increase/(decr
ease)
in equity
£m
Increase/(decrease)
in equity
£m
1
0 cent appreciation of the Euro
(96
4)
(1,
711)
2021
2020
Equity impact of non-functional currency for
eign exchange exposures
Increase/(decr
ease)
in equity
£m
Increase/(decrease)
in equity
£m
1
0 cent depreciation of the Euro
814
1,429
43. Financial instruments and related disclosur
es
continued
GS
K Ann
ual R
epor
t 2021
243
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e table
s bel
ow pres
ent the G
roup’s sensi
tivi
ty to a wea
kening an
d stren
gthen
ing of Ster
ling aga
inst th
e releva
nt curr
ency ba
sed
on th
e comp
ositi
on of net de
bt as sh
own in No
te 29 adjus
ted for the e
ffe
cts of for
eign exc
hange d
eriv
atives th
at are not p
ar
t of net
deb
t but af
fect f
uture fo
reign c
urre
ncy ca
sh ﬂows
.
2021
2020
Impact of foreign exc
hange movements on net debt
(Increase)/decr
ease
in net debt
£m
(Increase)/decrease
in net debt
£m
1
0 cent appreciation of the US Dollar
(76
7)
(7
82)
1
0 cent appreciation of the Euro
444
286
1
0 yen appreciation of the Y
en
17
23
2021
2020
Impact of foreign exc
hange movements on net debt
(Increase)/decr
ease
in net debt
£m
(Increase)/decrease
in net debt
£m
1
0 cent depreciation of the US Dollar
6
61
67
5
1
0 cent depreciation of the Euro
(
375)
(239)
1
0 yen depreciation of the Y
en
(1
5)
(20)
Interest rate sensitivity
Th
e Group i
s expos
ed to inter
est r
ate risk on i
ts outs
tand
ing bor
rowing
s and inve
stmen
ts wher
e any cha
nges in i
nteres
t rates w
ill
af
fect f
uture c
ash ﬂ
ows or the fa
ir valu
es of ﬁn
ancia
l instr
ument
s.
Th
e major
ity o
f debt is i
ssue
d at ﬁxed i
nteres
t rates a
nd chan
ges in th
e ﬂoatin
g rates of i
nteres
t do not si
gniﬁ
cant
ly af
fect th
e
Gr
oup’
s net inte
rest c
harg
e, alth
ough the m
ajor
ity of c
ash a
nd liqu
id inves
tments e
arn ﬂ
oating r
ates of inte
rest
.
Th
e table b
elow hyp
otheti
call
y shows th
e Group’s sens
itiv
ity to ch
ange
s in inter
est rate
s in rel
ation to Ster
ling, U
S Doll
ar and Eu
ro
ﬂoa
ting rate ﬁ
nanci
al as
sets a
nd liab
ilitie
s. I
f the inter
est r
ates appl
ica
ble to ﬂoat
ing rate ﬁn
anci
al as
sets an
d liabi
litie
s were to have
inc
rea
sed by 1
% (
1
00 ba
sis po
ints)
, and a
ssu
ming othe
r varia
bles h
ad rem
ained c
onst
ant, i
t is esti
mated tha
t the Gro
up’
s ﬁnan
ce
inc
ome for 2021 would h
a
ve dec
rea
sed by ap
proxim
ately £1
1 mi
llion (2020 – £
1
4 mi
llion i
ncrea
se). A 1
% (
100 ba
sis po
ints
)
movem
ent in US
D intere
st rate
s would c
ause a
n incre
ase of £1
9
7 milli
on to equi
ty (2020 - £nil). A 1% (
1
00 ba
sis poi
nts
)
movem
ent in inte
rest r
ates EU
R or Sterli
ng is not d
eeme
d t
o have a mater
ial ef
fec
t on equ
ity.
2021
2020
Income statement impact of interest rate movements
Increase/(decr
ease)
in income
£m
Increase/(decrease)
in income
£m
1% (1
00 basis points) increase in Sterling interest rates
(25)
8
1% (1
00 basis points) increase in US Dollar interest rates
11
28
1% (1
00 basis points) increase in Euro interest rates
3
(22)
43. Financial instruments and related disclosur
es
continued
24
4
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
(h) Cont
ract
ual cash ﬂ
ows for non-
derivat
ive ﬁnanc
ial liabil
ities an
d derivative ins
trume
nts
Th
e followi
ng tab
les prov
ide an a
nalys
is of the a
ntici
pated co
ntrac
tual ca
sh ﬂow
s inclu
ding inter
est p
ayable for t
he Gro
up
’s non-
der
ivative ﬁ
nanc
ial lia
bilit
ies on a
n undis
counte
d basi
s. Fo
r the purp
ose of t
his tab
le, de
bt is deﬁ
ned a
s all cla
sse
s of bor
rowing
s
exce
pt for le
ase li
abili
ties
. Inter
est is c
alcu
lated ba
sed on d
ebt hel
d at 3
1 Dec
ember w
ithou
t tak
ing ac
count of f
uture i
ssua
nce.
Fl
oating r
ate intere
st is es
timated u
sing th
e prevail
ing inter
est r
ate at the bal
ance s
heet da
te. Cas
h ﬂows in fo
reign c
urre
ncies a
re
tra
nslate
d using s
pot rate
s at 3
1 Dece
mber.
At 31 December 2021
Debt
£m
Interest
on debt
£m
Lease
liabilities
£m
Finance
charge
on lease
liabilities
£m
T
rade payables
and other
liabilities not
in net debt
£m
T
otal
£m
Due in less than one year
(3,39
9)
(68
6)
(203)
(25)
(16,432)
(20,
7
4
5)
Between one and two years
(4,042)
(620)
(185)
(22)
(935)
(5,8
04)
Between two and three years
(1,582)
(5
7
4)
(120)
(19)
(893)
(3,1
8
8)
Between three and four years
(1,3
7
2)
(538)
(93)
(16)
(919)
(2,938)
Between four and ﬁve years
(1,428)
(500)
(73)
(14)
(924)
(2,939)
Between ﬁve and ten years
(4,4
40)
(2,04
6)
(205)
(44)
(2,
7
03)
(9,438)
Greater than ten years
(7,033)
(2,63
9)
(136)
(13)
(1,571)
(1
1,392)
Gross contractual cash ﬂows
(23,296)
(7
,6
03)
(1,015)
(153)
(24,3
7
7)
(5
6,444)
At 31 December 2020
Debt
£m
Interest
on debt
£m
Lease
liabilities
£m
Finance
charge
on lease
liabilities
£m
T
rade payables
and other
liabilities not
in net debt
£m
T
otal
£m
Due in less than one year
(3,4
93)
(7
25)
(230)
(34)
(14,554)
(19,03
6)
Between one and two years
(2,5
66)
(68
6)
(20
7)
(28)
(995)
(4,482)
Between two and three years
(4,07
8)
(621)
(126)
(22)
(897)
(5,
7
44)
Between three and four years
(1,632)
(
576)
(96)
(18)
(867)
(3,18
9)
Between four and ﬁve years
(1,407)
(539)
(86)
(15)
(8
83)
(2,93
0)
Between ﬁve and ten years
(6,0
18)
(2,17
7)
(239)
(47)
(3,169)
(11,650)
Greater than ten years
(6,9
9
7)
(2,985)
(133)
(16)
(1,529)
(11,6
60)
Gross contractual cash ﬂows
(26,191)
(8,3
09)
(1,11
7)
(180)
(22,8
94)
(58,6
91)
Th
e table b
elow pr
ovide
s an ana
lysis o
f the anti
cipated c
ontr
actua
l cas
h ﬂows for th
e Group’s der
ivative i
nstru
ments exc
ludin
g
equ
ity op
tions w
hich do n
ot give ri
se to ca
sh ﬂows
, and oth
er embe
dded d
erivat
ives
, whic
h are not ma
terial
, usin
g undis
counted
ca
sh ﬂows
. Ca
sh ﬂows in f
oreig
n curre
ncie
s are tr
ansla
ted usin
g spot rate
s at 3
1 Dec
embe
r
. The gro
ss ca
sh ﬂow
s of forei
gn
exch
ange co
ntrac
ts are p
rese
nted for th
e purpo
se of thi
s tabl
e althou
gh, in p
racti
ce, th
e Group u
ses s
tanda
rd set
tlem
ent
arrange
ments
to reduce its liquidity requirements on these instruments.
2021
2020
Gross cash inﬂows
Gross cash ouﬂows
Gross cash inﬂows
Gross cash outﬂows
Forwar
d
starting
interest rate
swaps
£m
For
eign
exchange
forward
contracts
and swaps
£m
Forwar
d
starting
interest rate
swaps
£m
For
eign
exchange
forward
contracts
and swaps
£m
Cross
currency
interest rate
swaps
£m
Foreign
exchange
forward
contracts
and swaps
£m
Cross
currency
interest rate
swaps
£m
Foreign
exchange
forward
contracts
and swaps
£m
Less than one year
–
41,252
(1
3)
(41,29
0)
551
32,451
(5
69)
(32,50
8)
Between one and two years
12
–
(26)
–
–
–
–
–
Between two and three years
24
–
(26)
–
–
–
–
–
Between three and four years
28
–
(26)
–
–
–
–
–
Between four and ﬁve years
28
–
(26)
–
–
–
–
–
Greater than ﬁve years
259
–
(220)
–
–
–
–
–
Gross contractual cash ﬂows
351
41,252
(337)
(41,290)
551
32,451
(5
69)
(32,50
8)
43. Financial instruments and related disclosur
es
continued
GS
K Ann
ual R
epor
t 2021
245
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
44
. Employ
ee share schemes
GS
K oper
ates sever
al emp
loyee sh
are sc
heme
s, inc
luding t
he Shar
e V
alue P
lan, w
here
by awards a
re gra
nted to empl
oyees to
acq
uire sh
ares o
r ADS in G
la
xoSm
ithK
line pl
c at no co
st af
t
er a th
ree-ye
ar ves
ting pe
riod a
nd the Per
for
manc
e Shar
e Plan
,
whe
reby awar
ds are g
ranted to e
mployee
s to acqu
ire sha
res or A
DS in G
lax
oSmi
thK
line plc at n
o cost
, subj
ect to the a
chievem
ent
by the G
roup of s
peci
ﬁed p
er
forma
nce ta
rgets
. The g
ranti
ng of thes
e res
tricte
d shar
e awards h
as rep
lace
d the gra
nting of o
ptions
to emp
loyees a
s the co
st of the s
chem
es more r
eadi
ly equate
s to the poten
tial ga
in to be mad
e by the emp
loyee. T
he Gro
up also
ope
rates s
avings r
elated s
hare op
tion sc
heme
s, whe
reby opt
ions ar
e gran
t
ed to em
ployee
s to acqui
re shar
es in G
lax
oSmi
thK
line
plc at a d
isco
unted pr
ice.
Gr
ants of r
estr
icted sh
are awar
ds are n
orma
lly exerc
isa
ble at the e
nd of the th
ree-ye
ar ves
ting or p
er
forma
nce pe
riod
. Awards a
re
nor
mally g
rante
d to employe
es to acq
uire sha
res or A
DS in G
la
xoSmi
thK
line pl
c but in so
me circ
umst
ance
s may be set
tle
d in ca
sh.
Grants under sa
vings-relat
ed share
option schemes
are normally e
xercisable after
three y
ears’ sa
ving. In accordance with
UK
pr
actic
e, the ma
jori
ty of op
tions un
der the s
avings
-rel
ated sha
re optio
n sche
mes ar
e grante
d at a pric
e 20% be
low the ma
rket pri
ce
rul
ing at the d
ate of gran
t. Opti
ons und
er histo
rica
l shar
e option s
chem
es were g
ranted a
t the mar
ket pric
e ruli
ng at the date of g
rant
.
Th
e t
ota
l char
ge for sha
re-b
ase
d ince
ntive pla
ns in 2021 was £
404 mil
lion (2020 – £3
93 milli
on
; 20
1
9 – £432 m
illion). Of t
his
amo
unt, £
303 m
illion (2020 – £
3
1
3 mi
llion; 20
1
9 – £302 m
illion) aro
se fro
m the Sha
re V
alue P
lan. S
ee Note 9, ‘
Empl
oyee Co
sts’
for further details.
GlaxoSmithKline share aw
ard schemes
Share V
alue Plan
Und
er the Sh
are Value P
lan, s
hare awar
ds are g
ranted to c
er
tain e
mployee
s at no co
st. T
he awards ve
st af
ter t
wo and a hal
f to
thr
ee year
s and the
re are n
o per
form
ance c
riter
ia att
ache
d. The f
air valu
e of thes
e awards i
s determ
ined ba
sed o
n the clo
sing sh
are
pri
ce on th
e day of gra
nt, af
ter ded
uctin
g the expe
cted fu
ture div
iden
d yield o
f 3.8
% (
2020 – 5.0
%; 20
1
9 – 4.
2%
) over the d
uratio
n
of the awa
rd.
Number of shares and ADS issuable
Shares
Number (000)
W
eighted
fair value
ADS
Number (000)
W
eighted
fair value
At 1 January 20
19
34,
068
17
,
3
87
Awards granted
12,814
£15.85
7
,00
8
$3
7
.90
Awards exercised
(11,
709)
(6,0
7
9)
Awards cancelled
(1,
7
04)
(
976
)
At 31 December 20
19
33,4
69
1
7
,340
Awards granted
13,223
£13.60
7
,411
$34.42
Awards exercised
(11,402)
(5,
7
46)
Awards cancelled
(1,418)
(1,0
15)
At 31 December 2020
33,8
7
2
1
7
,
990
Awards granted
13,681
£13.30
7
,28
0
$36.6
8
Awards exercised
(11,440)
(5,
726)
Awards cancelled
(1,
7
7
6)
(1,
705)
At 31 December 2021
34,337
1
7
,839
Performance Shar
e Plan
Und
er the Per
fo
rmanc
e Sha
re Pla
n, sha
re award
s are gra
nted to Dir
ector
s and se
nior exe
cutive
s at no co
st. Th
e perc
entag
e of
eac
h award th
at vests i
s base
d upon th
e per
for
mance o
f the Gr
oup over a de
ﬁned me
asu
remen
t peri
od with d
ivid
ends re
investe
d
dur
ing the s
ame pe
riod
. For awar
ds gra
nted from 201
6 t
o 201
9, the p
er
form
ance c
ondit
ions ar
e base
d on thre
e equa
lly weig
hted
me
asur
es over a thr
ee-ye
ar per
for
manc
e peri
od. T
hese we
re adju
sted fre
e ca
sh ﬂow, TSR an
d R&D new pr
oduc
t per
form
ance
.
For awa
rds gr
anted fr
om 2020, the p
er
forma
nce co
nditi
ons are b
ase
d on four me
asur
es over a th
ree-
year pe
rfo
rman
ce per
iod.
Th
ese ar
e adjus
ted fre
e cas
h ﬂow (30%)
, TS
R (
30%), R&D new p
roduc
t per
form
ance (20
%
) a
nd pipe
line pr
ogre
ss (20%
).
Th
e fair val
ue of the awa
rds is de
termin
ed bas
ed on th
e closi
ng shar
e pric
e on the d
a
y of gr
ant. F
or TSR p
er
forma
nce el
ement
s,
this i
s adjus
ted by the li
keliho
od of that c
onditi
on bei
ng met, a
s as
ses
sed at the t
ime of gr
ant.
Dur
ing 2021
, awa
rds were m
ade of 4.
9 millio
n shar
es at a weig
hted fai
r value of £1
0.69 and 1.6 milli
on ADS at a we
ighted f
air valu
e
of $29.
40. At 3
1 De
cemb
er 202
1
, t
here wer
e outs
tandi
ng awards ove
r 1
3
.
7 milli
on sha
res an
d 3.8 m
illion A
DS.
24
6
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Share options and savings-rel
ated options
For t
he purp
ose
s of valuin
g saving
s-re
lated opti
ons to ar
rive at the s
hare
-ba
sed paym
ent cha
rge, a B
lack-Sc
holes o
ption p
ricin
g
mod
el has b
een us
ed. T
he as
sumpti
ons use
d in the mo
del ar
e as foll
ows:
2021 Grant
2020 Grant
2019 Grant
Risk-free interest rate
0.7
4%
(0.07)%
0.4
4%
Dividend yield
3.8%
6.2%
4.5%
V
olatility
27%
27
%
22%
Expected life
3 years
3 years
3 years
Savings-related options grant price (including 20% discount)
£1
2.07
£1
0.34
£14.15
Options outstanding
Savings-related
share option schemes
Number
000
W
eighted
exercise
price
At 31 December 2021
7
,165
£11.58
Range of exercise prices on options outstanding at year end
£1
0.34
– £14.15
W
eighted average market price on exercise during year
£13.30
W
eighted average remaining contractual life
2.1 years
Opt
ions over 1.9 milli
on shar
es were g
rante
d during t
he year u
nder th
e saving
s-rel
ated sha
re opti
on sche
me at a weig
hted averag
e
fai
r value of £
3.
22. At 3
1 De
cemb
er 202
1
, 5
.3 mi
llion of t
he savin
gs-re
lated sh
are opt
ions wer
e not exerc
isa
ble.
Th
ere ha
s been no c
hang
e in the ef
fec
tive exer
cise pr
ice of a
ny outst
andin
g optio
ns durin
g the yea
r
.
Em
ployee Share O
wnersh
ip Plan T
r
usts
Th
e Group s
pons
ors Em
ployee Sh
are O
wner
ship P
lan (ES
OP) T
r
usts to ac
quire a
nd hold s
hare
s in Gla
xo
Smith
Kli
ne plc to sat
isf
y
award
s made un
der em
ployee in
centi
ve plans a
nd opti
ons gra
nted und
er empl
oyee sha
re optio
n sche
mes
. The tr
ustee
s of the
ESO
P T
r
usts pu
rcha
se sha
res wi
th ﬁnan
ce prov
ided by th
e Grou
p by way of loan
s or cont
ribut
ions
. The co
sts of r
unning th
e ESOP
T
rusts a
re cha
rged to th
e incom
e statem
ent. S
hare
s held by th
e ESOP T
rus
ts are de
ducte
d from oth
er res
er
ves and a
mor
tise
d
dow
n t
o the va
lue of pro
cee
ds, i
f any
, rec
eivab
le from e
mployee
s on exer
cise by a tr
ansf
er to reta
ined e
arnin
gs. T
he trus
tees have
wai
ved thei
r rights to d
ivid
ends on th
e shar
es hel
d by the ESO
P T
r
usts
. On 1
0 Febr
uar
y 2022, 50.
3 milli
on trea
sur
y sha
res wer
e
tra
nsfer
red to the E
SOP T
rus
ts afte
r whic
h the T
r
usts h
eld 72.9 mil
lion sh
ares a
gains
t the exer
cise of s
hare o
ptions a
nd sha
re
rewards.
Shares held for shar
e award sc
hemes
2021
2020
Number of shares (000)
23,065
4
8,835
£m
£m
Nominal value
6
12
Carrying value
27
194
Market value
371
655
Shares held for shar
e option schemes
2021
2020
Number of shares (000)
13
9
13
9
£m
£m
Nominal value
–
–
Carrying value
1
1
Market value
2
2
44. Employee share schemes
continued
GS
K Ann
ual R
epor
t 2021
247
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
45
. Prin
cipal G
roup compa
nies
Th
e followi
ng repr
esen
t the pri
ncipa
l subs
idiar
ies a
nd their c
ountr
ies of in
corp
orati
on of the G
roup at 31 Dec
embe
r 202
1
. T
he
equ
ity s
hare c
apit
al of the
se enti
ties is s
hown in t
he perc
enta
ge colu
mns. A
ll com
pani
es are i
ncor
porate
d in their p
rinc
ipal c
ountr
y
of operation
ex
cept where stat
ed.
England
%
US
%
Glaxo Group Limited
Glaxo Operations U
K Limited
GlaxoSmithKline Capital plc
GlaxoSmithKline Consumer Healthcare Holdings Limited*
GlaxoSmithKline Consumer Healthcare (U
K) T
rading Limited
GlaxoSmithKline Consumer T
rading Services Limited
GlaxoSmithKline Export Limited
GlaxoSmithKline Finance plc
Gla
xoSmithKline Holdings Limited*
GlaxoSmithKline Research & Development Limited
GlaxoSmithKline Services Unlimited*
GlaxoSmithKline
UK Limited
GlaxoSmithKline US T
rading Limited
Glaxo W
ellcome UK Limited
Setﬁrst Limited
SmithKline Beecham Limited
V
iiV Healthcare Finance Limited
V
iiV Healthcare Limited
V
iiV Healthcare U
K Limited
1
00.00
1
00.00
1
00.00
1
00.00
68.00
68.00
1
00.00
1
00.00
1
00.00
1
00.00
1
00.00
1
00.00
1
00.00
1
00.00
1
00.00
1
00.00
7
8.30
7
8.30
7
8.30
Alacer Corp
Block Drug Company
, Inc.
Corixa Corporation
GlaxoSmithKline Capital Inc.
GlaxoSmithKline Consumer Healthcare Holdings (US) LL
C
GlaxoSmithKline Consumer Healthcare, L.P
.
GlaxoSmithKline Holdings (Americas) Inc.
GlaxoSmithKline LL
C
Human Genome Sciences, Inc.
GS
K Consumer Health, Inc.
GS
K Equity Investments, Limited
Stiefel Laboratories, Inc.
T
esaro, Inc.
V
iiV Healthcare Company
68.00
68.00
1
00.00
1
00.00
68.00
59.8
4
1
00.00
1
00.00
1
00.00
68.00
1
00.00
1
00.00
1
00.00
7
8.30
Europe
%
Others
%
GlaxoSmithKline Biologicals SA (Belgium)
GlaxoSmithKline Santé Grand Public (France)
Laboratoire GlaxoSmithKline (France)
V
iiV Healthcare SAS (France)
GlaxoSmithKline Consumer Healthcare GmbH & Co. KG (Germany)
GlaxoSmithKline GmbH & Co. KG (Germany)
GS
K V
accines GmbH (Germany)
GlaxoSmithKline Consumer Healthcare S.r
.l (Italy)
GlaxoSmithKline S.p.A. (Italy)
GS
K V
accines S.r.l. (Italy)
V
iiV Healthcare S.r
.l. (Italy)
Pﬁzer Consumer Manufacturing Italy S.r.l. (Italy)
GS
K Services Sp z o.o. (P
oland)
GlaxoSmithKline T
rading Services Limited (Republic of Ireland)**
GlaxoSmithKline Healthcare AO (Russia)
JS
C GlaxoSmithKline T
rading (Russia)
GlaxoSmithKline S.A. (Spain)
Laboratorios V
iiV Healthcare, S.L. (Spain)
GS
K Consumer Healthcare SARL (Switzerland)
1
00.00
68.00
1
00.00
7
8.30
68.00
1
00.00
1
00.00
68.00
1
00.00
1
00.00
7
8.30
68.00
1
00.00
1
00.00
68.00
1
00.00
1
00.00
7
8.30
68.00
GlaxoSmithKline Australia Pty Ltd (Australia)
GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (Australia)
GlaxoSmithKline Brasil Limitada (Brazil)
GlaxoSmithKline Consumer Healthcare U
L
C/GlaxoSmithKline Soins
De Sante Aux Consommateurs S
RI (Canada)
GlaxoSmithKline Inc. (Canada)
I
D Biomedical Corporation of Quebec (Canada)
PF Consumer Healthcare Canada U
L
C/P
F Soins De Sante
SR
I (Canada)
GlaxoSmithKline Limited (China (Hong Kong))
Sino-American Tianjin Smith Kline & Frenc
h Laboratories Ltd (China)
W
yeth Pharmaceutical Co. Ltd (China)
GlaxoSmithKline Asia Private Limited (India)
GlaxoSmithKline Pharmaceuticals Limited (India)
GlaxoSmithKline Consumer Healthcare Japan K.K. (Japan)
GlaxoSmithKline K.K. (Japan)
GlaxoSmithKline Pakistan Limited (Pakist
an)
Glaxo W
ellcome Manufacturing Pte Ltd. (Singapore)
GlaxoSmithKline Korea Limited (Republic of K
orea)
1
00.00
68.00
1
00.00
68.00
1
00.00
1
00.00
68.00
1
00.00
3
7.
4
0
68.00
1
00.00
75.00
68.00
1
00.00
82.60
1
00.00
1
00.00
*
Dire
ctly h
eld who
lly-ow
ned su
bsid
iar
y of Gla
xo
Smith
Kli
ne plc.
*
*
Hea
d ofﬁ
ce in E
ngland
.
Th
e subsi
diar
ies an
d ass
ociate
s listed a
bove pri
ncipa
lly af
fect t
he ﬁgur
es in the G
roup’s ﬁna
ncial s
tateme
nts. E
ach of
Gl
axo
Smith
Kli
ne Cap
ital I
nc., G
la
xoSm
ithK
line C
apita
l plc an
d Gla
xoS
mithK
line L
LC, is a wh
olly-
owned ﬁ
nanc
e subsi
diar
y of th
e
co
mpany, and the c
ompa
ny has fu
lly and un
cond
itiona
lly gu
arante
ed the se
curi
ties i
ssue
d by each of G
la
xoSm
ithK
line C
apit
al Inc
.,
Gla
xoSmithKline Capital plc and Gla
xoSmithKline LLC.
Se
e pages 29
9 to 3
1
0 fo
r a comp
lete list o
f subsi
diar
y und
er
tak
ings
, ass
ociate
s and joi
nt ventur
es, w
hich for
m par
t of the
se
ﬁnancial stat
ements.
24
8
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
Th
e Group i
s involved i
n signi
ﬁc
ant leg
al and ad
minis
trative
proceedings, principally product
liability
, i
ntellect
ual propert
y
,
ta
x, an
ti-t
rust, consumer fraud and
gov
ernmental in
vestigat
ions.
Th
e most si
gniﬁ
cant o
f thes
e matter
s, oth
er than t
a
x matter
s,
are d
escr
ibed b
elow. The G
roup ma
kes prov
ision f
or thes
e
proceedings on a
regular basis as
summarised in Not
e 2,
‘
Acco
unting p
rinci
ples a
nd poli
cies’ a
nd Note 31
, ‘O
ther
provisions
’
. Note 2
also describes when disclosure
is made
of
proceedings for
which there
is no
provision.
Legal expenses
incurred and p
rovisions
related
to
legal claims
are charged t
o
sel
ling, g
ener
al and ad
minis
tratio
n cost
s. Th
e Group d
oes no
t
bel
ieve that in
format
ion abo
ut the am
ount so
ught by pla
intif
fs
,
if th
at is kn
own, woul
d be mea
ningf
ul with r
espe
ct to tho
se
leg
al pro
ceed
ings
. This i
s due to a numb
er of fac
tors
, inclu
ding,
but n
ot limite
d to, the sta
ge of pro
ceed
ings
, the enti
tleme
nt of
parties to appeal
a decision
and clarity as t
o t
heories of
liability
,
dam
ages a
nd gover
ning law.
At 3
1 De
cemb
er 202
1
, the Gro
up’
s aggre
gate prov
ision fo
r lega
l
and o
ther dis
putes (not in
cludi
ng ta
x mat
ters de
scri
bed in N
ote
1
4
, ‘T
a
xat
ion’) was £1
9
6 milli
on. Th
ere ca
n be no as
sur
ance th
at
any lo
sse
s that re
sult fr
om the outc
ome of a
ny legal p
roce
eding
s
wil
l not exce
ed by a mater
ial amo
unt the am
ount of th
e provis
ions
rep
or
ted in the G
roup’s ﬁnan
cial s
tatemen
ts. I
f this wer
e to
hap
pen, i
t could h
ave a materi
al adver
se imp
act on th
e resu
lts
of op
erati
ons of the G
roup in t
he repo
rt
ing per
iod in w
hich the
jud
gemen
ts are in
curre
d or the s
ettle
ments e
ntered i
nto.
Intellectual property
Intellectual
propert
y
claims include
challenges t
o the
validity
and e
nforc
eabi
lity o
f the Gro
up’
s patents o
n vario
us pro
ducts
or pr
oce
sses a
s well a
s ass
er
tions of n
on-in
fring
ement o
f those
paten
ts. A lo
ss in any o
f these c
as
es coul
d resu
lt in los
s of
paten
t protec
tion for t
he prod
uct at is
sue. T
he con
seque
nce
s
of any s
uch los
s coul
d be a sig
niﬁc
ant de
crea
se in s
ales o
f that
product and cou
ld mat
erially affect futu
re results o
f operation
s
for the
Group.
Coreg
In 201
4, G
SK ini
tiated s
uit aga
inst T
eva for indu
cing
inf
ringe
ment of i
ts patent r
elating to t
he use of c
ar
vedil
ol
(Core
g) in de
crea
sing m
or
tali
ty ca
used by c
onge
stive he
ar
t
fai
lure. I
n June 201
7
, the c
ase p
roce
eded to a j
ury t
rial i
n the
US D
istri
ct Co
ur
t for the Di
stri
ct of De
laware. T
he jur
y ret
urned
a verd
ict in G
SK’s favou
r
, awa
rding G
SK lo
st pro
ﬁts and
re
ason
able roya
ltie
s for a total aw
ard of $235
.5
1 millio
n. On 29
Ma
rch 201
8
, the tri
al jud
ge rule
d on pos
t
-tria
l motion
s ﬁled by
T
ev
a and foun
d that sub
stan
tial evi
denc
e at tria
l did not su
ppor
t
the ju
ry
’
s ﬁndi
ng of indu
ced in
fring
ement
, over
turni
ng the jur
y
award
. GSK a
ppe
aled
, and on 2 Oc
tober 2020, a d
ivid
ed pane
l
of the C
our
t of A
ppea
ls for the F
eder
al Cir
cuit reve
rse
d the
dis
tric
t cour
t’s rul
ing and r
einst
ated the ju
ry awa
rd in GS
K’s
favour. On 2 De
cemb
er 2020, T
eva ﬁled a p
etitio
n for rehe
ari
ng
en ba
nc. T
he cour
t gr
anted T
eva
’s petiti
on, bu
t only for a
rehearing by
the t
hree-member panel th
at issued t
he original
dec
isio
n. On 5 Aug
ust 2021
, th
e origi
nal pa
nel is
sued i
ts
reh
eari
ng opin
ion whe
re the ma
jori
ty aga
in rei
nstate
d the jur
y’s
dam
ages awa
rd of $235
.5
1 m
illio
n in GSK
’s favour
. T
eva a
gain
ﬁle
d a petit
ion for r
ehea
ring en b
anc whi
ch was r
ejec
ted by the
Co
ur
t of App
eals fo
r the Fed
eral C
ircui
t on 1
1 F
ebru
ar
y 2022.
Dolutegravir Proceedings
–
Tivicay/T
riumeq
In 201
7
, Vi
iV He
althc
are re
cei
ved patent c
halle
nge let
ters u
nder
the H
atch-W
a
xman A
ct from C
ipla
, Dr. Redd
y’
s L
abs an
d Apotex
for
T
riumeq
an
d
Tivi
cay
; let
ters fr
om Lupi
n and My
lan for
T
riumeq
;
and a l
etter f
rom Sa
ndoz for
T
ivic
ay
. Vii
V Hea
lthca
re lis
ts two
paten
ts in the F
D
A Or
ange Bo
ok for
T
ivic
ay
and
T
riumeq
.
One p
atent cove
rs the m
olecu
le dolu
t
egr
avir and e
xpire
s on
5 Oc
t
obe
r 202
7
. Th
e seco
nd patent c
laim
s a cry
stal f
orm of
dol
utegrav
ir and ex
pires o
n 8 Dec
ember 2029
. All the l
etter
s
cha
lleng
ed only t
he later-ex
pirin
g cr
ystal f
orm pate
nt. Sever
al of
the g
eneri
c comp
anie
s alleg
e only th
at the cr
yst
al form p
atent is
inval
id, wh
ile othe
rs cla
im the cr
ys
tal for
m patent is b
oth invali
d
and n
ot infr
inged by th
eir pro
pose
d prod
ucts
. In 201
7
, ViiV
Healthcare ﬁled pa
tent
infringem
ent suit
s again
st all
six generic
co
mpani
es. S
ettl
ement
s have been r
each
ed in all l
itigat
ions
.
In S
eptemb
er 202
1
, ViiV H
ealt
hcar
e rece
ived a pa
ragr
aph IV
let
ter fro
m Lupin r
elatin
g to the
Tiv
ic
ay
5mg
dosage for oral
sus
pens
ion, ch
alle
nging on
ly the cr
yst
al for
m patent. O
n 2
Nove
mber 2021
, V
iiV H
ealth
car
e ﬁled su
it agai
nst Lu
pin in the
US D
istri
ct Co
ur
t for the Di
stri
ct of De
laware. N
o tria
l date ha
s
yet be
en set
.
–
Dova
to
In S
eptemb
er 20
1
9
, ViiV H
ealt
hcar
e rec
eived a pa
ragr
aph I
V
letter from
Cipla relat
ing t
o
Dovato
a
nd cha
llengi
ng only th
e
cr
yst
al form p
atent. O
n 4 Novemb
er 20
1
9, ViiV H
eal
thca
re ﬁle
d
sui
t again
st Cipl
a in the US D
istr
ict C
our
t for the D
istr
ict of
De
laware. N
o tria
l date has ye
t been s
et.
–
Juluc
a
In J
anuar
y 2020, V
iiV He
alth
care r
ecei
ved a pa
ragra
ph IV l
etter
from Lupin
relating
to
Juluc
a
and cha
lleng
ing the c
rys
tal for
m
paten
t as well a
s a patent r
elating to t
he comb
inatio
n of
dol
utegrav
ir and ri
lpivi
rine th
at expir
es on 24 Janu
ar
y 203
1
. On
28 Feb
ruar
y 2020, V
iiV He
alth
care ﬁ
led su
it agai
nst Lup
in on
both p
atents
. Addit
ional
ly
, on 1
2 J
une 2020, Ci
pla sen
t ViiV
He
althc
are a p
aragr
aph I
V lette
r related to
Ju
luca
, a
nd on 22 Jul
y
2020, Vi
iV He
althc
are ﬁ
led sui
t again
st Cipl
a in fede
ral c
our
t in
De
laware. T
he cou
rt h
as yet to set a t
rial d
ate in eith
er mat
t
er.
–
Litigation
Against
Gilead Sciences, Inc.
On 7 F
ebru
ar
y 20
1
8
, Vii
V Heal
thca
re ﬁle
d patent inf
ring
ement
litigat
ion regardin
g bict
egravir
against
Gilead Sciences, Inc.
(Gile
ad) in the U
S Dist
rict C
our
t for the D
istr
ict of D
elawar
e
and Canad
ian f
ederal court. ViiV Healthcare
alleged
that
Gil
ead’s tri
ple co
mbinati
on HI
V drug c
onta
ining th
e HI
V
integrase inhibitor bict
egravir infringes ViiV Healthcare’s
patent
covering dolut
egravir and o
ther compounds that include
dolutegra
vir’s
unique chemical scaffold. ViiV Healthcare also
co
mmenc
ed act
ions in th
e UK
, Fra
nce, G
erma
ny
, Japa
n, Ire
land
,
Sou
th Korea a
nd Aust
rali
a again
st Gile
ad, a
llegin
g that Gil
ead’s
Bik
ta
rv
y inf
ringe
s cer
ta
in of Vii
V Hea
lthc
are’s HI
V integra
se
inhi
bitor pa
t
ent
s. Vii
V Hea
lthc
are ha
s agre
ed to set
tle the gl
obal
paten
t infringemen
t litiga
tion between GSK, Shionogi (
a
sha
reho
lder of V
iiV He
alth
care) and G
ilead c
once
rning V
iiV
Healthcare’
s
pat
ents r
elating
to
dolut
egra
vir
.
Details regard
ing
the gl
obal s
ettl
ement a
nd lic
ensin
g agree
ment c
an be foun
d in
Note 47
, ‘Pos
t bala
nce sh
eet event
s’
.
46
. Legal pr
oceedings
GS
K Ann
ual R
epor
t 2021
249
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
Product liability
Th
e Group i
s curr
ently a de
fenda
nt in a numb
er of pro
duct
liability la
wsuits.
Avandia
Th
ere are t
wo pen
ding US c
las
s actio
ns brou
ght by thir
d-par
t
y
payer
s whic
h ass
er
t clai
ms unde
r the Rac
keteer In
ﬂuen
ced
and C
orr
upt Or
ganiz
ation
s Act (R
ICO) and s
tate con
sumer
prote
ctio
n laws. I
n Dec
embe
r 20
1
9, th
e Third C
ircui
t Cou
rt of
Ap
peal
s revers
ed the s
ummar
y jud
geme
nts gra
nted in favour
of the G
roup a
nd rema
nded th
e third
-par
t
y payer ca
ses b
ack
to dis
trict c
our
t. Di
scove
ry is u
nder
way in th
e distr
ict co
urt b
ut
no tr
ial date
s have yet bee
n set. I
t is pos
sibl
e that a cla
ss
ce
rti
ﬁca
tion he
aring w
ill be h
eld in ea
rly 2023
.
PP
I litigation
Ce
rt
ain me
mber
s of the G
roup ar
e defend
ants in t
he ongoi
ng
proto
n pump in
hibitor (
PPI) l
itigat
ion, in w
hich p
lainti
ff
s alle
ge
that th
eir us
e of PP
Is cau
sed se
riou
s bodil
y injur
ies
, inclu
ding
acute kidney inj
ur
y
, chronic kidney diseas
e
and end-stage
renal failure.
As of
January 202
2, there
are appro
ximat
ely 1
,50
0
Prevacid
2
4HR personal inju
r
y
lawsu
its and
approximat
ely
2,
300 N
exium 24HR c
ase
s pend
ing aga
inst the G
roup, n
earl
y
all o
f which a
re pen
ding in a M
ultidi
stri
ct Lit
igatio
n (MD
L)
pro
ceed
ing in th
e Distr
ict of N
ew Jer
sey
. Ma
nufac
turer
s of othe
r
PP
Is
, inclu
ding bot
h pres
cript
ion and OTC pr
oduct
s, als
o are
nam
ed as c
o-de
fenda
nts in the M
DL
. Th
e Grou
p has ﬁl
ed
moti
ons to dis
miss s
everal h
undre
d cas
es, b
ut the M
DL co
urt
ha
s not yet rul
ed on tho
se moti
ons. T
he ﬁr
st PP
I bell
wether
tri
al was d
elayed du
e t
o the o
ngoing C
OVI
D-
1
9 pa
ndemi
c
and i
s now set fo
r Octobe
r 2022 but wil
l not involve th
e Grou
p.
In a
dditio
n to the MD
L ca
ses
, a smal
l numbe
r of cas
es ar
e
pending in stat
e courts
.
Zantac
In 201
9
, the Gro
up was c
ontac
ted by sever
al regu
lator
y
authorities
regarding
the de
tection
of N-Nitroso-dimeth
ylamine
(ND
MA) i
n
Zant
ac
(
ranit
idine
)
products. Based on in
formation
avail
able at th
e time an
d corr
espo
ndenc
e with r
egulato
rs, t
he
Group made t
he decision
to
suspend the
release, distribution
and s
upply o
f all dos
e form
s of
Zant
ac
to all mar
kets pen
ding
the ou
tcome o
f the ongo
ing test
s and inve
stigat
ions
. Also
, as
a precautionary action, the
Group made
the decision
to
initiat
e
a volun
tar
y pha
rmacy/ret
ail level r
eca
ll of
Za
ntac
products
globally
.
On 3
0 Apri
l 2020, the Eur
opea
n Medi
cine
s Agenc
y (EMA)
recommended the suspen
sion of
ranitidine medici
nes.
Following
the publ
ication of
the EMA
’s recommenda
tion,
the Company
communicated
a decision
not t
o re-ent
er the
mar
ket. I
n the US
, FDA requ
ested th
at all ma
nufac
turer
s
wit
hdraw r
aniti
dine pro
duct
s from the m
arket
.
Th
e Group h
as be
en name
d as a def
endan
t in appr
oximatel
y
2,
1
50 U
S pers
onal i
njur
y cla
ims and nu
merou
s unﬁl
ed cla
ims
reg
istere
d in a cen
sus re
quire
d by the Co
urt p
resi
ding over t
he
Za
ntac
Multidistrict Litigat
ion (MDL) proceeding. Class action
s
all
eging e
cono
mic inju
ry a
nd a third
-par
t
y payer cla
ss ac
tion
als
o have bee
n ﬁled in f
eder
al cour
t
. Outsi
de the US
, ther
e
are t
hree cl
ass a
ction
s pendi
ng agai
nst the G
roup in C
anad
a,
alo
ng with a c
las
s actio
n in Is
rael. A
mong t
he state c
our
t cas
es
nam
ing the G
roup, the ﬁ
rst b
ellwet
her tri
al in Ca
lifor
nia is
cur
rentl
y sche
duled to be
gin 1
0 Octob
er 2022 and a tr
ial
ha
s been s
chedu
led in M
adis
on Cou
nty, Illi
nois to pro
cee
d
on 22 Aug
ust 2022.
On 6 F
ebru
ar
y 2020, the US p
roduc
t liabi
lity l
itigat
ion was
as
sign
ed MD
L statu
s in the So
uther
n Dis
trict o
f Flor
ida
. The
Gr
oup has ﬁ
led seve
ral ro
unds of M
otion
s to Dismi
ss in th
e
M
DL re
sultin
g in the foll
owing p
ositi
on: 1
) th
e Cour
t ru
led in
favour o
f the Gro
up’
s motio
n on innovato
r liabi
lity; th
at iss
ue
is on a
ppea
l
; 2) the Co
urt r
uled i
n favour of De
fenda
nts wit
h
re
spec
t to the Thir
d Par
ty P
a
yor Cl
ass A
ction; Pl
ainti
ff
s opted
not to re
plea
d their ac
tion a
nd thes
e issu
es are n
ow on app
eal;
3) the Co
ur
t dismi
ssed R
IC
O cla
ims fro
m the Eco
nomic L
oss
Cla
ss Ac
tion bu
t allowe
d the cla
ss to move for
wa
rd on pla
intif
fs
mis
bran
ding the
or
y; and 4
) the M
edic
al Mo
nitori
ng and
Ec
onomi
c Loss c
las
s actio
ns are a
llowed to move fo
rwa
rd.
Generics
,
retailers and
packagers hav
e been dism
issed from
the
cases.
In th
e MD
L, p
lainti
ff
s were re
quire
d to ident
ify t
he ty
pes of
ca
ncer th
at they wi
shed to pu
rsue a
nd iden
tiﬁe
d 1
0 di
ff
erent
types
.
In November
20
2
1
, plaintiffs withdrew from
consideration
bre
ast c
anc
er and k
idney c
ance
r
, reduc
ing the nu
mber of t
ype
s
of c
ance
r from 1
0 to 8. I
n Janua
ry 2022, p
laint
iff
s with
drew fro
m
considerat
ion colorectal,
prostat
e an
d lu
ng and
will
proceed
onl
y as to the fol
lowing ﬁ
ve ty
pes of c
ance
r: blad
der
,
esophageal, gastric,
liv
er and
pancreat
ic.
In a
dditio
n to the cla
ss ac
tion li
tigati
on, on 20 M
arch 2020
,
the D
epar
tme
nt of Jus
tice (D
OJ) sent th
e Group n
otice o
f a civil
inves
tigati
on it ha
d opene
d into all
egatio
ns of Fal
se Cla
ims Act
violations
by t
he Group
related
to
Za
ntac
. On 18 June 2020,
the D
OJ ser
ved a Ci
vil Inve
stiga
tive Dem
and on th
e Grou
p,
for
maliz
ing its re
ques
t for doc
ument
s. On th
e same d
ay
, the
New M
exic
o Attor
ney Gen
eral ﬁ
led a laws
uit aga
inst mu
ltipl
e
defe
ndant
s, inc
ludin
g the Gro
up, alle
ging vi
olatio
ns of sta
te
consumer prot
ection and
false adv
ertising statutes, among
other claims.
46. Legal proceedings
continued
25
0
GS
K Ann
ual R
epor
t 2021
Notes to the ﬁnancial statements
continued
46. Legal proceedings
continued
Zofran
Th
e Group wa
s a defe
ndant i
n over 400 p
roduc
t liabi
lit
y cas
es
invol
ving Zof
ran pe
nding i
n a Multi
distr
ict Li
tigati
on (M
DL)
pro
ceed
ing in th
e Distr
ict of M
as
sach
uset
ts. T
he ca
ses al
leged
that c
hildr
en suf
fere
d bir
th defe
cts du
e t
o the
ir mothe
rs’
ingestion of
Zofran and/
or generic ondansetron f
or pregnancy
-
rel
ated naus
ea and vo
mitin
g. Pla
intif
fs a
sse
rted t
hat the G
roup
sol
d Zofra
n know
ing it wa
s unsaf
e for pre
gnant wom
en, fa
iled
to war
n of the ris
ks and i
llega
lly mar
keted Zof
ran “of
f-lab
el” for
use by p
regn
ant wome
n.
On 1 J
une 202
1
, the MD
L Co
urt g
rante
d the Gro
up’
s motio
n for
summary judgment on f
ederal pre-emption g
rounds. The Court
foun
d that the F
D
A was f
ully inf
orme
d of all re
levant s
afety
information
regarding Z
ofran and ha
d repeat
edly reject
ed any
at
tempt to add a b
irt
h defec
t warni
ng to the lab
el. Th
e Cou
rt
gra
nted jud
gment fo
r the Gr
oup in all c
ase
s pend
ing in the M
DL
and c
lose
d the MD
L pro
ceed
ing. O
n 1 July 2021
, P
laint
if
fs ﬁle
d
an appeal of
the preempt
ion decision t
o t
he Unit
ed Stat
es
Co
ur
t of App
eals fo
r the Fir
st Ci
rcuit
. The ap
peal i
s pendi
ng.
Th
e Group i
s also a d
efenda
nt in t
wo state co
ur
t cas
es and
four p
ropo
sed cla
ss ac
tions i
n Cana
da.
Sales and marketing and regulation
Th
e Group’s mar
keting an
d promo
tion of it
s Phar
mace
utic
al
and Vacc
ine pro
ducts a
re the su
bjec
t of cer
tai
n govern
menta
l
inv
estigations
and privat
e la
wsuits
brought
by
litigants
under
var
ious the
orie
s of law.
G
S
K K
or
ea – Proceedings under F
air T
rade Laws
In Au
gust 2020, G
SK Kor
ea was in
dicted u
nder Kor
ea’
s
Monopoly Regulat
ion and Fair
T
rade laws
in rela
tion t
o
gover
nment te
nder
s of HP
V (
Cervarix
) and PC
V
(
S
ynﬂorix
)
vac
cines i
n 20
1
8 a
nd 20
1
9. T
he pro
secu
tor has a
llege
d that
GS
K Korea
, thro
ugh the a
ction
s of at lea
st one of i
ts
emp
loyees
, inter
fer
ed with t
he tende
r proc
ess un
der the
National Immunisat
ion Programme b
y using
“straw
bidders.
”
One e
mploye
e also h
as bee
n char
ged in hi
s indiv
idua
l capa
cit
y
by the p
rose
cutor in re
latio
n t
o the s
ame mat
ter
. Fur
the
r
, a
numb
er of wh
oles
aler
s are c
o-de
fenda
nts in the p
roce
eding
s.
Th
e K
ore
a Fair T
rad
e Comm
iss
ion als
o has c
ommen
ced an
inves
tigati
on of GS
K Korea r
egar
ding the s
ame m
atter. GSK
Kore
a is coo
perat
ing wit
h the auth
oriti
es on th
ese mat
ters
.
Proce
edings are ongoing.
Anti-trust/competition
Ce
rt
ain gove
rnme
ntal ac
tions a
nd pri
vate lawsuit
s have been
bro
ught aga
inst th
e Grou
p alleg
ing vio
lation o
f comp
etitio
n or
anti-trust laws
.
U
K Competition and Markets Authority investigation
On 1
2 Febr
uar
y 20
1
6, the U
K Com
petiti
on and M
arket
s
Auth
orit
y (
CM
A) is
sued a de
cisi
on ﬁnin
g the Gr
oup £
3
7
.6
million
for infrin
gement of
the Competition
Act, in
connection
wit
h agree
ments to s
ettl
e patent dis
putes t
he Grou
p entere
d
into in 20
0
1 and 20
02 with p
otentia
l suppli
ers of g
ener
ic
paroxet
ine fo
rmulations.
Th
e Group a
ppea
led to the C
omp
etitio
n Appe
al T
ribun
al (
CA
T),
whi
ch deli
vered i
ts init
ial jud
gemen
t on 8 Ma
rch 201
8 bu
t
refe
rred c
er
tai
n quest
ions of l
aw t
o the Eu
rope
an Unio
n Cou
rt
of Ju
stic
e (ECJ). On 30 J
anuar
y 2020, th
e ECJ iss
ued its
judgement endo
rsing, in general, t
he approach
undertaken by
the C
MA in i
ts ori
ginal d
ecisi
on. O
n 1
0 M
ay 202
1
, th
e CA
T
del
ivere
d its ﬁna
l judge
ment an
d held th
at GSK h
ad infr
inged
app
lica
ble co
mpeti
tion law b
ut redu
ced the ﬁ
ne imp
osed o
n
the Group
from £37
.6 million
to
£22.2 m
illion. This
litigat
ion is
now
closed.
Lamictal
Pu
rpor
ted cl
ass
es of dir
ect pu
rcha
ser
s ﬁled su
it in the U
S
Di
stric
t Cou
rt fo
r the Dis
tric
t of New Je
rsey a
llegin
g that the
Group and T
ev
a Pharmaceuticals unla
wfully conspired to
delay
generic competition
for
Lam
ictal
,
resulting in
ov
ercharges t
o
the pu
rcha
ser
s, by ente
ring into a
n alleg
edly a
nti-c
ompet
itive
rever
se pay
ment set
tle
ment to re
solve p
atent infr
ingem
ent
liti
gatio
n. A sep
arate co
unt acc
uses th
e Grou
p of mono
polis
ing
the m
arket
.
On 1
3 Dec
embe
r 20
1
8
, the tr
ial jud
ge gra
nted pla
intif
fs’ cl
ass
cer
tiﬁcation
motion, certif
yin
g a class of
direct purchasers. The
Gr
oup ﬁle
d a Rule 23
(
f) moti
on in the C
our
t of A
ppea
ls for the
Third Circuit, chal
lenging t
he class certiﬁ
cat
ion decision. On
22 Apr
il 2020, the C
our
t of Ap
peal
s vacated t
he lower c
our
t’s
gra
nt of cla
ss c
ert
iﬁc
ation a
nd rema
nded th
e issu
e back to th
e
lower
court for further analysis.
On 9 O
ctober 2020
, the dis
trict c
our
t hea
rd arg
ument on
plaintiffs’ renew
ed mot
ion for
class cer
tiﬁcation
after remand.
On 9 A
pril 2021
, the dist
rict c
our
t deni
ed Pla
intif
fs’ mo
tion for
cla
ss c
ert
iﬁc
ation of t
he puta
tive dire
ct pur
chas
er cla
ss
, leavin
g
a poten
tial cl
ass o
f bran
d-onl
y purch
ase
rs. P
laint
if
fs moved to
supplement t
heir expert report and seek additional
discov
ery
to
support the addition
of certain generic purchasers. On 2
1
Jan
uar
y 2022, the di
stric
t cour
t de
nied P
lainti
ff
s’ motion to
supplement t
heir expert report and seek additional
discov
ery
and h
eld that t
he iss
ue of gen
eric pu
rcha
ser
s had alr
eady b
een
dec
ided a
nd deni
ed in the c
our
t’s ruli
ng on dec
er
tiﬁ
catio
n. The
par
ti
es will n
ow move to brie
ﬁng on c
las
s cer
tiﬁ
cati
on as to the
remaining brand-only
purchasers.
GS
K Ann
ual R
epor
t 2021
2
51
Notes to the ﬁnancial statements
continued
Strategic report
Governance and remuneration
Financial statements
Investor information
4
7
. Post balance sheet e
v
ents
.
On 1 F
ebru
ar
y 202
2, V
iiV He
althc
are r
eache
d agre
ement w
ith Gil
ead to set
tle th
e globa
l patent in
fring
ement l
itigat
ion rel
ating to
the commercialisation
of Gilead’
s Bik
tarv
y concerning
ViiV Healthcare’
s pa
tent
s relat
ing t
o dolut
egravir
, an anti-ret
roviral medicat
ion
use
d, toge
ther wi
th other m
edici
nes
, t
o tre
at human i
mmuno
deﬁc
iency v
irus (H
IV
). Und
er the ter
ms of the gl
obal s
ettl
ement a
nd
lic
ensin
g agree
ment
, Gile
ad made a
n upfro
nt payme
nt of $1
.
25 billio
n to ViiV H
eal
thca
re on 1
5 Febr
uar
y 2022. In a
dditio
n, Gil
ead
wil
l also pay a 3
% royalt
y on all f
uture U
S sale
s of Bik
ta
rv
y and i
n resp
ect of t
he bicte
gravir c
ompo
nent of a
ny other fu
ture
bic
tegravi
r
-c
ontai
ning pro
duct
s sold in th
e US. T
hes
e royalti
es will b
e payabl
e by Gile
ad to Vii
V Hea
lthca
re fro
m 1 Febr
uar
y 2022
unti
l the expi
ry of V
iiV H
ealt
hcar
e’
s US Patent N
o. 8,
1
29,
385 o
n 5 Octobe
r 202
7
. Gi
lead’s obl
igatio
n to pay royalt
ies do
es not
extend int
o
any
period of
regulat
ory paediatric
ex
clusivity
, if
awarded.
Th
e sett
lemen
t resul
ted in a re
-mea
sure
ment of th
e exist
ing liab
iliti
es for c
onting
ent con
sider
ation a
nd the P
ﬁze
r put opti
on at the
202
1 yea
r end. T
he upfro
nt payme
nt is a co
ntinge
nt ass
et at the ba
lanc
e shee
t date as it
s rece
ipt was n
ot cons
idere
d vir
tual
ly
ce
rt
ain at that d
ate and the
refor
e it will b
e reco
gnise
d in Q
1 2022 as O
ther op
erati
ng inco
me. As a r
esul
t of the set
tlem
ent, p
atent
inf
ringe
ment c
ase
s in the US
, UK
, Fra
nce, I
rela
nd, G
erma
ny
, Japan
, Sout
h K
ore
a, Au
stra
lia
, and Ca
nada wi
ll be dis
conti
nued.
252
GS
K Ann
ual R
epor
t 2021
Notes
2021
£m
2021
£m
2020
£m
2020
£m
Fixed assets – investments
E
54
,995
54,9
92
Current assets:
T
rade and other receivables
F
2,
720
1,68
9
Cash at bank
17
14
T
otal current assets
2
,737
1,
703
T
rade and other payables
G
(59
8)
(531)
T
otal current liabilities
(59
8)
(531)
Net current assets
2,1
39
1
,
172
T
otal assets less current liabilities
5
7,
1
3
4
56,16
4
Provisions for liabilities
H
(1
2)
(7)
Other non-current liabilities
I
(4
58)
(457)
Net assets
56
,664
55,
700
Capital and reserves
Share capital
J
1,347
1,34
6
Share premium account
J
3,301
3,281
Other reserves
K
1,420
1,420
Retained earnings:
At 1 January
49,6
53
4
9,206
Proﬁt/(loss) for the year
4,942
3,8
93
Other changes in retained earnings
(3,99
9)
(3,44
6)
K
5
0,596
4
9,653
Equity shareholders’
funds
56,
664
55,
7
00
Th
e ﬁnanc
ial st
atement
s on page
s 252 t
o 256 wer
e approve
d by the Boa
rd on 28 Fe
brua
ry 2022 a
nd sign
ed on its b
ehal
f by
Sir Jonathan Symonds
Chairman
Gla
xoSmithKline plc
Registered
number:
38887
92
Compan
y s
tatemen
t of ch
ang
es in equ
it
y
for t
he y
ear ended 3
1 December 20
2
1
Share
capital
£m
Share premium
account
£m
Other
reserves
£m
Retained
earnings
£m
T
otal
equity
£m
At 1 January 2020
1,34
6
3,1
7
4
1,420
49,206
5
5,1
46
Proﬁt and T
otal comprehensive income attribut
able to shareholders
–
–
–
3,893
3,893
Dividends to shareholders
–
–
–
(3,9
7
7)
(3,97
7)
Shares issued under employee share schemes
–
29
–
–
29
T
reasury shares transferred to the E
SOP T
rusts
–
78
–
531
609
At 31 December 2020
1,3
46
3,281
1,420
49,653
5
5,
7
00
Proﬁt and T
otal comprehensive income attribut
able to shareholders
–
–
–
4,942
4,942
Dividends to shareholders
–
–
–
(3,99
9)
(3,999)
Shares issued under employee share schemes
1
20
–
–
21
At 31 December 2021
1,347
3,3
0
1
1,420
50,596
56,
664
Compan
y balance s
heet – UK GA
AP
(in
cludi
ng FRS 1
0
1 ‘Reduced Disclosure F
ramew
ork’) as at 3
1 D
ecember 2
0
2
1
GS
K Ann
ual R
epor
t 2021
253
Strategic report
Governance and remuneration
Financial statements
Investor information
A)
Pr
esentation of the ﬁnancial st
atements
Description of business
Gl
axo
Smith
Kli
ne plc is t
he pare
nt com
pany of GS
K
, a major
glo
bal he
althc
are gr
oup whi
ch is eng
aged i
n the cre
ation
and d
iscove
ry, develo
pment
, manu
factur
e and ma
rketing o
f
pharmaceutical products, including vaccines, ov
er-
the-counter
(
OT
C
) medicines
and health-related
consumer products.
Preparation of ﬁnancial statements
The ﬁnancial
statemen
ts, which
are prepared
using t
he
his
toric
al cos
t conven
tion (as mo
diﬁe
d to inclu
de the reva
luatio
n
of ce
rt
ain ﬁn
anci
al inst
rumen
ts
) and on a go
ing co
ncer
n basi
s,
are prepared
in accordance wit
h Financial
Reporting Standard
1
0
1 ‘Red
uced D
iscl
osur
e Frame
work’ a
nd with U
K acc
ountin
g
pre
sent
ation a
nd the C
ompan
ies Ac
t 2006 a
s at 3
1 Dec
embe
r
202
1
, with c
ompar
ative ﬁ
gures a
s at 3
1 Dec
embe
r 2020.
As p
ermit
ted by se
ctio
n 408 of th
e Comp
anie
s Act 200
6, the
inc
ome st
atement o
f the com
pany is no
t pres
ented in th
is
Annual Repor
t.
Th
e compa
ny is inc
luded i
n the Gro
up ﬁna
ncial s
tateme
nts of
Gla
x
oSmithKline plc, which are
publicly a
vailable.
Th
e followi
ng exempt
ions fr
om the re
quire
ments of I
FRS h
ave
be
en appl
ied in th
e prepa
ratio
n of thes
e ﬁnan
cial s
tateme
nts,
in ac
cord
ance w
ith FR
S 1
01
:
–
Par
agra
phs 45
(b
) a
nd 46 to 52 of IF
RS 2, ‘S
hare
-bas
ed
payment’
–
IF
RS 7
, ‘
Fina
ncial I
nstr
ument
s – Disc
losur
es’
–
Par
agra
phs 9
1
-99 of I
FRS 1
3, ‘
Fair va
lue me
asur
ement
’
–
Par
agra
ph 38 of I
AS 1
, ‘Pr
esent
ation o
f ﬁnanc
ial st
atemen
ts’
comparative i
nformation
requirements
in respect of
par
agra
ph 79(a) (iv) of IAS 1
–
Par
agra
phs 1
0(d), 1
0
(
f), 1
6, 38
(A), 38 (B to D), 40 (A to D),
1
1
1 an
d 1
34 to 1
36 of I
AS 1
, ‘Pr
esent
ation o
f ﬁnanc
ial
statemen
ts’
–
IA
S 7
, ‘State
ment of c
ash ﬂ
ows’
–
Par
agra
ph 30 and 31 of IA
S 8, ‘
Acco
unting p
olici
es, c
hange
s
in accounting estimates
and errors’
–
Par
agra
ph 1
7 of IA
S 2
4, ‘Re
lated pa
rt
y dis
closu
res’ and t
he
fur
the
r requi
reme
nt in IAS 24 to dis
close r
elated p
ar
ty
tra
nsac
tions e
ntered i
nto bet
ween t
wo or more m
embe
rs
of a Gr
oup.
Accounting convention and standards
The balance
sheet
has been p
repared usi
ng t
he hist
orical
co
st conve
ntion an
d comp
lies w
ith app
lica
ble UK a
ccou
nting
standards.
Accounting principles and policies
Th
e prepa
ratio
n of the ba
lanc
e sheet i
n confo
rmit
y with
generally accepted
accounting
principles requires
management
to make e
stima
t
es a
nd as
sumpti
ons that af
fec
t the re
por
ted
amo
unts of a
sset
s and lia
biliti
es and d
iscl
osure o
f contin
gent
as
sets a
nd liab
ilitie
s at the date o
f the bal
ance s
heet
. Actual
amo
unts co
uld dif
fer f
rom tho
se est
imates
.
Th
e balan
ce she
et has b
een pr
epar
ed in ac
cord
ance w
ith the
co
mpany’s ac
counti
ng poli
cies a
pprove
d by the Boa
rd and
de
scrib
ed in N
ote B. Th
ese po
licie
s have bee
n cons
istentl
y
applied, u
nless ot
herwise stated.
Key accounting judgements and estimates
No key ac
coun
ting jud
geme
nts or es
timates we
re req
uired i
n
the c
urren
t year.
B)
Accounting policies
For
eign curr
ency transactions
Foreign currency
transactions are
recorded at t
he ex
change
rate r
uling on t
he date of tr
ansa
ction
. Fore
ign cur
rency a
sse
ts
and l
iabil
ities a
re tra
nslated a
t rates of exc
hange r
uling at t
he
balance sheet
dat
e.
Dividends paid and received
Di
vide
nds pai
d and re
ceive
d are inc
lude
d in the ﬁn
ancia
l
st
atements i
n the per
iod in w
hich th
e relate
d divid
ends a
re
actu
ally p
aid or re
cei
ved.
Expenditure
E
xpen
diture i
s rec
ognis
ed in re
spec
t of good
s and se
rv
ices
rec
eive
d when su
pplie
d in acc
orda
nce wi
th cont
ractu
al term
s.
Provision is
made when an
obligat
ion exists
for a
future
liability
in re
spec
t of a pa
st event an
d wher
e the amou
nt of the
obligation
can be reliably
estimated.
Investments in subsidiary companies
Inve
stmen
ts in sub
sidia
ry c
ompa
nies a
re held a
t cost l
ess a
ny
provision f
or impairment
and also
includes a
capital contribution
in relat
ion t
o mov
ements
in contin
gent consideratio
n.
Impairment of investments
Th
e carr
yi
ng value o
f investm
ents ar
e reviewe
d for imp
airme
nt
whe
n there i
s an indi
cati
on that the i
nvestm
ent migh
t be
imp
aire
d. One of t
he as
ses
sment m
ethods u
sed is to c
ompa
re
the c
arr
yin
g value of e
ach inve
stment a
gains
t its sh
are of th
e
net a
sset
s value of t
he invest
ment or a
gains
t its sha
re of the
valu
ation of t
he subs
idia
ry b
ased o
n expec
ted dis
counte
d cas
h
ﬂows
. The tot
al amo
unt of inve
stment
s is als
o evaluate
d again
st
the G
roup’s valuati
on on the b
asi
s of overal
l market
capitalisation. Any i
mpairment charge
is recognised in
the
inc
ome st
atement i
n the yea
r conc
erne
d.
Share-based payments
Th
e issu
ance by th
e comp
any to its su
bsidi
arie
s of a gra
nt
over
the compan
y’
s shares, represents
additional capital
contribution
s by
the
company
in its
subsidiaries. An add
itional
inv
estment i
n subsidiaries
results in
a correspondin
g increase
in shareholders’
equity
. The
additional capital cont
ribution is
ba
sed on th
e fair va
lue of the g
rant is
sue
d, allo
cated ove
r the
underlying grant’
s v
esting period.
Not
es to the co
mpa
n
y balance sh
eet –
UK GA
AP
(in
cludin
g FRS 1
0
1 ‘Reduced Disclosure Frame
w
ork’)
25
4
GS
K Ann
ual R
epor
t 2021
E)
Fixed assets – investments
2021
£m
2020
£m
Shares in GlaxoSmithKline Services Unlimited
637
6
37
Shares in GlaxoSmithKline Holdings (One) Limited
18
18
Shares in GlaxoSmithKline Holdings Limited
1
7
,888
1
7
,888
Shares in GlaxoSmithKline Consumer Healthcare Holdings Limited
34,8
00
34,800
Shares in GlaxoSmithKline Mercury Limited
33
33
53,37
6
53,37
6
Capital contribution relating to share-based payments
1,1
3
9
1,13
9
Contribution relating to contingent consideration
480
477
54,
995
5
4,992
F)
T
rade and other receivables
2021
£m
2020
£m
Amounts due within one year:
U
K Corporation tax recoverable
9
10
Amounts owed by Group undertakings
2,31
9
1,231
2,328
1,241
Amounts due after more than one year:
Amounts owed by Group undertakings
3
92
448
2,
720
1,68
9
Th
e movement i
n the Am
ounts owe
d by Group u
nder
tak
ing
s in the pe
riod
, as reﬂ
ected w
ithin N
otes 7 an
d 8, pri
mari
ly reﬂ
ects th
e
rec
eipt of d
ivid
end inc
ome fr
om subs
idiar
ies a
nd utili
satio
n of the co
mpany’s cur
rent ac
cou
nt to fund the p
ayment o
f the thir
d and
four
th in
terim 2020 di
viden
ds as we
ll as the ﬁ
rst a
nd sec
ond inter
im div
idend
s for 202
1
.
T
axation
Cur
rent t
ax i
s provid
ed at the a
mounts ex
pec
t
ed to be p
aid
app
lying t
ax r
ates tha
t have been e
nacted o
r subs
tanti
vely
ena
cted by the b
alan
ce she
et date.
Def
erre
d ta
x is provi
ded in f
ull, us
ing the li
abili
ty met
hod, o
n
temp
orar
y di
ffe
renc
es ari
sing be
twee
n the ta
x ba
ses of a
sse
ts
and l
iabil
ities a
nd thei
r car
ry
ing amou
nts in the ﬁ
nanc
ial
st
atements
. Def
erre
d ta
x ass
ets are o
nly rec
ogni
sed to the
extent tha
t the
y are considered
recoverable
against fut
ure
ta
xable
proﬁts.
Def
erre
d ta
x is mea
sure
d at the avera
ge ta
x rates t
hat are
exp
ected to ap
ply in th
e peri
ods in w
hich th
e t
emp
orar
y
differences are e
xpected
to
be real
ised or
settled. Def
erred
ta
x lia
biliti
es and a
ss
ets are no
t disc
ounted.
Financial guarantees
Li
abilit
ies re
lating to gu
ara
ntees is
sued by t
he com
pany on
behalf of
its subsid
iaries are in
itially
recognised a
t fair
value
and a
mor
tise
d over the li
fe of the gu
arante
e.
C)
Operating pr
oﬁt
A fee of £1
2,600 (2020 – £1
2,6
00) relati
ng to the aud
it of the
co
mpany ha
s been c
harg
ed in op
eratin
g proﬁ
t.
D)
Dividends
The directors
declared four
interim
dividends result
ing in
a
div
idend f
or the yea
r of 80 pe
nce, i
n line wi
th the div
iden
d for
2020. Fo
r fur
ther de
tail
s, see N
ote 1
6 to th
e Grou
p ﬁnanc
ial
statemen
ts, ‘Dividends’
.
Notes to t
he company balance she
et – UK GA
AP
(including FRS 1
0
1 ‘
Reduced Disc
losure Framework’) continued
GS
K Ann
ual R
epor
t 2021
255
Strategic report
Governance and remuneration
Financial statements
Investor information
G)
T
rade and other payables
2021
£m
2020
£m
Amounts due within one year:
Other creditors
4
57
511
Contingent consideration payable
22
20
Amounts owed to Group undertakings
119
–
598
531
Th
e compa
ny has gu
aran
teed deb
t issu
ed by its s
ubsid
iar
y com
panie
s from o
ne of whi
ch it re
ceive
s fees
. In ag
gregate
, the co
mpany
ha
s outst
andin
g guar
antees ove
r £22.4 bi
llion of d
ebt ins
trume
nts (2020 – £2
4.9 bi
llion). The a
mounts d
ue from t
he subs
idia
ry
co
mpany in r
elatio
n to these g
uara
ntee fee
s will b
e recove
red over th
e life of th
e bonds a
nd are di
sclo
sed wi
thin ‘T
rad
e and othe
r
rec
eiva
bles’ (see N
ote F).
H)
Pr
ovisions for liabilities
2021
£m
2020
£m
At 1 January
7
4
Charge for the year
24
15
Utilised
(1
9)
(12)
At 31 December
12
7
Th
e provis
ions re
late to a numb
er of leg
al and ot
her dis
putes in w
hich th
e comp
any is cur
rentl
y involved
.
I)
Other non-curr
ent liabilities
2021
£m
2020
£m
Contingent consideration payable
458
4
57
Th
e contin
gent c
onsid
erati
on relate
s to the amo
unt payab
le for the a
cquis
ition i
n 20
1
5 of t
he Novar
tis Vacc
ines p
ort
foli
o. The
cur
rent ye
ar liab
ilit
y is incl
uded w
ithin ‘
T
ra
de and ot
her payab
les’
. For fu
rth
er det
ails
, see Note 32 to th
e Group ﬁ
nanc
ial st
atement
s,
‘Contingent considerat
ion liabil
ities’
.
Notes to t
he company balance she
et – UK GA
AP
(including FRS 1
0
1 ‘
Reduced Disc
losure Framework’) continued
25
6
GS
K Ann
ual R
epor
t 2021
J)
Shar
e capit
al and shar
e pr
emium account
Ordinary Shares of 25p each
Share
premium
account
Number
£m
£m
Share capital issued and fully paid
At 1 January 2020
5,3
83,1
02,231
1,34
6
3,1
7
4
Issued under employee share schemes
2,0
8
7
,386
–
29
Ordinary shares acquired by ES
OP trusts
–
–
78
At 31 December 2020
5,3
85,189,61
7
1,3
46
3,281
Issued under employee share schemes
1,825,442
1
20
At 31 December 2021
5,387
,0
15,05
9
1,3
4
7
3,30
1
31 December
2021
000
31 December
2020
000
Number of shares issuable under employee share schemes
75,21
0
48,205
Number of unissued shares not under option
4,537
,
7
7
5
4,56
6,605
At 3
1 De
cemb
er 202
1
, of the is
sued sh
are c
apit
al, 23,
205,
289 (
2020 – 48
,97
5,3
04
) shar
es wer
e held in th
e ESOP T
rus
ts,
35
5,205
,950 (2020 – 355
,205,
950) shar
es were h
eld as T
re
asur
y sha
res a
nd 5,00
8,6
03,
820 (
2020 – 4,981
,00
8,3
63
) sha
res
were i
n free i
ssue
. All is
sued s
hare
s are ful
ly pai
d. The n
omina
l, car
ry
ing and m
arket va
lues of t
he shar
es hel
d in the ES
OP T
rusts
are d
iscl
osed in N
ote 44, ‘
Empl
oyee sha
re sch
emes’
. On 1
0 Feb
ruar
y 2022, 50
.3 mill
ion tre
asu
ry sh
are
s were tra
nsfer
red to the
ESO
P T
r
usts af
ter wh
ich the T
rus
ts held 72.
9 millio
n shar
es aga
inst th
e exerci
se of sha
re opti
ons and s
hare rew
ards
.
K)
Retained earnings and other reserves
Th
e proﬁt o
f Gla
xoS
mith
Kline p
lc for the ye
ar wa
s £4,
94
2 mill
ion (2020 – £3
,893 m
illio
n proﬁ
t
). Af
ter divi
dend
s paid of £
3,
999
mill
ion (2020 – £3
,97
7 milli
on
), and the e
ffe
ct of £n
il T
r
easu
ry s
hare
s trans
ferr
ed to a subs
idia
ry c
ompa
ny (
2020 – £531 milli
on
)
ret
aine
d earn
ings at 31 Dece
mber 2021 stood a
t £50,
596 mill
ion (2020 – £49,6
53 mill
ion)
, of wh
ich £
38,
896 mi
llion wa
s
unr
ealis
ed (2020 – £3
8,8
96 milli
on
). Di
viden
ds to shar
ehold
ers a
re pai
d out of the r
eali
sed pro
ﬁts of th
e comp
any
, whi
ch at
3
1 De
cemb
er 202
1 amou
nted to £
1
1,
7
00 mi
llion (2020 – £1
0,75
7 millio
n
).
Ot
her re
ser
ves in
clude
s a capi
tal r
edemp
tion re
ser
ve and a r
eser
ve re
ﬂect
ing his
toric
al cont
ribut
ions of s
hare
s in the co
mpany
whi
ch were i
ssue
d to satis
fy s
hare op
tion awar
ds gra
nted to empl
oyees of s
ubsi
diar
y com
pani
es.
L)
Gr
oup companies
Se
e pages 29
9 to 3
1
0 fo
r a comp
lete list o
f subsi
diar
ies
, ass
ociate
s, joi
nt ventur
es and oth
er sig
niﬁc
ant sh
areho
lding
s, whi
ch for
ms
part of these ﬁnancial
stat
ements.
Notes to the company balance sheet – UK GA
AP
(incl
uding FRS 1
0
1 ‘
R
educed Disclosure Framew
ork’) contin
ued
GS
K Ann
ual R
epor
t 2021
257
Strategic report
Governance and remuneration
Financial statements
Investor information
I
nve
s
t
o
r
in
f
orm
at
io
n
GS
K Ann
ual R
epor
t 2021
257
In th
is sect
ion
Quar
terly
trend
258
Pharmaceutic
als
turnov
er
260
V
accines turnover
262
Fi
ve year re
cord
263
Product development
pipeline
269
Products, competition and
int
ellectual property
27
2
Principal risks and uncer
tainties
27
5
Sha
re ca
pita
l and co
ntrol
28
8
Dividends 290
Fi
nanci
al cal
enda
r 202
2
29
1
An
nual Ge
nera
l Mee
ting 2022
291
T
a
x in
formation
for sharehold
ers
292
Shareholder service
s
and contacts
294
US law
and regula
tion
296
Group companies
299
Gl
oss
ar
y of terms
3
1
1
Strategic report
Governance and remuneration
Financial statements
Investor information
25
8
GS
K Ann
ual R
epor
t 2021
Qu
arterly t
rend
An u
naudite
d anal
ysis of th
e Grou
p resul
ts is prov
ided by q
uar
ter in Ster
ling for t
he ﬁna
ncial ye
ar 202
1
.
Income statement – T
otal
12 months 2021
Q4 2021
Q3 2021
Q2 2021
Q1 2021
£m
Reported
£m
Reported
£m
Reported
£m
Reported
£m
Reported
£%
C
ER%
£%
CE
R%
£%
C
ER%
£%
CE
R%
£%
CE
R%
T
urnover
Pharmaceuticals
17
,729
4
10
5,221
20
25
4,3
9
7
5
10
4,229
3
12
3,882
(12)
(8)
V
accines
6
,
778
(3)
2
1,809
(1
0)
(7)
2,1
7
4
7
13
1,571
39
49
1,224
(32)
(3
0)
Consumer Healthcare
9,607
(4)
–
2,4
9
7
6
10
2,506
3
8
2,292
(4)
3
2,312
(19)
(16)
T
otal turnover
34,1
14
–
5
9,527
9
13
9
,077
5
10
8,0
92
6
15
7
,41
8
(1
8)
(1
5)
Cost of sales
(11,6
03)
(1)
2
(3,6
80)
16
19
(2,88
9)
-
3
(2,554)
4
9
(2,4
80)
(22)
(21)
Selling, general and administration
(1
0,975)
(4)
–
(3,260)
3
6
(2,64
6)
(1)
4
(2,642)
(2)
3
(2,427)
(17)
(15)
Research and development
(5,2
7
8)
4
7
(1,4
48)
(2)
1
(1,49
0)
31
34
(1,222)
(6)
–
(1,118)
(6)
(3)
Royalty income
419
32
32
135
48
46
116
36
40
77
3
–
91
36
39
Other operating income/(expense)
(
476
)
(
379
)
(230)
(7
6)
20
9
Operating proﬁt
6,201
(20)
(9)
895
(1
6)
1
1,938
4
15
1,67
5
(41)
(3
0)
1,6
93
(1
6)
(8)
Net ﬁnance costs
(756)
(18
7)
(193)
(185)
(191)
Loss on disposal of interest in associates
(36)
–
–
(3
6)
_
Share of after-tax proﬁts/(losses) of associates and joint ventures
33
(2)
3
16
16
Proﬁt before tax
ation
5,442
(22)
(1
0)
70
6
(14)
8
1
,74
8
5
16
1
,470
(44)
(32)
1,518
(1
7)
(9)
T
axation
(3
46)
224
(3
80)
68
(258)
T
ax rate %
6.4%
(31.
7)%
21.
7%
(4.6)%
1
7
.0%
Proﬁt after taxation for the period
5,09
6
(20)
(9)
930
11
30
1,368
(4)
6
1,538
(37)
(26)
1,26
0
(25)
(1
7)
Proﬁt attributable to non-controlling interests
711
181
200
143
1
87
Proﬁt attributable to shareholders
4,385
74
9
1,168
1,3
95
1
,
073
Basic earnings per share (pence)
87
.6p
(24)
(1
3)
15.0p
10
31
23.3p
(7)
3
27
.9p
(39)
(28)
21.5p
(32)
(25)
Diluted earnings per share (pence)
86.6p
1
4.
7p
23.1p
27
.6p
21.3p
Income statement – Adjusted
T
otal turnover
34,114
–
5
9,527
9
13
9,
077
5
10
8,092
6
15
7
,418
(18)
(15)
Cost of sales
(1
0,
726)
5
8
(3,49
6)
25
28
(2,64
6)
4
7
(2,3
48)
4
9
(2,236)
(14)
(13)
Selling, general and administration
(1
0,225)
(5)
(1)
(2,9
08)
(1)
2
(2,50
4)
1
7
(2,4
98)
(1)
5
(2,315)
(17)
(15)
Research and development
(4,
77
6)
4
8
(1,3
65)
5
7
(1,16
9)
11
15
(1,165)
(1)
6
(1,07
7)
(1)
3
Royalty income
419
32
32
135
48
46
116
36
40
77
3
–
91
36
39
Operating proﬁt
8,806
(1)
9
1,8
93
4
15
2,87
4
8
16
2,1
58
23
43
1,8
81
(30)
(23)
Net ﬁnance costs
(753)
(18
6)
(192)
(185)
(190)
Share of after-tax proﬁts/(losses) of associates and joint ventures
33
(2)
3
16
16
Proﬁt befor
e taxation
8,0
86
–
11
1
,70
5
8
20
2,685
8
16
1,9
89
29
50
1
,707
(32)
(25)
T
axation
(1,415)
(
177)
(55
4)
(36
6)
(318)
T
ax rate %
1
7
.5%
1
0.4%
20.6%
18.4%
18.6%
Proﬁt after taxation for the period
6,6
71
(2)
9
1,528
13
25
2,1
31
3
11
1,623
32
54
1,389
(3
6)
(29)
Proﬁt attributable to non-controlling interests
1,00
6
24
8
296
216
246
Proﬁt attributable to shareholders
5,665
1,280
1,835
1,407
1,143
Adjusted earnings per share (pence)
1
1
3.2p
(2)
9
25.6p
9
22
3
6.6p
3
10
28.1p
46
71
22.9p
(39)
(33)
T
he calculation of Adjusted results is described on page 56.
Financial r
ecor
d
GS
K Ann
ual R
epor
t 2021
259
Strategic report
Governance and remuneration
Financial statements
Investor information
Qu
arterly t
rend
An u
naudite
d anal
ysis of th
e Grou
p resul
ts is prov
ided by q
uar
ter in Ster
ling for t
he ﬁna
ncial ye
ar 202
1
.
Income statement – T
otal
12 months 2021
Q4 2021
Q3 2021
Q2 2021
Q1 2021
£m
Reported
£m
Reported
£m
Reported
£m
Reported
£m
Reported
£%
C
ER%
£%
CE
R%
£%
C
ER%
£%
CE
R%
£%
CE
R%
T
urnover
Pharmaceuticals
17
,729
4
10
5,221
20
25
4,3
9
7
5
10
4,229
3
12
3,882
(12)
(8)
V
accines
6
,
778
(3)
2
1,809
(1
0)
(7)
2,17
4
7
13
1,5
71
39
49
1,224
(32)
(3
0)
Consumer Healthcare
9,607
(4)
–
2,4
9
7
6
10
2,506
3
8
2,292
(4)
3
2,312
(19)
(16)
T
otal turnover
34,1
14
–
5
9,527
9
13
9
,077
5
10
8,0
92
6
15
7
,41
8
(1
8)
(1
5)
Cost of sales
(11,6
03)
(1)
2
(3,6
80)
16
19
(2,88
9)
-
3
(2,554)
4
9
(2,4
80)
(22)
(21)
Selling, general and administration
(1
0,975)
(4)
–
(3,260)
3
6
(2,64
6)
(1)
4
(2,642)
(2)
3
(2,427)
(17)
(15)
Research and development
(5,2
7
8)
4
7
(1,4
48)
(2)
1
(1,49
0)
31
34
(1,222)
(6)
–
(1,118)
(6)
(3)
Royalty income
419
32
32
135
48
46
116
36
40
77
3
–
91
36
39
Other operating income/(expense)
(
476
)
(
379
)
(230)
(7
6)
20
9
Operating proﬁt
6,201
(20)
(9)
895
(1
6)
1
1,938
4
15
1,67
5
(41)
(3
0)
1,6
93
(1
6)
(8)
Net ﬁnance costs
(756)
(18
7)
(193)
(185)
(191)
Loss on disposal of interest in associates
(36)
–
–
(3
6)
_
Share of after-tax proﬁts/(losses) of associates and joint ventures
33
(2)
3
16
16
Proﬁt before tax
ation
5,442
(22)
(1
0)
70
6
(14)
8
1
,74
8
5
16
1
,470
(44)
(32)
1,518
(1
7)
(9)
T
axation
(3
46)
224
(3
80)
68
(258)
T
ax rate %
6.4%
(31.
7)%
21.
7%
(4.6)%
1
7
.0%
Proﬁt after taxation for the period
5,09
6
(20)
(9)
930
11
30
1,368
(4)
6
1,538
(37)
(26)
1,26
0
(25)
(1
7)
Proﬁt attributable to non-controlling interests
711
181
200
143
187
Proﬁt attributable to shareholders
4,385
74
9
1,168
1,3
95
1
,
073
Basic earnings per share (pence)
87
.6p
(24)
(1
3)
15.0p
10
31
23.3p
(7)
3
27
.9p
(39)
(28)
21.5p
(32)
(25)
Diluted earnings per share (pence)
86.6p
1
4.
7p
23.1p
27
.6p
21.3p
Income statement – Adjusted
T
otal turnover
34,114
–
5
9,527
9
13
9,
077
5
10
8,092
6
15
7
,418
(18)
(15)
Cost of sales
(1
0,
726)
5
8
(3,49
6)
25
28
(2,64
6)
4
7
(2,3
48)
4
9
(2,236)
(14)
(13)
Selling, general and administration
(1
0,225)
(5)
(1)
(2,9
08)
(1)
2
(2,50
4)
1
7
(2,4
98)
(1)
5
(2,315)
(17)
(15)
Research and development
(4,
77
6)
4
8
(1,3
65)
5
7
(1,16
9)
11
15
(1,165)
(1)
6
(1,07
7)
(1)
3
Royalty income
419
32
32
135
48
46
116
36
40
77
3
–
91
36
39
Operating proﬁt
8,806
(1)
9
1,8
93
4
15
2,87
4
8
16
2,1
58
23
43
1,8
81
(30)
(23)
Net ﬁnance costs
(753)
(18
6)
(192)
(185)
(190)
Share of after-tax proﬁts/(losses) of associates and joint ventures
33
(2)
3
16
16
Proﬁt befor
e taxation
8,0
86
–
11
1
,70
5
8
20
2,685
8
16
1,9
89
29
50
1
,707
(32)
(25)
T
axation
(1,415)
(
177)
(55
4)
(36
6)
(318)
T
ax rate %
1
7
.5%
1
0.4%
20.6%
18.4%
18.6%
Proﬁt after taxation for the period
6,6
71
(2)
9
1,528
13
25
2,1
31
3
11
1,623
32
54
1,389
(3
6)
(29)
Proﬁt attributable to non-controlling interests
1,00
6
24
8
296
216
246
Proﬁt attributable to shareholders
5,665
1,280
1,835
1,407
1,143
Adjusted earnings per share (pence)
1
1
3.2p
(2)
9
25.6p
9
22
3
6.6p
3
10
28.1p
46
71
22.9p
(39)
(33)
T
he calculation of Adjusted results is described on page 56.
Quarterly trend
continued
Financial recor
d
continued
26
0
GS
K Ann
ual R
epor
t 2021
Therapeutic ar
ea/major products
T
otal
US
Europe
International
2021
2020
Growth
2021
Growth
2021
Growth
2021
Growth
£m
£m
£%
C
ER%
£m
£%
CE
R%
£m
£%
C
ER%
£m
£%
CE
R%
Respiratory
2,863
2,36
0
21
28
1,822
23
30
606
11
13
435
33
42
Anoro Ellipta
504
5
47
(8)
(3)
2
78
(15)
(9)
14
9
5
8
77
(1)
3
T
relegy Ellipta
1,21
7
819
49
57
854
52
62
200
19
21
163
81
92
Nucala
1,142
994
15
22
690
15
23
257
8
11
195
23
34
H
IV
4
,777
4
,876
(2)
3
2,898
(4)
3
1,1
94
(2)
1
685
4
11
Dolutegravir products
4,5
6
7
4,
7
02
(3)
2
2
,7
74
(6)
–
1,151
(1)
1
642
7
14
Tivicay
1,3
81
1,527
(1
0)
(4)
76
3
(12)
(7)
28
6
(22)
(20)
332
15
24
T
riumeq
1,882
2,30
6
(18)
(14)
1,190
(18)
(13)
452
(20)
(18)
240
(15)
(12)
Juluca
517
4
95
4
10
393
2
8
111
14
18
13
18
27
Dovato
787
3
74
>1
00
>1
00
428
87
99
302
>1
00
>1
00
57
>1
00
>1
00
Rukobia
45
11
>1
00
>1
00
43
>1
00
>1
00
2
>1
00
>1
00
–
–
–
Cabenuva
38
–
>1
00
>1
00
32
–
–
5
–
–
1
>1
00
(>1
00)
Other
127
163
(22)
(18)
49
(8)
(4)
36
(28)
(26)
42
(3
0)
(23)
Immuno-inﬂammation
885
727
22
29
727
19
26
68
21
25
90
53
63
Benlysta
874
719
22
29
72
7
19
26
68
21
25
79
55
67
Oncology
489
37
2
31
37
2
74
19
26
19
5
43
46
20
>1
00
>100
Zejula
395
339
17
22
212
3
10
163
27
30
20
>1
00
>1
00
Blenrep
89
33
>1
00
>1
00
61
>1
00
>1
00
28
>1
00
>1
00
–
–
–
Jemperli
5
–
>1
00
>1
00
2
–
–
3
>1
00
>1
00
–
–
–
Pandemic
958
–
–
–
6
02
–
–
69
–
–
287
–
–
Xevudy
958
–
–
–
602
–
–
69
–
–
2
87
–
–
New and Specialty
Pharmaceuticals
9,9
72
8,335
20
26
6,323
19
26
2,1
32
9
12
1,51
7
45
54
Established pharmaceutic
als
7
,757
8,7
21
(1
1)
(6)
2,1
1
9
–
6
1,802
(1
6)
(1
4)
3,836
(1
4)
(8)
Established Respiratory
4,327
4,64
0
(7)
(2)
1
,7
8
8
7
13
9
95
(12)
(1
0)
1,54
4
(16)
(1
0)
Arnuity Ellipta
47
45
4
11
40
8
16
–
–
–
7
(12)
(13)
Avamys/V
eramyst
298
2
97
–
7
–
–
–
65
(2)
2
233
1
8
Flixotide/
Flo
vent
444
419
6
12
27
5
50
60
69
(14)
(11)
10
0
(36)
(32)
Incruse Ellipta
205
220
(7)
(3)
10
9
(7)
(2)
70
(5)
(3)
26
(1
0)
(7)
Relvar/
Breo Ellipta
1,121
1,124
–
5
488
3
9
334
4
6
29
9
(9)
(2)
Seretide/Advair
1,35
7
1,535
(12)
(7)
486
12
19
322
(28)
(27)
549
(16)
(11)
V
entolin
718
78
5
(9)
(4)
390
(9)
(3)
10
8
(7)
(5)
220
(8)
(3)
Other Respiratory
1
37
215
(36)
(31)
–
–
–
27
–
–
1
10
(41)
(3
6)
Dermatology
399
425
(6)
(1)
(1)
>(1
00)
>(1
00)
131
(6)
(4)
26
9
(5)
2
Augmentin
426
490
(13)
(7)
–
–
–
124
(14)
(12)
3
02
(12)
(4)
Avodart
332
466
(29)
(25)
1
(80)
(80)
118
(25)
(23)
213
(3
0)
(25)
Imigran/
Imitrex
10
5
118
(11)
(8)
29
(31)
(31)
51
–
2
25
–
8
Lamictal
478
5
37
(11)
(6)
232
(14)
(9)
112
(7)
(5)
13
4
(9)
(3)
Seroxat/
Paxil
128
14
6
(12)
(6)
–
–
–
35
(5)
(5)
93
(15)
(6)
V
altrex
92
10
3
(11)
(5)
11
(27)
(20)
33
3
3
48
(14)
(5)
Other
1,
470
1
,7
9
6
(18)
(13)
59
(46)
(4
0)
203
(3
9)
(37)
1,20
8
(11)
(5)
Pharmaceuticals
1
7,
7
2
9
1
7
,
056
4
10
8,4
42
13
21
3,934
(4)
(2)
5,3
53
(3)
4
Pharmaceutical turnov
er b
y therapeutic area 202
1
Financial recor
d
continued
GS
K Ann
ual R
epor
t 2021
261
Strategic report
Governance and remuneration
Financial statements
Investor information
Therapeutic ar
ea/major products
T
otal
US
Europe
International
2020
20
19
Growth
2020
Growth
2020
Growth
2020
Growth
£m
£m
£%
CE
R%
£m
£%
C
ER%
£m
£%
CE
R%
£m
£%
C
ER%
Respiratory
2,36
0
1,800
31
32
1,4
86
28
30
548
28
27
326
53
56
Anoro Ellipta
5
47
514
6
8
3
27
1
2
142
18
17
78
11
17
T
relegy Ellipta
819
518
58
59
5
61
47
48
16
8
65
65
90
>1
00
>1
00
Nucala
994
76
8
29
30
598
32
33
23
8
16
15
15
8
45
46
H
IV
4,
876
4,8
54
–
1
3,00
5
–
1
1,21
3
5
4
658
(5)
(1)
Dolutegravir products
4,
7
02
4,633
1
2
2,941
–
1
1,163
7
6
598
(2)
3
Tivicay
1,527
1,6
62
(8)
(7)
871
(11)
(1
0)
368
(7)
(8)
28
8
(1)
5
T
riumeq
2,306
2,5
49
(1
0)
(9)
1,45
4
(1
0)
(9)
568
(9)
(1
0)
28
4
(9)
(6)
Juluca
495
366
35
36
3
87
28
29
97
73
71
11
57
71
Dovato
3
74
56
>1
00
>1
00
229
>1
00
>1
00
130
>1
00
>1
00
15
>1
00
>1
00
Rukobia
11
–
–
–
11
–
>1
00
–
–
–
–
–
–
Cabenuva
–
–
–
–
–
–
–
–
–
–
–
–
–
Other
163
221
(26)
(25)
53
(20)
(18)
50
(29)
(27)
60
(29)
(28)
Immuno-inﬂammation
727
6
13
19
20
6
12
14
16
56
22
20
59
84
91
Benlysta
719
613
17
19
612
14
16
56
22
20
51
59
66
Oncology
372
230
62
62
231
72
74
13
6
42
40
5
–
–
Zejula
339
229
48
48
206
54
55
128
35
33
5
–
–
Blenrep
33
–
–
–
25
–
–
8
–
–
–
–
–
New and Specialty
Pharmaceuticals
8,335
7,
4
9
7
11
12
5,334
10
12
1,953
13
12
1,04
8
12
16
Established pharmaceutic
als
8,721
1
0,057
(1
3)
(1
2)
2,1
1
7
(18)
(1
7)
2,1
51
(1
0)
(1
1)
4,4
53
(1
2)
(9)
Established Respiratory
4,6
40
5,181
(1
0)
(9)
1
,
676
(1
6)
(1
5)
1,13
4
(2)
(3)
1,83
0
(9)
(6)
Arnuity Ellipta
45
48
(6)
(6)
37
(1
0)
(7)
–
–
–
8
14
–
Avamys/V
eramyst
2
97
324
(8)
(6)
–
–
–
66
(4)
(4)
231
(1
0)
(7)
Flixotide/
Flo
vent
419
629
(33)
(32)
183
(5
0)
(50)
80
(9)
(1
0)
15
6
(1
0)
(5)
Incruse Ellipta
220
262
(16)
(15)
117
(27)
(27)
74
1
1
29
4
7
Relvar/
Breo Ellipta
1,124
97
1
16
17
4
74
24
25
322
14
13
328
6
9
Seretide/Advair
1,535
1
,7
3
0
(11)
(1
0)
43
4
(14)
(13)
449
(11)
(11)
652
(1
0)
(7)
V
entolin
78
5
93
8
(16)
(14)
43
0
(21)
(20)
116
(3)
(4)
23
9
(12)
(7)
Other Respiratory
215
279
(23)
(23)
1
>1
00
>1
00
27
(4)
–
1
87
(25)
(26)
Dermatology
425
445
(4)
(1)
1
(6
7)
(6
7)
14
0
(12)
(13)
28
4
–
6
Augmentin
490
602
(19)
(15)
–
–
–
145
(16)
(16)
345
(20)
(15)
Avodart
466
5
74
(19)
(17)
5
25
25
158
(24)
(25)
303
(16)
(13)
Imigran/
Imitrex
118
138
(14)
(14)
42
(29)
(29)
51
(2)
(4)
25
(7)
(4)
Lamictal
5
37
566
(5)
(4)
269
(5)
(5)
120
7
6
148
(13)
(9)
Seroxat/
Paxil
146
160
(9)
(6)
–
–
–
37
–
(3)
10
9
(11)
(7)
V
altrex
10
3
10
7
(4)
(2)
15
7
7
32
3
–
56
(1
0)
(5)
Other
1
,7
9
6
2,284
(21)
(20)
10
9
(48)
(4
7)
33
4
(28)
(28)
1,353
(16)
(14)
Pharmaceuticals
1
7
,056
1
7
,554
(3)
(1)
7
,4
51
1
2
4,1
04
(1)
(1)
5,5
01
(9)
(5)
Pharmaceutical turnov
er b
y therapeutic area 2020
Financial recor
d
continued
262
GS
K Ann
ual R
epor
t 2021
V
accines tur
no
v
er 202
1
Major products
T
otal
US
Europe
International
2021
2020
Growth
2021
Growth
2021
Growth
2021
Growth
£m
£m
£%
CE
R%
£m
£%
C
ER%
£m
£%
CE
R%
£m
£%
C
ER%
Meningitis
9
61
1,029
(7)
(2)
4
53
5
11
354
(1)
2
15
4
(36)
(30)
Bexsero
650
65
0
–
5
253
(3)
3
328
1
4
69
5
20
Menveo
2
72
265
3
9
200
16
23
21
(19)
(15)
51
(23)
(18)
Other
39
114
(66)
(65)
–
–
–
5
(1
7)
(17)
34
(6
9)
(68)
Inﬂuenza
679
73
3
(7)
(2)
456
(1
5)
(9)
10
1
3
6
12
2
22
28
Fluarix, FluLaval
679
73
3
(7)
(2)
45
6
(15)
(9)
10
1
3
6
122
22
28
Shingles
1,7
21
1,9
89
(1
3)
(9)
1,34
4
(20)
(1
5)
281
51
54
96
(25)
(23)
Shingrix
1,
721
1,989
(13)
(9)
1,3
44
(20)
(15)
281
51
54
96
(25)
(23)
Established vaccines
2,970
3,231
(8)
(4)
977
(7)
(1)
700
(1
3)
(1
0)
1,293
(6)
(3)
Infanrix, Pediarix
5
43
629
(14)
(9)
3
03
(3)
4
116
(33)
(32)
124
(14)
(1
0)
Boostrix
521
476
9
14
2
70
5
12
140
–
2
111
41
44
Hepatitis
460
576
(20)
(16)
269
(19)
(14)
10
9
(22)
(21)
82
(20)
(1
7)
Rotarix
5
41
55
9
(3)
1
111
(1
0)
(4)
118
(1)
2
312
(2)
3
Synﬂorix
3
57
402
(11)
(8)
–
–
–
45
(15)
(13)
312
(11)
(7)
Priorix, Priorix T
etra, V
arilrix
260
261
–
4
–
–
–
125
(1)
2
135
–
5
Cer
varix
138
139
(1)
–
–
–
–
25
(17)
(1
7)
113
4
5
Other
15
0
18
9
(21)
(19)
24
(20)
(13)
22
16
26
10
4
(26)
(26)
V
accines excluding pandemic
6,331
6,982
(9)
(5)
3,23
0
(1
3)
(7)
1,43
6
–
2
1,66
5
(1
0)
(6)
Pandemic vaccines
4
47
–
–
–
242
–
–
–
–
–
205
–
–
Pandemic adjuvant
444
–
–
–
242
–
–
–
–
–
202
–
–
T
otal vaccines
6
,778
6,982
(3)
2
3,4
72
(6)
–
1,436
–
2
1,
870
1
5
£% represents gro
wth at actual
exchange
rat
es. CER
%
represents gro
wth at constant
exchange
rates.
V
accines tur
no
v
er 2020
Major products
T
otal
US
Europe
International
2020
20
19
Growth
2020
Growth
2020
Growth
2020
Growth
£m
£m
£%
CE
R%
£m
£%
C
ER%
£m
£%
CE
R%
£m
£%
C
ER%
Meningitis
1,029
1,018
1
3
433
1
2
356
4
3
24
0
(2)
4
Bexsero
650
679
(4)
(2)
260
–
1
324
2
1
66
(3
4)
(20)
Menveo
265
2
67
(1)
1
173
2
3
26
44
39
66
(16)
(13)
Other
114
72
58
57
–
–
–
6
–
–
10
8
64
62
Inﬂuenza
73
3
541
35
37
53
5
30
31
98
75
73
10
0
37
42
Fluarix, FluLaval
733
541
35
37
535
30
31
98
75
73
10
0
37
42
Shingles
1,98
9
1,81
0
10
11
1,6
75
–
1
18
6
>1
00
>1
00
12
8
47
49
Shingrix
1,98
9
1,81
0
10
11
1,675
–
1
186
>1
00
>1
00
128
47
49
Established vaccines
3,231
3
,78
8
(1
5)
(1
4)
1,0
54
(24)
(24)
801
(23)
(23)
1,376
1
3
Infanrix, Pediarix
629
73
3
(14)
(13)
311
(14)
(13)
1
74
(18)
(19)
14
4
(1
0)
(6)
Boostrix
476
584
(18)
(18)
257
(14)
(13)
14
0
(1
0)
(11)
79
(3
9)
(36)
Hepatitis
576
8
74
(3
4)
(33)
333
(37)
(36)
14
0
(3
9)
(39)
10
3
(1
0)
(6)
Rotarix
55
9
55
8
–
1
123
(12)
(11)
119
6
6
3
17
4
5
Synﬂorix
4
02
468
(14)
(14)
–
–
–
53
(2)
(2)
349
(16)
(15)
Priorix, Priorix T
etra, V
arilrix
261
232
13
14
–
–
–
126
26
25
135
2
5
Cer
varix
139
50
>1
00
>1
00
–
–
–
30
43
43
10
9
>1
00
>1
00
Other
18
9
28
9
(35)
(35)
30
(55)
(5
6)
19
(8
7)
(8
7)
14
0
87
85
T
otal vaccines
6,9
82
7,
1
5
7
(2)
(1)
3,6
9
7
(5)
(4)
1,441
(3)
(4)
1,84
4
5
7
£% represents gro
wth at actual
exchange
rat
es. CER
%
represents gro
wth at constant
exchange
rates.
Financial recor
d
continued
GS
K Ann
ual R
epor
t 2021
263
Strategic report
Governance and remuneration
Financial statements
Investor information
A record of
ﬁnancial performance is provided, analy
sed in accordance with
current reporting practice.
The informat
ion included
in
the F
ive year r
ecor
d is pre
pare
d in acc
orda
nce wi
th IFR
S as ad
opted by the E
urope
an Uni
on and al
so wit
h IFR
S as is
sued by th
e
International Accounting Standards Board.
Group turnover by geographic r
egion
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
US
1
5,093
14,556
13,89
0
11,982
11,263
Europe
7
,838
8,164
8,06
9
7
,
973
7
,943
International
1
1,1
83
11,3
7
9
11,
795
1
0,8
66
1
0,9
80
34,1
14
34,099
33,
754
30,821
30,18
6
Group turnover by segment
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
Pharmaceuticals
1
7,
7
2
9
17
,056
17
,554
1
7
,269
17
,
276
V
accines
6
,778
6,982
7
,157
5,89
4
5,16
0
Consumer Healthcare
9,607
1
0,033
8,995
7
,658
7,
7
5
0
Segment turnover
34,1
14
3
4,0
71
33,
706
30,821
30,18
6
Corporate and other unallocated turnover
–
28
48
–
–
34,1
14
34,099
33,
754
30,821
30,18
6
Pharmaceuticals turnover
2021
£m
2020
(revised)
£m
20
19
(revised)
£m
20
18
(revised)
£m
2
017
(revised)
£m
Respiratory
2,863
2,36
0
1,8
00
1,195
688
H
IV
4
,777
4
,
876
4,85
4
4,
722
4,350
Immuno-inﬂammation
885
72
7
613
472
377
Oncology
489
372
23
0
–
–
Pandemic
958
–
–
–
–
New and Specialty
9,9
7
2
8,335
7,
4
9
7
6,3
89
5,415
Established Pharmaceuticals
7
,757
8,
7
21
1
0,05
7
1
0,8
80
11,861
1
7,
7
2
9
1
7
,056
17
,554
1
7
,269
17
,
276
V
accines turnover
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
Meningitis
9
61
1,029
1,018
881
890
Inﬂuenza
67
9
73
3
541
523
488
Shingles
1,7
21
1,9
89
1,81
0
78
4
22
Established V
accines
2,9
70
3,231
3
,7
8
8
3
,7
0
6
3
,7
6
0
6,331
6,982
7
,157
5,89
4
5,16
0
Pandemic V
accines
4
47
–
–
–
–
6
,778
6,982
7
,15
7
5,89
4
5,160
Consumer Healthcare turnover
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
Oral health
2,73
2
2,
753
2,
673
2,4
96
2,46
6
Pain relief
2,
276
2,219
1,
781
1,4
40
1,465
Vitamins
,
minerals and supplements
1,51
2
1,50
6
611
10
3
10
5
Respiratory health
1,1
33
1,209
1,18
6
1,0
85
1,05
7
Dige
stive
health and other
1,803
1,824
1,6
46
1,435
1,447
Sub-total
9,45
6
9,511
7,
8
9
7
6,55
9
6,54
0
Brands divested/under review
15
1
522
1,0
98
1,0
99
1,21
0
9,607
1
0,033
8,9
95
7
,65
8
7,
7
5
0
Fiv
e year recor
d
Financial recor
d
continued
26
4
GS
K Ann
ual R
epor
t 2021
Financial results – T
otal
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
T
urnover
3
4,1
1
4
34,099
33,
754
30,821
30,18
6
Operating proﬁt
6,201
7,
7
8
3
6,961
5,483
4,0
8
7
Proﬁt before tax
ation
5,442
6,96
8
6,221
4,8
00
3,525
Proﬁt after tax
ation
5,09
6
6,38
8
5,26
8
4,04
6
2,169
pence
pence
pence
pence
pence
Basic earnings per share
8
7.
6
115.5
93.9
7
3
.7
31.4
Diluted earnings per share
86.6
114.1
92.6
7
2.9
31.0
2021
millions
2020
millions
20
19
millions
20
18
millions
2
017
millions
W
eighted average number of shares in issue:
Basic
5,003
4
,976
4,9
4
7
4,914
4,88
6
Diluted
5,0
65
5,038
5,0
16
4,971
4,9
41
Financial results – Adjusted
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
T
urnover
3
4,1
1
4
34,099
33,
754
30,821
30,18
6
Operating proﬁt
8,806
8,90
6
8,
972
8
,74
5
8,56
8
Proﬁt before tax
ation
8,0
86
8,095
8,236
8
,
078
7
,924
Proﬁt after tax
ation
6,671
6,8
00
6,918
6,5
43
6,25
7
pence
pence
pence
pence
pence
Adjusted earnings per share
1
1
3.2
115.9
123.9
119.4
111.8
%
%
%
%
%
Return on capital employed
25.8
35.6
5
6.5
13
4.0
83.4
Retu
rn on ca
pita
l employe
d is ca
lculate
d as tota
l proﬁ
t befor
e ta
xation a
s a per
cent
age of avera
ge net as
sets ove
r the yea
r
.
Five year recor
d
continued
Financial recor
d
continued
GS
K Ann
ual R
epor
t 2021
265
Strategic report
Governance and remuneration
Financial statements
Investor information
Balance sheet
2021
£m
2020
£m
20
19
£m
20
18
£m
2
017
£m
Non-current assets
6
0,429
6
0,184
60,201
41,139
40,4
7
4
Current assets
1
8,6
7
4
20,247
19,491
16,927
15,9
0
7
T
otal assets
79,1
03
8
0,431
79,692
58,066
56,3
81
Current liabilities
(23,6
7
0)
(22,14
8)
(24,05
0)
(22,4
91)
(26,569)
Non-current liabilities
(3
4,091)
(3
7
,475)
(37
,285)
(31,9
03)
(26,323)
T
otal liabilities
(57
,7
61)
(5
9,623)
(61,335)
(54,3
94)
(52,892)
Net assets
21,3
42
20,8
08
18,357
3
,672
3,48
9
Shareholders’
equity
1
5,0
55
14,587
11,405
3,
7
81
(68)
Non-controlling interests
6,287
6,221
6,952
(1
09)
3,55
7
T
otal equity
21,342
20,808
18,35
7
3
,672
3,48
9
Number of employees
2021
2020
2019
2018
2
017
US
14,289
15,
706
16,67
6
13,80
4
14,526
Europe
38,
809
40,
711
40,524
41,943
43,002
International
36,
998
3
7
,649
42,23
7
3
9
,74
3
4
0,934
90,
096
94,066
99,437
95,4
90
98,462
Manufacturing
32,141
33,8
48
36,925
3
6,527
3
8,245
Selling
34,
846
3
6,391
39,184
36,351
37
,
37
4
Administration
1
1,0
1
4
11,
7
30
11,249
10
,7
6
8
11,307
Research and development
1
2,0
95
12,097
12,0
7
9
11,844
11,536
90,
096
94,066
99,437
95,4
90
98,462
Th
e geogr
aphi
c distr
ibutio
n of emp
loyees in t
he tab
le above is b
ase
d on the lo
catio
n of GS
K’s subsi
diar
y co
mpani
es. T
he num
ber
of em
ployee
s is the num
ber of pe
rman
ent emp
loyed st
aff a
t the end of t
he ﬁnan
cial p
erio
d. It exc
ludes t
hose e
mployee
s who ar
e
emp
loyed an
d manag
ed by GS
K on a cont
ract b
asis
.
Exchange rates
As a gu
ide to hol
ders o
f ADS
, the foll
owing ta
bles s
et out
, for the pe
riod
s indic
ated, in
format
ion on th
e exchan
ge rate of US D
olla
rs
for Ste
rling a
s repo
rte
d by the Ban
k of Engla
nd (
4pm bu
ying rate).
Th
e a
vera
ge rate for t
he year i
s calc
ulated a
s the averag
e of the 4pm b
uying r
ates for e
ach day of t
he year.
2021
2020
2019
2018
2
017
Average
1.38
1.29
1.28
1.3
4
1.29
2022
Feb
2022
Jan
2021
Dec
2021
Nov
2021
Oct
2021
Sep
High
1.36
1.37
1.35
1.37
1.38
1.3
9
Low
1.33
1.34
1.32
1.32
1.35
1.3
4
Th
e 4pm buyi
ng rate on 25 F
ebru
ar
y was £1
= US
$1
.
34.
Five year recor
d
continued
Financial recor
d
continued
26
6
GS
K Ann
ual R
epor
t 2021
Adjusted results r
econciliation
31 December 2021
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
Separation
costs
£m
Adjusted
results
£m
T
urnover
34,114
3
4,114
Cost of sales
(11,6
03)
7
01
(33)
15
4
28
27
(1
0,
726)
Gross proﬁt
22,511
7
01
(33)
15
4
28
27
23,38
8
Selling, general and administration
(1
0,975)
426
25
17
282
(1
0,225)
Research and development
(5,2
7
8)
10
1
355
46
(4,
77
6)
Royalty income
419
419
Other operating (expense)/income
(
476)
1,1
0
6
(662)
32
–
Operating proﬁt
6,201
802
322
626
1,15
9
(618)
314
8,80
6
Net ﬁnance costs
(75
6)
2
1
(753)
Loss on disposal of interest in associates
(3
6)
36
–
Share of after-tax proﬁts of associates and joint ventures
33
33
Proﬁt before tax
ation
5,442
802
322
628
1,15
9
(581)
314
8,08
6
T
axation
(34
6)
(15
9)
(81)
(114)
(196)
(
470)
(4
9)
(1,415)
T
ax rate
6.4%
17
.5%
Proﬁt after tax
ation
5,0
96
6
43
241
514
963
(1,051)
265
6,6
71
Proﬁt attributable to non-controlling interests
711
295
1,00
6
Proﬁt attributable to shareholders
4,385
643
241
514
668
(1,051)
265
5,665
Earnings per share
8
7
.6p
12.9p
4.8p
1
0.3p
13.3p
(21.0)p
5.3p
113.2p
W
eighted average number of shares (millions)
5,003
5,003
Adjusted results r
econciliation
31 December 2020
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
Separation
costs
£m
Adjusted
results
£m
T
urnover
34,099
34,
099
Cost of sales
(11,
704)
699
31
6
67
116
(1
0,191)
Gross proﬁt
22,395
699
31
6
67
116
23,9
08
Selling, general and administration
(11,456)
1
18
65
9
(23)
16
68
(1
0,
71
7)
Research and development
(5,0
98)
75
214
206
(4,603)
Royalty income
318
318
Other operating (expense)/income
1,624
1,215
(2,83
9)
–
Operating proﬁt
7,
7
8
3
77
5
263
1,532
1,3
08
(2,823)
68
8,9
06
Net ﬁnance costs
(84
8)
2
2
(84
4)
Share of after-tax proﬁts of associates and joint ventures
33
33
Proﬁt before tax
ation
6,9
68
775
263
1,53
4
1,3
08
(2,821)
68
8,095
T
axation
(58
0)
(15
0)
(4
7)
(292)
(229)
17
(14)
(1,295)
T
ax rate
8.3%
16.0%
Proﬁt after tax
ation
6,3
88
625
216
1,242
1
,
079
(2,804)
54
6,8
00
Proﬁt attributable to non-controlling interests
639
392
1,031
Proﬁt attributable to shareholders
5
,74
9
625
216
1,242
6
87
(2,80
4)
54
5
,7
6
9
Earnings per share
115.5p
12.6p
4.4p
25.0p
13.8p
(56.5)p
1.1p
115.9p
W
eighted average number of shares (millions)
4
,
976
4
,976
Five year recor
d
continued
Financial recor
d
continued
GS
K Ann
ual R
epor
t 2021
267
Strategic report
Governance and remuneration
Financial statements
Investor information
Adjusted results r
econciliation
31 December 201
9
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
Adjusted
results
£m
T
urnover
33,
75
4
33,
75
4
Cost of sales
(11,863)
713
30
65
8
3
83
(1
0,07
9)
Gross proﬁt
21,8
91
713
30
658
3
83
23,6
75
Selling, general and administration
(11,402)
4
332
10
4
247
(1
0,
715)
Research and development
(4,5
68)
64
49
114
2
(4,339)
Royalty income
351
351
Other operating (expense)/income
689
1
(142)
(548)
–
Operating proﬁt
6,961
777
83
1,1
05
3
45
(299)
8
,972
Net ﬁnance costs
(814)
5
(1)
(81
0)
Share of after-tax proﬁts of associates and joint ventures
74
74
Proﬁt before tax
ation
6,221
777
83
1,11
0
345
(300)
8,236
T
axation
(953)
(156)
(17)
(208)
(124)
140
(1,318)
T
ax rate
15.3%
16.0%
Proﬁt after tax
ation
5,268
621
66
9
02
221
(16
0)
6,918
Proﬁt attributable to non-controlling interests
623
164
787
Proﬁt attributable to shareholders
4,645
621
66
9
02
57
(160)
6,131
Earnings per share
93.9p
12.6p
1.3p
18.2p
1.2p
(3.3)p
123.9p
W
eighted average number of shares (millions)
4,9
4
7
4,9
4
7
Adjusted results r
econciliation
31 December 201
8
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
Adjusted
results
£m
T
urnover
3
0,821
3
0,821
Cost of sales
(1
0,241)
536
69
443
15
(9,1
7
8)
Gross proﬁt
20,58
0
536
69
443
15
21,643
Selling, general and administration
(9,915)
2
315
98
38
(9,462)
Research and development
(3,893)
44
45
49
20
(3,
735)
Royalty income
299
29
9
Other operating (expense)/income
(1,588)
2
1,864
(27
8)
–
Operating proﬁt
5,483
580
116
809
1
,977
(220)
8
,74
5
Net ﬁnance costs
(71
7)
4
(3)
18
(698)
Proﬁt on disposal of associates
3
(3)
–
Share of after-tax proﬁts of associates and joint ventures
31
31
Proﬁt before tax
ation
4,8
00
580
116
813
1,97
4
(205)
8
,
078
T
axation
(75
4)
(1
09)
(19)
(
170
)
(239)
(24
4)
(1,535)
T
ax rate
15.7%
19.0%
Proﬁt after tax
ation
4,046
47
1
97
6
43
1,
735
(4
49)
6,543
Proﬁt attributable to non-controlling interests
423
251
6
74
Proﬁt attributable to shareholders
3,623
47
1
97
6
43
1,4
84
(44
9)
5,8
69
Earnings per share
7
3.
7p
9.6p
2.0p
13.1p
3
0.2p
(9.2)p
119.4p
W
eighted average number of shares (millions)
4,914
4,914
Five year recor
d
continued
Financial recor
d
continued
26
8
GS
K Ann
ual R
epor
t 2021
Adjusted result
s reconciliat
ion
31 De
cemb
er 201
7
T
otal
results
£m
Intangible
asset
amortisation
£m
Intangible
asset
impairment
£m
Major
restructuring
£m
T
rans
action-
related
£m
Divestments,
signiﬁcant
legal and
other items
£m
US t
ax
reform
£m
Adjusted
results
£m
T
urnover
30,18
6
3
0,186
Cost of sales
(1
0,342)
546
4
00
5
45
80
(8,
771)
Gross proﬁt
19,844
546
400
545
80
21,415
Selling, general and administration
(9,67
2)
24
8
83
(9,3
41)
Research and development
(4,47
6)
45
28
8
263
18
(3,862)
Royalty income
356
356
Other operating (expense)/income
(1,965)
1,519
(220)
666
–
Operating proﬁt
4,0
8
7
5
91
688
1,056
1,599
(119)
666
8,5
68
Net ﬁnance costs
(66
9)
4
8
(657)
Proﬁt on disposal of associates
94
(94)
–
Share of after-tax proﬁts of associates
and joint ventures
13
13
Proﬁt before tax
ation
3,525
591
688
1,060
1,599
(205)
666
7
,924
T
axation
(1,35
6)
(13
4)
(
176)
(209)
(619)
(251)
1
,
078
(1,667)
T
ax rate
3
8.5%
21.0%
Proﬁt after tax
ation
2,169
4
57
512
851
980
(456)
1
,74
4
6,25
7
Proﬁt attributable to non-controlling interests
6
37
42
114
79
3
Proﬁt attributable to shareholders
1,532
4
57
512
851
93
8
(456)
1,630
5,46
4
Earnings per share
31.4p
9.4p
1
0.5p
1
7
.4p
19.2p
(9.4)p
33.3p
111.8p
W
eighted average number of shares (millions)
4,8
86
4,8
86
Five year recor
d
continued
Financial recor
d
continued
GS
K Ann
ual R
epor
t 2021
269
Strategic report
Governance and remuneration
Financial statements
Investor information
MAA and N
D
A/B
LA regulatory review milestones shown in the table below are those that have been achieved. Future ﬁling dates are not included in this list.
Achieved r
egulatory
review milestones
Compound
Mechanism of Action/V
accine T
ype
Indication
Phase
MAA
ND
A
/BL
A
Oncology
Jemperli
(dostarlimab)
†
Anti-Programmed Cell Death protein 1 receptor
(PD-1) antibody
2L dM
MR
/
MSI-H endometrial cancer
2L dM
MR solid tumours
1L endometrial cancer
1L endometrial cancer combination with niraparib
Non-small cell lung cancer
1
Approved
Approved
III
III
II
A: Jun21
A: Apr21
A: Aug21
Zejula
(niraparib)
†
Poly (ADP-ribose) polymerase (P
ARP) 1/2 inhibitor
1L maintenance ovarian cancer combination
with dostarlimab
1L maintenance non small cell lung cancer
(NS
CL
C) combination with pembrolizumab
Pre-metast
atic, select biomarker population
Breast Cancer
III
III
III
B
lenrep
(
belantamab
mafodotin)
†
ADC t
argeting B-cell maturation antigen
3L multiple myeloma
2L+ multiple myeloma combination with Pomalyst
and dexamethasone
2L+ multiple myeloma combination with V
elcade
and dexamethasone
Multiple myeloma in combination with anti-cancer
treatments (platform study)
1L multiple myeloma combination with V
elcade,
Revlimid and dexamethasone
III
III
III
II
I
letetresgene-
autoleucel
(
337779
4
)
†
Engineered T
CR T
-cells targeting NY
-E
SO-1
2L+ synovial sarcoma and myxoid/round cell
liposarcoma
2L+ non-small cell lung cancer
I
I (pivotal)
II
cobolimab
(4069889
)
†
Anti-
T
-cell immunoglobulin and mucin domain-3
(TI
M-3) antibody
Non-small cell lung cancer combination with
Jemperli (dostarlimab) and docet
axel
II
40
7
4386
†
Anti-lymphocyte activation gene-3 (LAG-3)
antibody
Cancer
I
37
4
54
17
STI
NG cytosolic DNA pathway agonist
Cancer
I
609
7
608
CD9
6 antagonist
Cancer
I
390
1961
†
Engineered T
CR T
-cells, co-expressing the CD8a
cell surface receptor
, targeting NY
-ES
O-1
Cancer
I
384509
7
†
Engineered T
CR T
-cells, co-expressing the
dnT
G
F-βRI
I cell surface receptor
, targeting
NY
-ES
O-1
Cancer
I
436267
6
†
Methionine adenosyltransferase 2A (MA
T2A)
inhibitor
Cancer
I
4428
859
(EO
S-448)
†
TIG
IT antagonist
Cancer
I
Footnotes
1 non-registrational
2
transition activities underway to enable further progression by partner
3
G
SK has exclusive option to co-develop post Ph2
4 Ph3 trial in patients with progranulin gene mut
ation
5 G
SK is contributing pandemic adjuvant to COVI
D-19 vaccines collaborations
6 Submitted in Canada
7 Enrolment and vaccination stopped in February 2022. Further analysis to better understand s
afety data from these trials is ongoing
†
In-license or other alliance relationship with third party
^
ViiV Healthcare, a global specialist HIV company with
GS
K, Pﬁzer
, Inc. and Shionogi Limited as shareholders,
is responsible for developing and delivering H
IV medicines.
B
LA
Biological Licence Application
MAA
Marketing Authoris
ation Application (Europe)
N
D
A
New Drug Application (US)
A Approved
S Submitted
E
U
A
Emergency Use Authorisation
Phase I
Evaluation of clinical pharmacology, usually conducted
in volunteers
Phase I
I
Determination of dose and initial evaluation of efﬁcacy
,
conducted in a small number of patients
Phase I
II
Large comparative study (compound versus placebo
and/or established treatment) in patients to est
ablish
clinical beneﬁt and safety
Pipeline, pr
oducts and competition
Pharmaceuticals and V
accines product dev
elopment pi
peline
Key
270
GS
K Ann
ual R
epor
t 2021
Achieved r
egulatory
review milestones
Compound
Mechanism of Action/Vaccine T
ype
Indication
Phase
MAA
ND
A
/BL
A
H
IV^
Apretude
(cabotegravir)
H
IV integrase strand transfer inhibitor
(long-acting)
H
IV pre-exposure prophylaxis
H
IV (400 mg/ml formulation)
Approved
I
A: Dec21
36402
54
H
IV maturation inhibitor
H
IV infection
II
3
8
10
10
9
†
HIV broadly neutralising antibody
H
IV infection
II
373
9
9
37
H
IV maturation inhibitor
H
IV infection
I
400
4280
H
IV capsid protein inhibitor
H
IV infection
I
Infectious Diseases
Xevudy
(sotrovimab)
†
Anti-spike protein antibody
C
O
VID-19
Approved
A:Dec21
E
UA
:
May21
gepotidacin
†
T
riazaacenaphthylene bacterial type I
I
topoisomerase inhibitor
Uncomplicated urinary tract infection (uUTI) and
gonorrhea (GC)
III
30366
56
†
Leucyl t-R
NA synthetase inhibitor
T
uberculosis
II
bepirovirsen
†
H
BV antisense
Hepatitis B
II
3882
34
7
†
FimH antagonist
Uncomplicated urinary tract infection (uUTI)
I
31
86899
† 2
CR
K
-12 inhibitor
Visceral leishmaniasis
I
34
94245
†
Proteasome inhibitor
V
isceral leishmaniasis
I
255628
6
†
Mtb cholesterol dependent inhibitor
T
uberculosis
I
BVL
-GS
K098
†
Ethionamide booster
T
uberculosis
I
418213
7 (
VI
R7
832
)
†
Anti-spike protein Antibody
C
O
VI
D-19
I
VI
R-2482
† 3
Neutralizing monoclonal antibody
Inﬂuenza
I
392
3868
P
I4K beta inhibitor
Viral COP
D exacerbations
I
Priorix
(M
MR vaccine)
Live attenuated
Measles, mumps, rubella prophylaxis (US)
Registration
S: Jun21
Menveo
vaccine
Conjugated-liquid formulation
Meningococcal A,C,W and Y disease prophylaxis
in adolescents
Registration
S: Sep21
Rotarix
vaccine
Live attenuated, PCV (Porcine circovirus)
free
Rotavirus prophylaxis (U
S)
Registration
S Dec21
Bexsero
vaccine
Recombinant protein
Meningococcal B disease prophylaxis in infants (US)
III
Men AB
CWY vaccine
Recombinant protein – conjugated
Meningococcal A,B,C,W and Y disease prophylaxis
in adolescents
III
R
S
V vaccine
Recombinant protein
Recombinant protein – adjuvanted
Respiratory syncytial virus prophylaxis in pregnant
woman population to prevent respiratory syncitial virus
lower respiratory tract illness in infants during ﬁrst
Months of life by transfer of maternal antibodies
†7
Respiratory syncytial virus prophylaxis in older adult
population
†
III
III
COVI
D-19 plant-
derived virus-like
particles vaccine
(Medicago)
† 5
Recombinant protein-adjuvanted vaccine
C
O
VID-19
Registration
6
COVI
D-19 vaccine
(Sanoﬁ)
† 5
Recombinant protein-adjuvanted vaccine
C
O
VID-19
III
COVI
D-19 vaccine
(SK Bioscience)
† 5
Recombinant protein nanoparticle-
adjuvanted vaccine
COVI
D-19
III
SAM vaccine
(COVI
D-19 model)
Self-Amplifying mR
NA vaccine
C
O
VI
D-19
I
Footnotes
1 non-registrational
2
transition activities underway to enable further progression by partner
3
G
SK has exclusive option to co-develop post Ph2
4 Ph3 trial in patients with progranulin gene mut
ation
5 G
SK is contributing pandemic adjuvant to COVI
D-19 vaccines collaborations
6 Submitted in Canada
7 Enrolment and vaccination stopped in February 2022. Further analysis to better understand s
afety data from these trials is ongoing
Pharmaceuticals and Vaccines pr
oduct development pipeline
continued
Pipeline, products and competition
continued
GS
K Ann
ual R
epor
t 2021
271
Strategic report
Governance and remuneration
Financial statements
Investor information
Achieved r
egulatory
review milestones
Compound
Mec
hanism of Action/V
accine T
ype
Indic
ation
Phase
MAA
ND
A
/BL
A
Infectious Diseases
continued
Malaria next
generation vaccine
†
(fractional dose)
Recombinant protein – adjuvanted
vaccine
Malaria prophylaxis (Plasmodium falciparum)
II
Shigella vaccine
†
Bioconjugated (tetravalent) vaccine
Shigella diarrhea prophylaxis
II
Therapeutic HBV
vaccine
†
Prime-boost with viral vector vaccines
co- or sequentially administrated with
adjuvanted recombinant proteins
T
reatment of chronic Hepatitis B infections – aims
at functional cure by controlling and resolving the
infection and reducing the need for further treatment
II
S. aureus vaccine
†
Recombinant protein – bioconjugated –
adjuvanted vaccine
Active immunization for the prevention of primary
and recurrent Soft-Skin-
T
issue Infections caused
by S. aureus
II
Men AB
CWY
vaccine (2nd Gen)
Recombinant protein – conjugated
vaccine
Meningococcal A, B, C, W
,Y disease prophylaxis in
adolescents and infants
II
V
aricella New Strain
Live attenuated vaccine
Active immunization for the prevention of varicella in
individuals from 12 months of age and older
II
C. difﬁcile vaccine
†
Recombinant protein – adjuvanted vaccine
Active immunization for the prevention of the primary
C. Diff diseases and for prevention of recurrences
I
SAM vaccine
(Rabies model)
Self-Amplifying mR
NA
Rabies prophylaxis
I
Klebsiella
pneumoniae
Recombinant protein – bioconjugated –
adjuvanted vaccine
Klebsiella pneumoniae prophylaxis
I
CMV
Recombinant subunit – adjuvanted
vaccine
Cytomegalovirus (CMV) infection prophylaxis in
females 16-49 years of age
I
Immunology and Respiratory
Nucala
(mepolizumab)
Interleukin 5 (I
L5) antagonist
Hypereosinophilic syndrome
Nasal polyposis
E
G
PA
COPD
Approved
Approved
Approved
III
A: Nov21
A: Nov21
A: Nov21
A: Jul21
otilimab
†
Granulocyte macrophage colony-
stimulating factor inhibitor
Rheumatoid arthritis
III
depemokimab
†
Interleukin 5 (I
L5) antagonist (long-acting)
Asthma
III
4527
223 (AL00
1)
†
Anti-Sortilin monoclonal antibody
Frontotemporal dementia (FTD)
4
Amyotrophic Lateral Sclerosis (ALS)
III
II
385
82
7
9
†
Anti-CC
L1
7 antibody
Osteoarthritis pain
I
39153
93
†
T
ransglut
aminase 2 (T
G2) inhibitor
Celiac disease
I
4527
226 (AL1
01)
†
Anti-sortilin monoclonal antibody
Neurodegenerative disease
I
1
07
0806
Anti-I
L18 antibody
Atopic dermatitis
I
38881
30
†
Anti-I
L7 antibody
Multiple sclerosis (MS)
I
453299
0
†
HS
D1
7B13 silencer
Non-alcoholic steatohepatitis (NASH)
I
Opportunity Driven
daprodustat
H
I
F Prolyl hydro
xylase inhibitor
Anaemia of chronic kidney disease
I
II (RoW)
linerixibat
Ileal bile acid transporter (I
BA
T) inhibitor
Cholest
atic pruritus in PB
C (primary biliary c
holangitis)
III
279
8745
†
TR
PV4 channel bloc
ker
Diabetic macular edema (D
ME)
I
3884464
†
Novel mechanism
Heart failure
I
Br
and nam
es app
ear
ing in it
alic
s are tr
ade mar
ks owne
d by or lic
ense
d to the GS
K group of c
ompa
nies
.
Footnotes
1 non-registrational
2
transition activities underway to enable further progression by partner
3
G
SK has exclusive option to co-develop post Ph2
4 Ph3 trial in patients with progranulin gene mut
ation
5 G
SK is contributing pandemic adjuvant to COVI
D-19 vaccines collaborations
6 Submitted in Canada
7 Enrolment and vaccination stopped in February 2022. Further analysis to better understand s
afety data from these trials is ongoing
Pharmaceuticals and Vaccines pr
oduct development pipeline
continued
Pipeline, products and competition
continued
272
GS
K Ann
ual R
epor
t 2021
Major
Patent expiry dates
1
Products
Compounds
Indication(s)
competitor brands
US
EU
Respiratory
Anoro Ellipta
umeclidinium bromide/
vilanterol trifenatate
COPD
Stiolto Respimat,
Utibron/
Ultibro
Breezhaler
,
Duaklir Genuair
Bevespi Aerosphere,
Brimica Genuair
2027
(NC
E)
2027
-2030
(device)
2029
(NC
E)
2022-2026
(device)
Arnuity Ellipta
ﬂuticasone furoate
asthma
Beclazone, Pulmicort,
Budesonide Gx,
Asmanex, Alvesco
2021
(NC
E)
2027
-2030
(device)
2023
(NC
E)
2022-2026
(device)
Avamys/V
eramyst
ﬂuticasone furoate
rhinitis
Dymist
a, Xhance, Nasonex,
Fluticasone Gx
expired
2023
Flixotide/
Flo
vent
ﬂuticasone propionate
asthma/CO
PD
Beclazone, Pulmicort,
Budesonide Gx,
Asmanex, Alvesco
expired
(
Diskus
device)
2023-2026
(H
F
A-device)
expired
(
Diskus
device)
expired
(H
F
A-device)
Incruse Ellipta
umeclidinium bromide
COPD
Spiriva Handihaler/
Respimat, Y
upelri,
Braltus, Seebri
Breezhaler
, Bretaris
Genuair
2027
(NC
E)
2027
-2030
(device)
2029
(NC
E)
2022-2026
(device)
Nucala
mepolizumab
severe eosinophilic asthma, EG
P
A
hypereosinophilic syndrome, chronic
rhinosinusitis with nasal polyps
Xolair
, Cinqair
,
Fasenra, Dupixent
expired
2
expired
2
Relvar/
Breo Ellipta
ﬂuticasone furoate/
vilanterol trifenatate
asthma/CO
PD
Symbicort, Foster
,
Budesonide/
F
ormetrol Gx
Sirdupla, Dulera
2025
(NC
E)
2027
-2030
(device)
2027
(NC
E)
2022-2026
(device)
Seretide/Advair
salmeterol xinafoate/
ﬂuticasone propionate
asthma/CO
PD
Symbicort, Foster
,
Budesonide/
F
ormetrol Gx
Sirdupla, Dulera
expired
(
Diskus
device)
2023-2026
(H
F
A-device)
expired
(
Diskus
device)
expired
(H
F
A-device)
T
relegy Ellipta
ﬂuticasone furoate/
vilanterol trifenatate
umeclidinium bromide
COPD
T
rimbow
,
Breztri Aerosphere,
T
rixeo Aerosphere,
Enerzair Breezhaler
2027
(NC
E)
2027
-2030
(device)
2029
(NC
E)
2022-2026
(device)
V
entolin
H
FA
albuterol sulphate
asthma/CO
PD
generic companies
2023-2026
(H
F
A-device)
expired
(H
F
A-device)
Xevudy
sotrovimab
Early treatment of COVI
D-19
REGEN
-
C
O
V
,
bamlanivimab/etesevimab,
Evusheld
2041
(N
BE)
NA
Anti-virals
V
altrex
valaciclovir
genit
al herpes, coldsores, shingles
Prevymis, V
alacyclovir Gx,
V
alcyte
expired
expired
Central nervous system
Lamictal
lamotrigine
epilepsy
, bipolar disorder
V
impat, T
rokendi X
R,
Inovelon
expired
expired
Imigran/
Imitrex
sumatriptan
migraine
Zomig, Maxalt, Relpax
expired
expired
Seroxat/
Paxil
paroxetine
depression, various anxiety
disorders
T
rintellix, Aplenzin Viibryd,
Zoloft
expired
expired
Cardiovascular and ur
ogenital
Avodart
dutasteride
benign prostatic hyperplasia
Harnal, Vesomni, Urorec
expired
expired
Anti-bacterials
Augmentin
amoxicillin/clavulanate
potassium
common bacterial
infections
generic products
NA
expired
1
Includes Supplement
ary Protection Certiﬁcates whic
h were granted in multiple countries in EU (including the U
K) and patent term extensions granted in the US.
2
Dat
a exclusivity expires 2026 (EU) and 2027 (US).
Pharmaceutical produc
ts
, competition and in
tellectual proper
ty
Pipeline, products and competition
continued
GS
K Ann
ual R
epor
t 2021
273
Strategic report
Governance and remuneration
Financial statements
Investor information
Major
Patent expiry dates
1
Products
Compounds
Indication(s)
competitor brands
US
EU
Oncology
Zejula
niraparib
ovarian cancer
L
ynparza, Rubraca
2
0
31
(NCE
)
2028
(NC
E)
Blenrep
belantamab mafodotin
relapsed/refractory multiple
myeloma
Sarclis
a, X
povio
20
32
2032
Jemperli
dostarlimab
dM
M
R recurrent or advanced
endometrial cancer
, solid tumours
Keytruda
20
34
(NBE)
2034
(N
BE)
Immuno-inﬂammation
Benlysta, B
enlysta
(SC and IV)
belimumab
systemic lupus erythematosus,
lupus nephritis
Lupkynis, Saphnelo
2025
2026
H
IV
Apretude
Cabotegravir
H
IV
prevention
Descovy
, T
ruvada
2026
(NC
E)
2026
(NC
E)
Cabenuva/V
ocabria
+ Rekambys
Cabotegravir
, rilpivirine
H
IV/
AID
S
Descovy
, Genvoya,
Odefsey
, Biktarvy
2026
(NC
E)
2026
(NC
E)
Rukobia
Fostemsavir
H
IV/
AID
S
T
rogarzo
2025
(NC
E)
2025
(NC
E)
Dovato
Dolutegravir
, lamivudine
H
IV/
AI
DS
Descovy, Genvoya,
Odefsey
, Biktarvy
2027
(NC
E)
2029
(NC
E)
Juluca
Dolutegravir
, rilpivirine
H
IV/
AI
DS
Descovy, Genvoya,
Odefsey
, Biktarvy
2027
(NC
E)
2029
(NC
E)
T
riumeq
Dolutegravir
, lamivudine and
abacavir
H
IV/
AI
DS
Descovy, Genvoya,
Odefsey
, Biktarvy
2027
(NC
E)
2029
(NC
E)
Tivicay
Dolutegravir
H
IV/
AID
S
Isentress, Prezista
Symtuza, Reyataz,
Biktarvy
2027
(NC
E)
2029
(NC
E)
V
accine prod
uct
s, compet
ition an
d intellectual proper
ty
Major
Patent expiry dates
2
Products
Compounds
Indication(s)
competitor brands
US
EU
Bexsero
meningococcal group-B vaccine
Meningitis group B prevention
T
rumenba
2027
2028
Boostrix
diphtheria, tetanus, acellular
pertussis
diphtheria, tetanus, acellular
Pertussis booster vaccination
Adacel
expired
expired
Infanrix Hexa/
Pediarix
diphtheria, tetanus, pertussis,
Prophylaxis against diphtheria,
Pentacel, Pediacel,
expired
expired
polio, hepatitis B, Haemophilus
inﬂuenzae type B (E
U)
tetanus, pertussis, polio,
hepatitis B, Haemophilus
inﬂuenzae type B (E
U)
Pentaxim, Pentavac,
Hexaxim, Hexyon
V
axelis
Cer
varix
H
PV 16 & 18 virus like
particles (VLPs), AS04
adjuvant (M
PL + aluminium
hydroxide)
human papilloma virus
type 16 and 18
Gardasil (Silgard)
2028
2022
Fluarix T
etra
split inactivated inﬂuenza
antigens
(2 virus subtypes A
and 2 subtype B)
seasonal inﬂuenza prophylaxis
Intenza, Flumist QIV
,
V
axigrip QIV
,
Fluzone QIV
,
Fluzone High Dose
2022
2022
FluLaval
split inactivated inﬂuenza
antigens
(2 virus subtypes A
and 2 subtype B)
seasonal inﬂuenza prophylaxis
V
axigrip, Mutagrip,
Fluzone, Inﬂuvac,
Aggripal, Fluad,
Intenza, Flumist
2022
2022
Menveo
meningococcal group A, C, W-
135 and Y conjugate vaccine
Meningitis group A, C, W-135
and Y prophylaxis
Nimenrix, Menactra
2025
2025
Priorix
,
Priorix T
etra
a,b
V
arilrix
b
live attenuated measles,
mumps,
rubella and varicella vaccine
measles, mumps, rubella and
chic
kenpox prophylaxis
M
MR I
I (M-M-RV
axPro)
Proquad, V
arivax
expired
expired
Rotarix
Human rot
avirus RI
X4414 strain
Rotavirus prophylaxis
Rotateq
2022
2026
Synﬂorix
conjugated pneumococcal
polysaccharide
Prophylaxis against invasive
disease, pneumonia,
acute otitis media
Prevenar (Prevnar)
NA
2026
Shingrix
zoster vaccine
recombinant, adjuvanted
herpes zoster
(shingles)
Zostavax
2029
2031
1
See Note 4
6 to the ﬁnancial statements, ‘Legal proceedings’
.
2
Includes Supplement
ary Protection Certiﬁcates whic
h were granted in multiple countries in EU (including the U
K), and patent term extensions granted in the US.
a
Related compounds/indications are measles, mumps and rubella vaccine/prophylaxisb.
b
Related compound is varicella vaccine.
Pharmaceutical products, competition and intellectual property
continued
Pipeline, products and competition
continued
2
74
GS
K Ann
ual R
epor
t 2021
Brand
Products
Application
Markets
Competition
Oral health
Sensodyne,
Pronamel
toothpastes, toothbrushes,
mouth rinse
relief of dentinal hypersensitivity
.
Pronamel
additionally protects
against acid erosion
global
Colgate Sensitive Pro-Relief,
Colgate-Palmolive
Elmex, Colgate-Palmolive
Oral B, Procter & Gamble
parodontax/
Corsodyl
toothpaste, daily/medicated
mouthwash, gel and spray
helps stop and prevent
bleeding gums, treats and
prevents gingivitis
global
Colgate T
ot
al Gum Health,
Colgate-Palmolive
Oral B Gum & Enamel Repair
,
Crest Gum Detoxify
, Procter & Gamble
Polident,
Poligrip,
Corega
denture adhesive, denture
cleanser
, wipes
improve retention and comfort
of dentures, cleans dentures
global
Fixodent and K
ukident,
Procter & Gamble,
Steradent, Reckitt Benc
kiser
Aquafresh
toothpastes, toothbrushes
mouthwashes
aids prevention of dental cavities,
maintains healthy teeth, gums
and fresh breath
global
Colgate, Colgate-Palmolive
Crest, Procter & Gamble
Oral-B, Procter & Gamble
Pain relief
Panadol
tablets, caplets, infant
syrup
paracetamol-based treatment for
headache, joint pain, fever
, cold
symptoms
global (except US)
Aspirin, Bayer
T
ylenol, Johnson & Johnson
Nurofen, Reckitt Benc
kiser
V
oltaren
topical gel, diclofenac
tablets and patches
non-steroidal, diclofenac based
anti-inﬂammatory
global
Salonpas, Hisamitsu
Aspirin, Bayer
T
ylenol, Johnson & Johnson
Nurofen, Reckitt Benc
kiser
Icy Hot, Sanoﬁ
Advil
non-respiratory
range
tablets, caplets, gel caplets,
liquid ﬁlled suspension,
drops (children’
s)
ibuprofen based treatment for
headache, toothac
he, backache,
menstrual cramps, muscular
pains, minor pain of arthritis
US, Canada, Brazil,
Colombia, Mexico
T
ylenol, T
ylenol PM, T
ylenol Children’
s
Motrin, Motrin Children’
s, Johnson &
Johnson Aleve, Aleve PM, B
ayer
Vitamins, minerals and supplements
Centrum
tablets, gummies,
capsules, chewables
vitamin supplement
global
Nutralite, Inﬁnitus Cheong-K
wan-
Jung,
By-Health, Nature Made, Herbalife, Swisse
Caltrate
tablets, gummies,
soft chews
calcium supplement
global
Citracal, Bayer
, OS-Cal, Nature Made and
private label
Emergen-
C
powder, gummies
immune support diet
ary
supplement
US, Canada
Airborne, Reckitt Benckiser
Zicam, Church & Dwight
Nature made, Pharmavite
Sambucol, Healthcare Brands International
Ester-C, American Health
Respiratory health
Otrivin
nasal spray
nas
al decongestant
Germany, Netherlands,
Norway
, Russia, Sweden
Afrin, Bayer, Nasivin, Proctor & Gamble,
T
yzine, Johnson & John
son
Theraﬂu
hot liquids, tablets, syrups
cold and ﬂu relief
Russia, P
oland, US
T
ylenol Cold & Flu, Johnson & Johnson
Mucinex, Reckitt Benc
kiser
Lemsip, Reckitt Benc
kiser
Advil
Respiratory
Cold and Flu,
Advil
Respiratory Allergy
tablets
allergy relief and cold & ﬂu
relief
T
ylenol Cold & Flu, Johnson & Johnson,
Lemsip, Mucinex, Reckit Benc
kiser
Flixonase/
Flonase
nas
al spray
, tablets
allergy relief
US, China, U
K, Ireland
Claritin, B
ayer
, Allegra, Sanoﬁ
Piriton
Z
yrtec, Johnson & Johnson
Robitussin
syrup, tablets
cough/cold
US, Canada, Singapore,
Philippines, Australia
Mucinex, Reckitt Benc
kiser
Dimetapp, Foundation Consumer
Healthcare
Digestive health and other
Nexium 2
4H
R
capsules, clear minis,
tablets
treatment of frequent heartburn
(two or more days a week) in adults
(18 years and older)
US, Canada, Australia
Prilosec, Prevacid
Zovirax
Abreva
topical cream and
non-medicated patch
lip care to treat and prevent
the onset of cold sores
global
Compeed, Johnson & Johnson
Carmex, Carma Labs
Blistex, Blistex Incorporated
retail own label
ChapStick
lip balm
protect, moisturise, prevent and
soothe chapped lips
global
Blistex, Burt’
s Bees, Carmex, Carma Labs,
EO
S, Nivea, Beiersdorf, V
aseline, Unilever
ENO
effervescent
immediate relief ant
acid
global (except U
S)
Estomazil, Hypermarca, Gelusil
T
ums
chewable tablets
immediate relief ant
acid
US
Alk
a-Seltzer
, Bayer
Gaviscon, Reckitt Benc
kiser
Rolaids, Sanoﬁ
Nicorette
(US),
NicoDerm
,
Nicotinell
(ex. Australia)
lozenges, gum and
trans-dermal patches
treatment of nicotine withdrawal
as an aid to smoking reduction
and cessation
global
Nicorette, Johnson & Johnson
NiQuitin, Perrigo
Consumer Healthc
are pr
oduct
s and com
petition
Pipeline, products and competition
continued
GS
K Ann
ual R
epor
t 2021
275
Strategic report
Governance and remuneration
Financial statements
Investor information
We outlin
e below th
e princ
ipal r
isks a
nd unce
rt
ainti
es rel
evant
to GS
K’s busi
ness
, ﬁna
ncial c
ondi
tion an
d oper
ations th
at may
af
fect o
ur per
for
manc
e and abi
lity to a
chieve ou
r objec
tives
.
Th
ese ar
e the ris
ks that we b
elieve co
uld ca
use our a
ctual
results t
o differ mat
erially from
expected an
d hist
orical results.
Operating in the
pharmaceutical sector carries various inherent
ris
ks and u
ncer
ta
intie
s that may af
fect o
ur busi
nes
s.
We must c
omply w
ith a bro
ad ran
ge of laws an
d regul
ations
which apply t
o t
he research and de
velopmen
t, manufacturin
g,
testin
g, appro
val,
distrib
ution,
sales, and mark
eti
ng of
pharmaceutical, vaccine and consumer healthcare products.
Th
ese af
fec
t the cos
t of pro
duct deve
lopme
nt, the t
ime req
uired
to rea
ch the ma
rket and t
he likeli
hood of d
oing so s
ucce
ss
fully
on an u
ninter
rupted b
asis
.
As rules and
regulations
change, go
vernment
int
erpretation
evolve
s, an
d our bus
ines
s activ
itie
s develop, t
he nature o
f a
par
ti
cular r
isk may al
so alte
r
. C
hang
es to regu
lator
y regi
mes
may be s
ubst
antia
l. Any al
teratio
n in, an
d failur
e to comp
ly with
,
applicable laws
and regula
tions
could mat
erially and
adversely
af
fect o
ur ﬁnan
cial r
esul
ts.
Sim
ilar
ly
, our glo
bal bu
sines
s expo
ses u
s t
o liti
gatio
n and
governmen
t in
vestigation
s, including
product liabil
ity litigation,
paten
t and anti
trus
t litig
ation an
d sale
s and ma
rketin
g litiga
tion.
Litigation
and gov
ernment i
nv
estigations, and
the rela
ted
provisions
we ma
y mak
e f
or unfa
vo
urable out
comes and
increases in relat
ed costs such
as insurance premiu
ms,
could al
so mat
erially
and
adversely
affect our
ﬁnancial
results.
Mo
re deta
il on the s
tatus a
nd vari
ous unc
er
taint
ies in ou
r
sig
niﬁc
ant un
reso
lved dis
putes a
nd potent
ial liti
gatio
n is set
out i
n Note 46, ‘
Leg
al proc
eedi
ngs’
.
More details
regarding o
ur risk
management
framew
ork and
how we id
entif
y our p
rinci
pal ri
sks c
an be foun
d on page
s
46 to 48
.
UK regulations
require a
description o
f the
principal risks
and
unc
er
taint
ies an
d expla
nation fo
r how the
se are b
eing ma
naged
or mi
tigated
. Below i
s a des
cripti
on of eac
h of our pr
incip
al ris
ks
wit
h a summa
ry o
f the acti
viti
es that we t
ake to manag
e each
ris
k acro
ss our bu
sine
sse
s. Th
ey are not li
sted in o
rder of
signiﬁcance and consistent
with th
e principal risks
detailed
on pa
ges 4
7 to 48.
Risk deﬁnition
Potent
ial fai
lure to ap
propr
iately c
ollec
t, rev
iew
, follow u
p, or
rep
or
t human s
afet
y infor
mation (H
SI), in
cludi
ng adver
se event
s
fro
m all pote
ntial s
ource
s, an
d to act on any r
elevant ﬁ
nding
s in
a timely
manner
.
Risk impac
t
GS
K has zer
o toler
ance fo
r an unfavou
rabl
e beneﬁ
t-
to-r
isk rat
io
for pa
tients w
ho use o
ur prod
ucts
. W
e coll
ect, r
eview, follow u
p
and report human safety inf
ormation
from all
poten
tial sources,
and u
se this to c
onduc
t robus
t and tim
ely s
afety s
ignal
detection
and take
all appro
priate
measures to
safeguard
pati
ents an
d consu
mers
. If we d
o not ef
fecti
vely ma
nage ri
sks
to our pa
tient s
afety a
ctiv
ities
, the mo
st ser
ious re
perc
ussi
on
cou
ld be ha
rm to patie
nts. I
f we are no
t comp
liant w
ith all
pharmacovigilance (
or ‘drug
safety’) regula
tions
globally
,
consequences could include
inspection ﬁndi
ngs, regulat
ory
scr
utiny, civi
l or cri
minal s
anct
ions an
d eithe
r t
emp
orar
y or
per
mane
nt los
s of prod
uct ma
rketing a
uthor
isati
on. In
eff
ective
man
ageme
nt of pati
ent safe
ty ri
sks co
uld als
o lead to
rep
utati
onal da
mage
, loss of t
rust by p
atient
s and he
althc
are
providers, product
-relat
ed litiga
tion, and
loss of sharehold
er
conﬁdence.
C
ontex
t
We are ful
ly acc
ounta
ble for s
afegu
ardin
g patien
ts, an
d our
lic
ence to o
perate d
epend
s on our c
ompli
ance w
ith inc
reas
ingly
complex and v
ariable global regulat
ory requirements. These
include no
t only
pharmacovigilance regula
tions, but
also
stringent priv
acy pro
tections
and inf
ormation security
considerations. Our compliance
depends on
employ
ees
and t
hird pa
rti
es act
ing on our b
ehal
f manag
ing huma
n
saf
ety in
format
ion in ac
cord
ance w
ith our i
nterna
l proc
ess
es.
W
e balance
routine
pharmacovig
ilance act
ivities against
a
var
iety o
f busin
ess c
hange i
nitiati
ves. W
hile s
uppor
tin
g our
cur
rent pr
oduc
t por
tfo
lio, we are o
ptimis
ing how we p
er
form
pharmacovigilance so
we are
prepared t
o deliv
er our
future
strategy
, includin
g an increased focus on oncology
, va
ccines
and s
peci
alt
y medic
ines a
nd the su
cce
ssfu
l sepa
ration o
f the
Co
nsume
r Hea
lthc
are bus
ines
s in 2022.
We colle
ct info
rmati
on on the s
afet
y and ef
ﬁc
acy of our
pro
ducts i
n human
s durin
g clinic
al deve
lopme
nt and ga
in more
comprehensive in
formation
on real-world
use once o
ur products
are o
n the mar
ket. I
n additi
on to our own s
afet
y sur
veill
ance
activities, external parties analyse
publicly
-av
ailable
clinical trial
re
sults or o
ther dat
a, w
hile new ex
ter
nal ini
tiative
s use re
al-wo
rld
evid
ence f
rom sou
rce
s which a
re not ac
ces
sibl
e to GSK
, but
may be u
sed by re
gulator
y age
ncie
s to suppl
ement a
nd valid
ate
the ev
idenc
e we use to su
ppor
t the s
afety a
nd ef
ﬁc
acy of our
products
.
E
xte
nsive new
s and so
cial me
dia cove
rage of t
he safe
ty and
ef
ﬁc
acy of C
O
VI
D vacc
ines a
nd ther
apie
s has in
crea
sed th
e
public’
s recognition of the
importance of pharmacovigilance
in th
e drug deve
lopme
nt proc
ess a
nd in the p
roduc
t marke
ting
pha
se, bu
t a rise i
n misin
format
ion ha
s also l
ed to distr
ust a
nd
vaccine hesitancy.
This environment could
undermine regulatory,
gover
nment
al, an
d publi
c trus
t in medi
cines f
or treat
ing
COV
ID
-
1
9, whic
h coul
d negati
vely in
ﬂuenc
e heal
thca
re
decisions for
other
diseases, leading to
reputational
damage
or product
liability la
wsuit
s.
Principal risks and uncert
ainties
Patient
safety
276
GS
K Ann
ual R
epor
t 2021
Risk deﬁnition
Fai
lure by GS
K
, its co
ntrac
tors or s
upplie
rs to ens
ure:
–
Ap
propr
iate con
trols a
nd govern
ance o
f quali
ty in pr
oduc
t
development
;
–
Compliance with g
ood manufa
cturing
practice or
good
distribution
practice regulatio
ns in
commercial or clin
ical trials
manufacture
and distribut
ion activities
;
–
Co
mplia
nce w
ith the ter
ms of GS
K prod
uct lic
ence
s and
supporting regula
tory activities.
Risk impac
t
A fai
lure to ens
ure pro
duct q
ualit
y cou
ld have far-re
achin
g
imp
licat
ions for p
atient a
nd con
sumer s
afet
y
, caus
e produ
ct
lau
nch del
ays, dr
ug shor
ta
ges or p
roduc
t reca
lls, a
nd have
regulat
ory
, legal,
and
ﬁnancial con
sequences. These cou
ld
materially
and adv
ersely affect GSK’s reputat
ion and
ﬁnancial
results.
C
ontex
t
The external en
vironmen
t fo
r product
quality remains
challenging, a
ffected by
misinformat
ion fuellin
g vaccine
hesitancy
,
and
increased cyber
-
attacks an
d data
breaches
acr
oss th
e indus
try. Cy
ber-att
acks r
emain a key r
isk to the
integ
rity of product
quality da
ta and it
s audit
trail.
We are pre
pare
d to meet th
e 202
1 Europ
ean M
edici
nes
Agency
(EMA) requ
irements
for l
icensing o
f Medical Devices
and c
ontinu
e to prep
are for th
e in Vitr
o Diag
nosti
c Medi
cal
Dev
ice Re
gulatio
n whic
h beco
mes ef
fec
tive M
a
y 2022. We
co
ntinue to pl
an for the i
mple
mentat
ion of the N
ew Ann
ex 1
gui
danc
e for the ma
nufac
ture of Ster
ile M
edici
nal pro
duct
s in
the ﬁ
rst ha
lf of 2022.
We are inc
rea
singl
y using n
ew techno
logy to en
hanc
e the
man
ufact
ure and te
sting of o
ur prod
ucts
. For exa
mple
, we
use ne
w elect
ronic
documenta
tion
syst
ems an
d adv
anced
laboratory information management
tools.
Sig
niﬁc
ant ch
ange
s are ta
king p
lace i
n GSK a
s we imple
ment
our n
ew strateg
y and st
ructu
re. Our q
ualit
y org
anis
ations
as
ses
s thes
e chang
es to make s
ure our q
ualit
y pro
cedur
es and
gover
nanc
e can fa
cilit
ate the str
ategy, while a
lso en
surin
g that
no uni
ntende
d cons
equen
ces in
crea
se our p
roduc
t quali
ty ri
sk
.
The industr
y
is experiencing an increased regulatory on-site
ins
pecti
on pre
senc
e - resu
med si
nce the o
nset of th
e pand
emic
and we a
re tak
ing s
t
eps to e
nsure o
ur insp
ectio
n read
ines
s.
Miti
gati
ng
activ
ities
We align a
n exte
nsive gl
obal ne
twor
k of qual
ity a
nd comp
lianc
e
professionals, from sit
e-level
to
senior mana
gement with
each
bus
ines
s unit to pr
ovide over
sigh
t and as
sis
t with the d
elive
ry
of quality performance and operational
compliance. W
e
deliver
this managemen
t o
versight t
hrough a
hierarchy
of quality
cou
ncils
, an ind
epen
dent chi
ef pro
duct qu
alit
y of
ﬁce
r and a
glo
bal pro
duct q
ualit
y of
ﬁce t
hat overs
ees p
roduc
t quali
ty ri
sk
across the company
.
We have develo
ped and i
mple
mented a s
ingle qu
alit
y
man
ageme
nt system t
hat deﬁ
nes the q
ualit
y st
andar
ds and
systems
for our
businesses as
sociat
ed with
pharmaceutical,
vac
cine an
d consu
mer he
althc
are pr
oduc
ts, an
d for clin
ical
tri
al mater
ials
. This s
ystem ha
s a broad s
cop
e and is ap
plic
able
throughout t
he product lifecy
cle, from R
&D to
mature
commercial supply
.
A consolidat
ion of
regulat
ory requirements
fro
m market
s acros
s the wor
ld augm
ents thi
s system
, whic
h
me
ans it me
ets ex
terna
l expec
tatio
ns for pr
oduct q
ualit
y in the
markets
we supply
. Our syst
em is based on
the in
ternat
ionally
recognised principles from
the ICH Q
1
0 pharmaceutical quality
system
framework.
Produc
t qu
ality
Patient safety
continued
Miti
gati
ng
activ
ities
Our C
hief M
edic
al O
fﬁ
cer is a
ccou
ntabl
e for the Pa
tient Sa
fety
enterprise risk
and human
safety matters, in
collaboration with
the H
ead of G
loba
l Safet
y
. A cros
s-e
nterpr
ise sa
fety g
overnan
ce
board oversees implementation
of our
control framew
ork,
including
risk mana
gement. Our
Global Saf
ety Board ensu
res
that we a
ddre
ss huma
n safet
y pro
active
ly thro
ughout a p
roduc
t’s
life
cycle
. Our glo
bal po
licy on ma
nage
ment of hu
man saf
ety
information
requires t
hat all
employ
ees immediat
ely report issues
rel
ating to the s
afet
y of our pr
oduct
s. Ou
r Third
-Pa
rt
y Over
sigh
t
fr
amework e
nsure
s that thi
rd par
tie
s who m
a
y enc
ounter hu
man
safety informat
ion are iden
tiﬁed and trained
appropriat
ely
. W
e
man
age saf
ety in
format
ion for a
ll produ
cts an
d from al
l sourc
es
in compliance with
global regu
lations. This
information
allow
s us
to detec
t safet
y sig
nals fo
r our pro
ducts a
nd take ti
mely ac
tion
on informa
tion tha
t changes
a product’
s risk/
beneﬁt proﬁle.
Any action
s are d
iscussed beforehand with
regulat
ory
auth
oriti
es, a
nd ca
n inclu
de updat
ing the pr
esc
ribin
g inform
ation
,
communicating with healthcare pro
viders, restricting product
pre
scr
ibing
/
availab
ilit
y to help a
ssur
e safe us
e, and c
arr
yin
g out
fur
the
r clini
cal tr
ials
. In ce
rt
ain c
ase
s, it may b
e appro
priate to
stop c
linic
al tri
als or to wi
thdraw a p
roduc
t (
or a spe
ciﬁ
c batch)
from the
market.
In 2021
, we reinfo
rced r
equir
ement
s for huma
n safet
y
info
rmati
on mana
gemen
t acros
s GSK t
hroug
h a range o
f
communication efforts including i
mprov
ed int
ernal mechanisms
for ad
vers
e event rep
or
ting. We als
o launc
hed an in
itiati
ve to
auto
mate adver
se event c
ase i
ntake, p
roce
ssi
ng, and r
epor
tin
g.
We cons
olidate
d governa
nce of p
harm
acovi
gilanc
e proc
es
s-
rel
ated acti
viti
es fro
m two bo
ards in
to a single g
overna
nce
for
um, and we l
aunch
ed a pilo
t to optimi
se deli
ver
y and over
sight
of Pati
ent Saf
ety ac
tivit
ies gl
oball
y
. W
e will t
arget C
ore P
atient
Safe
ty pr
oces
ses fo
r simp
liﬁc
ation a
nd/or optim
isati
on in 202
1
and 2022
.
Principal risks and uncertainties
continued
GS
K Ann
ual R
epor
t 2021
277
Strategic report
Governance and remuneration
Financial statements
Investor information
Financial
controls and repor
ting
Risk deﬁnition
Fai
lure to co
mply w
ith cur
rent ta
x laws o
r incur
ring s
igniﬁ
can
t
los
ses d
ue to trea
sur
y acti
viti
es; failu
re to repo
rt a
ccur
ate
ﬁnancial information in compliance with accounting standards
and applicable legisla
tion.
Risk impac
t
Non-complia
nce with
existing or n
ew ﬁnancial reporting and
disclosure requiremen
ts, or changes
to
the recognition
of in
come
and ex
pens
es, c
ould ex
pose G
SK to liti
gatio
n and reg
ulator
y
act
ion and c
ould ma
terial
ly and ad
vers
ely af
fect o
ur ﬁna
ncial
re
sults
. In the c
urre
nt globa
l pand
emic
, there c
an be si
gniﬁ
cant
cha
nges at s
hor
t notic
e. Fai
lure to co
mply w
ith cha
nges in t
he
sub
stan
ce or ap
plic
ation of th
e laws gover
ning tr
ansfe
r pric
ing,
div
idend
s, ta
x cr
edits a
nd intell
ectu
al prop
er
ty co
uld als
o
materially
and adv
ersely affect our ﬁnancial result
s.
Inconsistent appl
ication of
treasury policies, transactional or
settlement errors, or counterpart
y defau
lts could lead
to
signiﬁcant losses.
C
ontex
t
We are re
quire
d by the laws of va
rious j
uris
dicti
ons to publ
icly
dis
clos
e our ﬁna
ncia
l resul
ts and even
ts that co
uld mater
iall
y
af
fect t
he Grou
p
’s ﬁnanc
ial re
sults
. Reg
ulators r
outin
ely revi
ew
the ﬁ
nanci
al sta
tements o
f listed c
ompa
nies fo
r comp
lianc
e with
new, revis
ed, or ex
isti
ng acc
ounting a
nd reg
ulator
y
req
uirem
ents
. W
e beli
eve that we com
ply wi
th the ap
propr
iate
regulat
ory requirements concerning o
ur ﬁnancial sta
tements
and the
disclosure of
mat
erial informa
tion, includ
ing an
y
transactions relat
ing t
o business restructu
ring such
as
acq
uisit
ions an
d dives
titure
s. H
owever
, shoul
d we be sub
ject to
an investigatio
n int
o potential non-c
omplianc
e
with acc
ounting
and d
isclo
sure r
equir
ements
, this c
ould le
ad to res
tateme
nts of
previously reported results
and sign
iﬁcant penalties.
Our T
re
asur
y gro
up dea
ls dail
y in high va
lue tra
nsac
tions
, mos
tly
foreign e
xchange, an
d cash management
transactions. These
tra
nsac
tions i
nvolve mar
ket volati
lity a
nd coun
terpa
rt
y ris
k.
Th
e Group’s ef
fecti
ve ta
x rate re
ﬂect
s the loc
ation
s of our
act
iviti
es and t
he value th
ey gene
rate, wh
ich dete
rmine th
e
jur
isdic
tions i
n whic
h proﬁ
ts aris
e and the a
pplic
abl
e ta
x rates
.
Th
ese may b
e higher o
r lower tha
n the U
K statuto
ry r
ate and
may re
ﬂect r
egime
s that en
cour
age innova
tion an
d investm
ent
in R&
D by provi
ding ta
x inc
enti
ves whi
ch, if c
hange
d, cou
ld
af
fect G
SK
’
s ta
x rate. I
n addit
ion, th
e world
wide na
ture of
our operations
means that
our cross-border supply rout
es,
nec
ess
ar
y to ensu
re supp
lies of m
edici
nes
, can re
sult i
n
co
nﬂic
ting cla
ims fr
om ta
x autho
riti
es as to the p
roﬁt
s to be
ta
xed i
n indiv
idual c
ountr
ies
. This c
an le
ad to doubl
e ta
xation
,
wit
h proﬁ
ts ta
xed in mo
re tha
n one cou
ntr
y
. The co
mplex
ity o
f
ta
x
regulation
s also means
that
we ma
y occasionally disagree
wit
h ta
x autho
ritie
s on the tec
hnic
al inter
pret
ation of a p
art
icula
r
are
a of ta
x law. The t
ax c
harge i
nclud
ed in our ﬁ
nanc
ial
st
atements i
s our be
st es
timate of ta
x li
abili
ty pe
nding any
aud
its by ta
x auth
oriti
es.
We expec
t there to b
e a conti
nued fo
cus on ta
x re
form
, driven
by ini
tiative
s by the OEC
D and the EC to ad
dres
s the ta
x
challenges arising
from digitalisat
ion of
the economy
. T
ogether
wit
h dome
stic ini
tiati
ves arou
nd the wor
ld, the
se may re
sult i
n
sig
niﬁc
ant ch
ange
s to esta
blish
ed ta
x pri
ncipl
es and a
n
inc
rea
se in ta
x aut
horit
y dis
putes
. Rega
rdles
s of the
ir meri
t or
outc
omes
, thes
e may be co
stly, diver
t ma
nagem
ent at
t
enti
on
and adversely i
mpact our
reputation
and relatio
nship with
ke
y
stakeholders.
Product quality
continued
We routin
ely up
date our qu
alit
y manag
ement s
ystem (QM
S
) so
it kee
ps pac
e with th
e evolvin
g exte
rnal r
egulator
y env
ironm
ent
and n
ew scie
ntiﬁc u
nder
stan
ding of ou
r produ
cts an
d
pro
ces
ses
. W
e have als
o made ou
r polic
ies an
d proc
edure
s
simpler to
understand and implement and
adopted
innov
ative
tool
s to make them m
ore us
er-
fri
endly. We regul
arly tr
ain st
af
f
in regula
tory expectations an
d learnings from
inspections
and
exi
sting pr
oce
dures s
o they ca
n maint
ain Cu
rrent G
ood
Manufacturin
g Practice
standards.
We have imple
mented a r
isk-ba
sed app
roac
h t
o as
ses
sing a
nd
man
aging th
ird par
t
y supp
liers t
hat prov
ide mater
ials u
sed in ou
r
ﬁni
shed p
roduc
ts. We expe
ct co
ntrac
t manuf
acture
rs that m
ake
our p
roduc
ts to comp
ly wit
h GSK st
anda
rds an
d regul
arly
co
nduct a
udits to pr
ovide u
s with a
ssur
ance th
at they do.
We have prod
uct inc
ident c
ommi
ttee pr
oce
sses i
n plac
e to
inv
estigate
product issues and
make
recommendations on
rem
ediati
on acti
viti
es inc
luding
, wher
e nece
ssa
ry, the r
ecal
l of
pro
ducts to p
rotect p
atient
s and con
sumer
s.
Our established complaint
process ensures we
respond
appropriately
to
product quality issues raised b
y pa
tients an
d
customers. Independent funct
ions re
view and
triage al
legations
of no
ncomp
lianc
e or mis
cond
uct rec
eive
d throug
h forma
l
and in
formal ‘
Speak Up
’ ch
annels. Global
discipl
inary and
enforcement procedures
apply t
o any
breaches of
our
standards, and are
initia
ted,
as appropriat
e, f
ollowi
ng
inves
tigati
ons
. W
e use key ri
sk indi
cator
s to suppo
rt r
isk
management
activities
and pro
vide GSK’
s Leadership T
eam
and R
isk O
vers
ight and C
omp
lianc
e Cou
ncil wi
th an
int
egrat
ed assessment of
product
quality pe
rformance.
We have comp
leted the i
nitia
l review o
f manuf
actur
ing
pro
ces
ses fo
r all pro
ducts to i
denti
fy any p
otentia
l risk
s
associated
with n
itrosamine
impu
rities. W
e
complet
ed t
he
work in
accordance with Health Authority regulatory timelines.
We are co
ntinuin
g our pro
duct eva
luatio
ns and wi
ll take any
nec
ess
ar
y ris
k mitig
ation ste
ps in 2022.
Principal risks and uncertainties
continued
278
GS
K Ann
ual R
epor
t 2021
Financial controls and r
eporting
continued
Miti
gati
ng
activ
ities
Financial results are
review
ed and
approv
ed by
regional
man
ageme
nt, be
fore be
ing revi
ewed by GS
K’s Grou
p Fina
ncial
Co
ntroll
er and C
hief F
inanc
ial O
fﬁ
cer (CF
O
). This a
llows our
Fi
nanci
al Co
ntroll
er and C
FO to as
ses
s the evolut
ion of th
e
bus
ines
s over time
, and to evalu
ate its pe
rfo
rman
ce to pla
n.
Sig
niﬁc
ant ju
dgeme
nts are r
eviewed a
nd con
ﬁrme
d by seni
or
management. W
e
int
egrate
techn
ical or organisational
transformation,
newly acqui
red activities and
external risks,
suc
h as the C
OVI
D-
19 pande
mic, in
to our ris
k ass
ess
ments
,
and apply approp
riate
controls and
revie
ws.
W
e main
tain a con
trol en
vironme
nt designed
to
identify mat
erial
errors in ﬁnancial reporting and
disclosure. The
design and
ope
rating e
ffe
ctive
nes
s of key ﬁnan
cial re
por
ting c
ontro
ls are
reg
ular
ly reviewe
d by mana
gemen
t and tes
t
ed by ex
ter
nal thir
d
par
ti
es. A mi
nimum s
tand
ard co
ntrol s
et is in pla
ce for a
ll
ﬁna
nce lo
catio
ns, ir
res
pecti
ve of size
, which i
s reviewe
d by
management and
monit
ored independent
ly
. This
gives us
as
sura
nce th
at contr
ols over key ﬁn
anci
al repo
rt
ing and
disclosure processes are operating
effectively
. Our
Global
Finance Risk M
anagement
and Controls (FRM
C
)
group
provides e
xtra suppor
t
during sign
iﬁcant transformations,
such as syst
em deployment
or management/
structural
reorganisations. W
e
add operation
al resources and adap
t
programme timelines t
o ensure
process
es
and controls are
maintained during signiﬁcant changes
.
Th
e Disc
losur
e Com
mitte
e, rep
or
ting to the B
oard
, reviews
GS
K’s quar
ter
ly res
ults an
d annua
l repor
t
. Throu
ghout th
e year,
in consultat
ion with it
s legal advisors, the
Disclosure Committee
als
o deter
mines w
hethe
r it is nec
es
sar
y to disc
lose p
ublic
ly
info
rmati
on abou
t the Gr
oup thro
ugh stoc
k exchan
ge
ann
ounce
ments
. W
e keep u
p to date with th
e latest
devel
opmen
ts in ﬁna
ncia
l repor
ti
ng requi
reme
nts by work
ing
wit
h our ex
terna
l audito
r and leg
al adv
isor
s.
Th
e T
re
asur
y M
anage
ment G
roup (
TM
G
) meet
s regul
arly
to ens
ure that li
quidi
ty, intere
st rate, c
ounter
par
ty, fore
ign
currency transaction
and foreig
n currency
translation
risks are
all m
anage
d in line w
ith the pr
uden
t appro
ach det
aile
d in the
risk strat
egies an
d policies
adopt
ed b
y our
Board.
Co
unterp
ar
ty exp
osur
e is subj
ect to de
ﬁned li
mits ap
proved
by the B
oard fo
r both cr
edit r
ating and i
ndivi
dual c
ounter
par
tie
s.
Th
e Midd
le Of
ﬁc
e withi
n T
re
asu
ry mo
nitor the m
anage
ment of
cou
nterpa
rt
y ris
k in line w
ith agr
eed po
licy wi
th oversi
ght fro
m
a corporate
compliance ofﬁcer,
operating
independently
of
T
rea
sury
. Further details
on mitiga
tion o
f T
reasur
y risks
can
be fou
nd on pag
es 228 to 2
44.
We manag
e ta
x risk th
rough r
obust i
nterna
l polic
ies
, proc
ess
es,
training, and compliance programmes
. W
e
maintain open and
constructive rela
tionships
with tax authorities w
orldwide. W
e
mon
itor gover
nment d
ebate on t
ax p
olicy in o
ur key juri
sdict
ions
,
so th
at we can un
ders
tand a
ny potenti
al futu
re chan
ges in t
ax
law an
d shar
e an infor
med po
int of vi
ew
. Wher
e releva
nt, we
prov
ide pr
agmati
c and co
nstru
ctive bu
sine
ss inpu
t to ta
x polic
y
make
rs, e
ither d
irec
tly or thr
ough ind
ustr
y tra
de bodi
es. T
his
inc
lude
s advoc
ating ref
orm to sup
por
t eco
nomic g
rowt
h and
job c
reati
on, as we
ll as th
e needs o
f our pati
ents an
d other key
stakeholders. W
e submit
signiﬁcant tax decisions to
our T
ax
Governance Board, which
meets q
uar
t
erly comprised o
f senior
GSK Finance colle
agues.
Our t
ax a
ffa
irs a
re mana
ged on a gl
obal b
asis by a te
am of ta
x
pro
fess
ional
s, le
d by the Glo
bal He
ad of T
ax
, who wor
k clos
ely
wit
h the bus
ines
s on a day-to-
day bas
is. T
he Glo
bal T
ax te
am
is su
itab
ly qual
iﬁe
d for the ro
les they p
er
form
, and we sup
por
t
the
ir trai
ning nee
ds so th
ey can pr
ovide up to d
ate techni
cal
advice in l
ine wit
h their
responsibil
ities.
We submi
t ta
x retur
ns acco
rding to s
tatutor
y tim
e limit
s and
eng
age pro
active
ly wit
h ta
x author
itie
s to ensur
e our ta
x af
fair
s
are c
urre
nt, enter
ing into c
ontinu
ous aud
it prog
ramm
es and
advance pricing
agreements
where appropriat
e. These
arrangements pro
vide long-
term
cer
tainty f
or both
tax
auth
oriti
es and G
SK over t
he ta
x trea
tment of o
ur busi
ness
,
ba
sed on f
ull disc
losu
re of all r
elevant f
acts
. W
e see
k t
o re
solve
any d
ifference
s
of in
terpretat
ion in
ta
x
legislation
with tax
auth
oriti
es in a c
oope
rative ma
nner. In exce
ption
al ca
ses
, we
may have to re
solve d
ispute
s throu
gh form
al proc
eedi
ngs.
Principal risks and uncertainties
continued
GS
K Ann
ual R
epor
t 2021
279
Strategic report
Governance and remuneration
Financial statements
Investor information
Risk deﬁnition
Th
e bribe
ry a
nd cor
rupti
on ris
k is the fa
ilure of G
SK em
ployee
s,
co
nsult
ants and t
hird pa
rt
ies to co
mply wi
th our A
nti-br
iber
y &
co
rrupti
on (A
BAC
) prin
ciple
s and st
anda
rds
, as well a
s with a
ll
applicable legislation.
Risk impac
t
Fai
lure to mit
igate thi
s risk c
ould exp
ose th
e Group a
nd
associated persons t
o go
vernmental in
vestiga
tion, regula
tory
act
ion, a
nd civi
l and cr
iminal l
iabil
ity a
nd may com
promi
se the
Gr
oup’
s abil
ity to su
pply i
ts produ
cts und
er cer
t
ain gover
nment
co
ntrac
ts. In a
dditi
on, fa
ilure to pr
event bri
ber
y or co
rrupt
ion
cou
ld have sub
stan
tial im
plic
ations fo
r GSK
’
s rep
utatio
n and the
cre
dibil
ity of s
enior l
eade
rs and m
ight er
ode inves
tor con
ﬁden
ce
in ou
r governa
nce an
d risk m
anage
ment. I
t coul
d also l
ead to
legal and
ﬁnancial
penalties.
C
ontex
t
Th
e overall e
nviron
ment for A
BAC cont
inues to b
e chall
enging
.
Co
untri
es are h
olding i
ndiv
idual
s, as we
ll as co
rpor
ation
s,
acc
ount
able by in
crea
sing t
he empl
oyer dut
y of car
e.
Divergence of
legislation,
increasing political prot
ectionism,
social inequality and pricin
g pressures are making compliance
har
der. Socie
ty is h
olding c
orpo
ratio
ns to ever high
er sta
ndar
ds,
wit
h techno
logy pr
ovidin
g a rapi
d and ano
nymous ave
nue for
dissemination
of pre
viously conﬁdential inf
ormation
and ev
en
for d
amagin
g fals
e repor
ts
.
Enforcement actions
and penalties continued
across the globe
with the
focus
on use
of t
hird-party intermediaries. Proposed
EU le
gislat
ion woul
d requi
re busi
ness
es to co
nduct d
ue
diligence on
poten
tial human
rights
and relat
ed en
vironmental
imp
acts of th
eir op
eratio
ns and su
pply c
hains
, impo
sing a le
gal
st
andar
d of car
e. In ad
ditio
n, the on
going i
mpact o
f COVI
D-
1
9
cou
ld incr
eas
e the ris
k of bri
ber
y and c
orrup
tion.
Sup
por
tive a
spec
ts of the ex
tern
al envi
ronme
nt inclu
de an
increase in t
ransparency an
d collaborat
ion among
enforcemen
t
auth
oriti
es wi
th the aim o
f reduc
ing bri
ber
y and c
orru
ption
glo
bally. Adva
nces i
n techno
logy a
nd the us
e of data a
naly
tic
s
are a
lso pr
ovidin
g bette
r plat
forms to s
trea
mline pr
oce
sse
s and
detect potential is
sues.
Miti
gati
ng
activ
ities
We have an enter
pris
e wide A
BAC prog
ramm
e desi
gned to
ens
ure co
mplia
nce wi
th our AB
A
C poli
cies a
nd miti
gate the ri
sk
of br
iber
y and c
orr
uption
. It bui
lds on ou
r busin
ess s
tanda
rds
and c
ulture to fo
rm a com
preh
ensive a
nd pra
ctic
al appr
oach to
co
mplia
nce that i
s ﬂexib
le to the evol
ving natu
re of our b
usine
ss
.
GS
K’s ABAC Gove
rnan
ce Boa
rd over
sees a
nd provi
des
programme gov
ernance and en
terprise risk
management
which
includes representation
from k
ey
functional areas.
We have appr
opria
te contro
ls in pla
ce aro
und tra
nsac
tions
and pa
yments
to
third
parties
,
such as
training,
awar
eness
ra
ising a
nd stro
ng moni
t
ori
ng. We plan to c
ontinu
e with pr
e-
and p
ost-tran
sact
ion AB
A
C due di
ligenc
e, to inc
rea
se the
ca
pabil
itie
s in the bus
ines
s on mon
itorin
g, overs
ight, a
nd red
ﬂag r
esol
ution o
f third pa
rt
ies
, and to revi
ew contr
ols and
acc
ount
abili
ties of g
overnme
nt of
ﬁci
als. We co
ntinue to a
sse
ss
and understand our
money
laundering
risk exposure and
mitigat
e an
y e
xisting
risk.
Our C
ode o
f Cond
uct, va
lues a
nd expe
ctati
ons, a
nd
commitment t
o z
ero t
olerance t
owards
briber
y
and corruption
are i
ntegra
l to how we miti
gate this r
isk
. In lig
ht of the co
mplex
ity
and g
eogr
aphic b
read
th of the ri
sk
, we cons
tantl
y evolve our
over
sight o
f activ
ities a
nd dat
a; reinfo
rce to our wo
rkf
orce
GSK’s clear
expectations
regarding
acceptable beha
viours
; an
d
maintain reg
ular commun
ications
between the
centre
and local
ma
rkets
.
We built ou
r ABAC pro
gram
me bas
ed on be
st in cl
ass
pri
ncipl
es and i
s subje
ct to ongo
ing revi
ew and deve
lopme
nt.
It p
rovide
s us wit
h the ba
sis fro
m whic
h we seek to ma
nage
the r
isk fro
m both top dow
n and bo
ttom up
. For exa
mple, t
he
programme includes top-le
vel commitment
from our
Board
and l
eade
rshi
p, and a dat
a analy
ti
cs pro
gram
me to crea
te and
emb
ed loc
al key ris
k indic
ators to e
nable t
arge
ted inter
venti
on
and risk
management
activities.
A glo
bal AB
A
C poli
cy
, and ot
her wr
itten s
tand
ards a
nd cont
rols
,
whi
ch addr
ess t
he busi
ness a
ctiv
ities t
hat give r
ise to ABAC
risk underpins
the programme.
In addition,
the programme
man
dates en
hanc
ed cont
rols over i
nterac
tions w
ith gover
nment
of
ﬁci
als an
d durin
g busin
ess deve
lopm
ent tra
nsac
tions
.
Co
ntrol
s in our AB
A
C pol
icy est
abli
sh due di
ligen
ce
requirements
for
the
engagement
of t
hird parties.
We have a dedi
cated tea
m resp
onsi
ble for th
e imple
menta
tion
and evo
lutio
n of the AB
A
C prog
ramm
e. The A
BAC team
co
ntinua
lly work
s with oth
er grou
ps acro
ss the e
nterpr
ise to
address and improv
e controls and
monitoring
requirements.
Audit & Assurance and independent business monitoring teams
co
mplem
ent the te
am’
s work a
nd provi
de adde
d ass
uran
ce.
We use is
sues fo
und dur
ing over
sight a
nd as
suran
ce exer
cise
s,
and from i
nvestiga
tions t
o iden
tify areas for speciﬁc int
er
v
ention
in th
e market
s and to dri
ve the con
tinuou
s improve
ment of th
e
programme.
We regul
arly p
rovide m
andato
ry A
BAC train
ing to empl
oyees
and r
elevant t
hird pa
rt
ies in ac
cor
danc
e with the
ir role
s and
responsibilities
and th
e risks
they
face.
We bench
mark o
ur ABAC pr
ogram
me aga
inst tho
se of oth
er
large multin
ational
companies and use
external expertise and
inter
nal in
sights to d
rive imp
roveme
nts.
For
mal an
d infor
mal ‘S
peak U
p
’ cha
nnels a
re availa
ble to rep
or
t
misconduct or no
n-compliance. The central in
vestiga
tions t
eam
revi
ews and tr
iage
s alleg
ation
s of non-c
ompl
ianc
e and all
ocate
s
for in
vestigat
ion as appropria
te.
Anti
-bribery and corruption (ABAC
)
Principal risks and uncertainties
continued
28
0
GS
K Ann
ual R
epor
t 2021
Risk deﬁnition
Failure t
o engage
in commercial
activities tha
t are consist
ent
wit
h the let
ter and s
pirit o
f the law, indus
tr
y regul
ations
, or
the Group
’
s
requirements
relating
to
sales and promot
ion
of our
medicines and
vaccines
; appropriat
e in
teractions
with
healthcare professionals/ organisations
and pa
tients
; legit
imate
and t
ransp
aren
t trans
fers o
f value; and c
ompet
ition (or anti
trus
t
)
regulations
in commercial
practices, including trade
channel
activities and tendering business.
Risk impac
t
Failure t
o
engage i
n activities
that
are consist
ent
with t
he
let
ter and s
piri
t of the law, indus
tr
y regul
ations
, or the G
roup’s
requirements
relating
to
sales and promot
ion of
medicines
and vaccines
; with
appropriat
e int
eractions
with healthcare
professionals (HCPs
)
, organisat
ions and
patients
;
with
leg
itimate a
nd tran
spar
ent tra
nsfer
s of valu
e
; and wi
th pri
cing
and competition
(
or
antitrust
) regu
lations
in commercial
practices
, including
trade channel activities and business
tend
ering
, coul
d, mater
ially a
nd adver
sel
y affe
ct our a
bilit
y to
deliver o
ur strat
egy and
long-
term priorities. Addit
ionally
,
it ma
y
re
sult in in
comp
lete aware
nes
s of the ris
k
/be
neﬁt p
roﬁl
e of our
pro
ducts a
nd pos
sibl
y subop
timal tr
eatme
nt of pati
ents an
d
consumers; g
overnmen
tal inv
estigation,
regulat
ory action and
leg
al pro
ceed
ings br
ought ag
ains
t the Gro
up by govern
menta
l
and p
rivate pl
ainti
ff
s which c
ould r
esult i
n govern
ment
sanctions
,
and criminal and/
or ﬁnancial penalties. Any practices
that a
re found to b
e misa
ligne
d with ou
r value
s and exp
ectat
ions
cou
ld als
o resul
t in rep
utatio
nal ha
rm and di
lute trus
t
established with external stak
eholders.
C
ontex
t
We oper
ate in a highl
y regul
ated and ex
tr
emely c
ompe
titive
biopharma and consumer
industry
, amongst
peers who make
signiﬁcant prod
uct in
nov
ation
s and
tec
hnical adv
ances and
intensify price competition.
Additional
external fact
ors impacting
our b
usine
ss op
eratio
ns incl
ude the o
ngoing C
OVI
D-
1
9 glo
bal
pandemic, access limitations
to
our cust
omers, macroeconomic
inﬂationary dynamics, and pricing pressure across mark
ets.
T
o a
chieve ou
r strateg
ic obje
ctive
s, we mus
t cont
inue to
develop
commercially viable
new pr
oducts and
deliver
add
ition
al use
s for exis
ting pr
oduct
s that add
res
s the nee
ds
of pat
ients
, cons
umer
s, HC
Ps and p
ayers
. Fina
ncia
lly
, new
products/indication
s carry with them
an uncertainty with
regards to
future
success
.
Product dev
elopment is
costly
,
tim
ely
, and u
ncer
ta
in, and c
arr
ies wi
th it the p
otentia
l for fai
lure
at any st
age. Eve
n upon su
cce
ssf
ul produ
ct devel
opmen
t, we
sti
ll face c
halle
nges i
n how we laun
ch and how o
ur comp
etitor
s’
pro
ducts o
r pric
ing str
ategie
s could r
ende
r our as
sets le
ss
co
mpetit
ive. Sup
por
ting o
ur ef
for
ts on pro
duct in
novation i
s a
co
ntinue
d focus on c
reati
ng an omn
ichan
nel way of
engagement,
with a
continu
ed focus
on ou
r pat
ient.
Onc
e we have an ap
proved m
edici
ne or vac
cine, i
t is our
obligation
to
provide
importa
n
t info
rmation t
o t
he healthcare
co
mmunit
y in var
ious ways
, always i
n a resp
onsib
le, le
gal, a
nd
ethical manner
. Appropriate product
promotion
ensures HCPs
have ac
ces
s to the info
rmatio
n they nee
d, that p
atient
s and
co
nsume
rs have the f
acts ab
out the m
edici
nes an
d vaccin
es
they
requir
e, and
prescribed, recom
mended, or
used
in a
manner that
provides healthcare beneﬁt.
We are co
mmit
ted to the eth
ical a
nd res
pons
ible
commercialisation of
our produ
cts in su
pport of our purpose
to
imp
rove the qu
alit
y of huma
n life by ena
bling p
eopl
e to do more
,
fee
l bette
r
, and live l
onger.
Miti
gati
ng
activ
ities
T
o a
chieve ou
r strateg
ic obje
ctive
s, we mus
t meet p
rice
exp
ectat
ions of p
ayers
, HCP
s, con
sumer
s, a
nd the co
mmunit
y.
Our va
lues a
nd beh
a
vio
urs pr
ovide a gu
ide for how w
e lead an
d
make d
ecis
ions
. W
e cons
tantl
y stri
ve to do the ri
ght thing a
nd
deliver q
uality medicines and v
accines and
sustain reliable
sup
ply to mee
t custom
er need
s. I
n doing s
o, we seek to e
nsure
our ac
tions r
eﬂe
ct GS
K’s value
s, beh
aviour
s, an
d purp
ose.
We under
sta
nd the imp
act of d
ata on our i
ndust
ry a
nd stri
ve to
become an organisation
that
makes da
ta-driven
decisions
; this
app
roach i
s align
ed to our ef
for
ts to be
come m
ore agi
le and
work a
t pace. G
SK ha
s acted to e
nhanc
e and im
prove our
policies and
standards, applicat
ion of
data an
alytic
s
and o
ur
cha
nnel ac
tivi
ties
. W
e have devel
oped po
lici
es to supp
or
t the
strong gro
wth of our
Consumer Healthcare interne
t channels
and dig
ital marke
ting a
ctivities, using
artiﬁcial intell
igence-
power
ed tool
s to improve th
e oversi
ght of mo
re than 700
GSK websit
es.
We have evolved p
olici
es and s
tand
ards i
n a stepwis
e appr
oach
to ens
ure that c
ommer
cial a
ctivi
ties t
hat we unde
rt
ake or ar
e
conduct
ed on
our be
half are
exec
uted
within
our
established
gover
nanc
e. We train e
mployee
s on rel
evant info
rmati
on with a
foc
us on inter
acti
ve lear
ning an
d eleme
nts of be
haviour
al
science. All our
commercial activities w
orldwide must
conform
to high e
thica
l, reg
ulator
y
, and i
ndust
ry s
tand
ards
. Wher
e loc
al
st
andar
ds dif
fer f
rom glo
bal one
s, we ap
ply tho
se that a
re mos
t
str
ingen
t. Whe
re the st
anda
rds of a
n acqui
red co
mpany or j
oint
ventu
re par
tne
r dif
fer fro
m our glob
al st
andar
ds, we r
emedi
ate
legacy pol
icies and
implement
revisions,
so the
y alig
n.
Our Consumer Healthcare business has harmonised policies
and procedures, to
guide reg
ional and
global commercial
practice processes, and clariﬁed applicable
standards fo
r
ope
ratio
ns in the ma
rkets in w
hich we o
perate
. In 202
1 we have
implemented a
speciﬁc control framework f
or our
ﬁve export
hub
s, and e
mbed
ded our p
romoti
onal c
ode in C
hina to ena
ble
responsible business growth and employee
behaviour
.
Commercial prac
tices
Principal risks and uncertainties
continued
GS
K Ann
ual R
epor
t 2021
281
Strategic report
Governance and remuneration
Financial statements
Investor information
Commercial practices
continued
GSK
’
s
Pharmaceuticals
,
Consumer Healthcare and V
accines
bus
ines
ses c
ontinu
e to use our i
nterna
l contro
l fram
ework to
sup
por
t its a
sse
ssme
nt and ma
nagem
ent of ri
sks. B
usin
ess
unit risk
management and
compliance boards, which mana
ge
ris
ks acr
oss gl
obal an
d in-c
ountr
y bus
ines
s acti
vitie
s, over
see
commercial activities and their mon
itoring programmes. The
recent combination
of t
he Legal and
Compliance functions
into on
e team wi
ll resu
lt in a str
onger, more c
ohes
ive sup
por
t
function for our
businesse
s.
All p
romot
ional m
ateria
ls and ac
tivi
ties mu
st be rev
iewed
and a
pprove
d acco
rding to ou
r polic
ies an
d stan
dard
s and
co
nducte
d in acc
orda
nce wi
th loca
l laws and r
egul
ations; the
se
requirements
seek to
ensure
that su
ch mat
erials and
activities
fairly represent t
he Group
’
s produ
cts or services
.
Consumer
He
althc
are ha
s dep
loyed a new c
opy appr
oval tool to im
prove
controls ov
er important promotional activity
. Where necessar
y
,
in th
e event of mis
cond
uct, we h
a
ve dis
cipli
ned emp
loyees
, up
to and i
ncludi
ng termi
nation o
f contr
act, a
nd clawe
d back
remuneration
from senior
management.
We have conti
nued to evol
ve our inc
entive p
rogra
mme for
Ph
armac
euti
cals a
nd V
acc
ines s
ales r
epre
sent
atives to b
etter
rec
ogni
se and re
ward ind
ividu
al ef
for
t. I
n all matur
e marke
ts, the
capped variable pa
y element
of representat
ives’
compensation
is eva
luated on th
e bas
is of indi
vidu
al sal
es ta
rgets
.
We imple
mented t
his in a pha
sed a
nd thoug
htf
ul appr
oach
sup
por
ted by a co
mpreh
ensive t
raini
ng, co
ntrol
, and mon
itoring
fr
amework to e
nsure f
ull ali
gnment w
ith GS
K’s valu
es-b
ased
approach t
o HCP engagement.
We allow fa
ir mar
ket value p
a
yme
nts to be ma
de by GSK to
exp
er
t pract
ition
ers to sp
eak ab
out our i
nnovative m
edic
ines
and va
ccin
es duri
ng a res
tric
ted peri
od in a pr
oduct
’s lifecyc
le.
A glo
bal end
-to-end p
roce
ss an
d system i
s curre
ntly se
t t
o
beg
in depl
oymen
t in Q4 202
1 and w
ill imp
rove not onl
y the
execution o
f these activities, but also
strengthen controls
thro
ugh auto
mation a
nd use of d
ata
. Wher
e perm
itted we
rep
or
t paymen
ts to indiv
idua
l HCP
s as par
t of o
ur comm
itmen
t
to
transparency and
responsible disclosure.
Co
nsume
r Hea
lthc
are ha
s been a key dr
iver in t
he develo
pment
of an e
thica
l code f
or the Gl
obal S
elf-C
are F
eder
ation, s
etti
ng
principles for
promotion
to
healthcare practitioners and
pharmacy staff.
GSK is committed t
o complying
with all
applicable sanctions
laws a
nd regu
lation
s and ha
s deploye
d a progr
amme to e
nable
man
ageme
nt of sa
nctio
ns risk
. Th
e progr
amme
, led by GS
K
Fi
nance
, is mad
e up of vari
ous syste
ms and c
ontro
ls inclu
ding,
but n
ot limite
d to, polic
ies an
d proc
edure
s, tr
ainin
g and
awaren
ess, screening, monit
oring
and risk
reporting.
Non-promotional engagemen
t
Risk deﬁnition
Failure t
o engage
in n
on-promotional
activities tha
t are
consistent
with
local law
s, regulat
ions and
guidance,
Industry
Codes, internal GSK po
licies, standards and
other
control
s,
and G
SK val
ues
, includ
ing i) co
mmunic
atio
ns to HCP/OHS o
r
non
-HC
Ps rel
ating to our m
edic
ines an
d/
or a
ssoc
iated dis
eas
e
areas; ii
) appropriat
e conduct
of non
-promotional
interaction
s;
and iii) legitimacy and transpare
ncy
of non-promotional
interaction
s.
Risk impac
t
Wi
thout c
ontrol
s in plac
e, the r
isk co
uld res
ult in re
al,
perceived, or disg
uised promot
ion includin
g off-label and
prior
-authorisation
promotion,
and real or
perceived pro
vision of
med
ical a
dvic
e. Thi
s in turn c
ould le
ad to cri
minal i
nvestig
ations
and p
enal
ties
, civi
l litiga
tion, o
r comp
etitor c
ompla
ints
. At the
sa
me time
, if we do not e
ngage f
ully an
d appro
priate
ly
, this
cou
ld res
ult in pat
ient ha
rm, fa
ilure to ad
vanc
e scien
ce and
innov
ation, rep
utational damage,
and ﬁnancial
loss. Such
co
nsequ
ence
s may redu
ce the tr
ust of th
e publi
c, pati
ents,
healthcare professionals
,
pay
ers, regulators, and gov
ernments.
C
ontex
t
Non-promotional en
gagements are
diverse a
ctivities directed
at he
althc
are pr
ofes
siona
ls, a
s well as p
atient
s, payer
s, an
d
external stakeholders. Such enga
gements are
conducted
to
imp
rove patie
nt car
e throug
h the exch
ange or p
rovisi
on of
kn
owled
ge on the u
se of our p
roduc
ts and re
lated di
seas
es
.
Non-promotional en
gagement with
external stakehol
der groups
is vi
tal to GS
K
, as a re
sear
ch-ba
sed h
ealt
hcar
e comp
any
, and
necessar
y f
or sci
entiﬁc and
medical
advances. W
e expect our
non-promotional
activities t
o be
scientiﬁcally sound and
accurat
e, conduct
ed et
hically and
transparent
ly
, an
d complian
t
with applicable codes, law
s, and regula
tions. How
ever
, non-
promotional
engagements
are largely un
regulat
ed. Therefore,
measured risk-
taking, rooted in sound v
alues, and principles-
based decision-making, training, communicat
ion, and
mon
itorin
g of such ac
tivi
ties a
re key to manag
ing the r
isk and
enabling
full an
d appropria
te
engagement.
Miti
gati
ng
activ
ities
Our C
hief M
edic
al O
fﬁ
cer (CM
O
) overs
ees al
l non-p
romoti
onal
eng
ageme
nt as en
t
erp
rise r
isk ow
ner
. The G
SK C
ode of
Pr
actic
e is the key i
nterna
l policy f
or non-
promot
ional
engagement
activities. These act
ivities inclu
de scient
iﬁc
interaction
s, support of medical education,
advice seeking,
gath
ering i
nsigh
ts on unm
et need
s of patie
nts, s
cienti
ﬁc
communication o
f our
research, and disease aw
areness.
Principal risks and uncertainties
continued
28
2
GS
K Ann
ual R
epor
t 2021
Privacy
Risk deﬁnition
Th
e failur
e to colle
ct, s
ecure
, use, s
hare a
nd des
troy Per
sonal
In
formati
on (PI
) in acc
orda
nce wi
th data pr
ivacy l
aws can l
ead
to har
m to indiv
idual
s (
e.g. ﬁ
nanci
al, str
ess
, prej
udic
e
) a
nd GS
K
(
e.g.
ﬁnes, operational, ﬁnancial
and reputation
al).
Risk impac
t
No
n-co
mplia
nce wi
th data p
rivacy l
aws glob
ally co
uld le
ad to
har
m to indiv
idua
ls and GS
K
. It co
uld als
o damag
e trus
t
between GSK and
individuals, commu
nities, business partners
and g
overnm
ent auth
oriti
es. M
any co
untrie
s have inc
reas
ed the
enforcement pow
ers of their
data prot
ection authorities b
y
all
owing th
em to impo
se sign
iﬁc
ant ﬁn
es, im
pact c
ross
-bor
der
dat
a ﬂows, o
r tempor
aril
y ban dat
a proc
ess
ing. M
any new
cou
ntr
y laws als
o give ind
ivid
uals th
e right to br
ing co
llec
tive
leg
al acti
ons aga
inst c
ompa
nies li
ke GSK fo
r failur
e to follow
dat
a priva
cy laws.
C
ontex
t
Data privac
y legislat
ion is d
iverse with l
imited
harmonisation
or simpliﬁcation. It is challenging
for
multinationals
to
st
andar
dise th
eir ap
proac
h t
o co
mplia
nce wi
th data p
rivacy
laws
. Gover
nment
s are enfo
rcing c
ompl
ianc
e with dat
a pri
vacy
laws more
rigorously
. The f
ocus on the
ethical use o
f personal
info
rmati
on is grow
ing, over a
nd above c
ompli
anc
e with dat
a
pri
vacy laws
, due to an i
ncre
ase in t
he volume o
f data
processed and a
dvances i
n t
echnology
.
W
orkforce protection
and effective priv
acy cont
rols for
research
during the COVID
-
1
9 pandemic cre
a
te unique challenges.
Additionally
, new data priv
acy la
ws, such
as the P
ersonal
Information Pro
tection
Law (PIPL) in China, and court decisions
– like th
e Cour
t of J
ustic
e of the Eu
rope
an Unio
n rulin
g for
Schrems II – are i
nval
idating
established interna
tional da
ta
transfer mechanisms
that
interna
tional companies
had relied
on. T
he inc
rea
sing tre
nd for dat
a sovere
ignt
y aff
ects ou
r abili
ty
to dri
ve medic
al inn
ovation a
nd to ef
fecti
vely ope
rate
interna
tionally
Miti
gati
ng
activ
ities
Our G
ener
al C
ounse
l is also t
he chai
r of our Pr
ivacy
Gove
rnanc
e Boa
rd, wh
ich over
sees G
SK
’
s overa
ll data p
rivacy
ope
rating m
odel
. Eac
h GSK bu
sine
ss are
a has a
ppoin
ted a risk
owne
r acc
ounta
ble for over
see
ing its p
rivacy r
isks
, supp
or
ted
by pri
vacy le
ader
s withi
n their b
usine
ss.
In s
ome co
untrie
s data p
rivacy l
aws requ
ire app
ointm
ent of a
dat
a protec
tion of
ﬁc
er (DP
O
). GS
K appo
inted a sin
gle DP
O for
the EU
, repre
sente
d and sup
por
ted in sp
eciﬁ
c coun
trie
s by
countr
y
privacy advisors
.
Our G
ener
al C
ounse
l is GSK
’s enterp
rise r
isk own
er (ERO).
Th
e ERO ha
s appoi
nted a del
egate ri
sk owne
r
, t
he glob
al
pri
vacy of
ﬁc
er (
GP
O
), who h
as day-to-
day acc
ounta
bilit
y for
designing and implementin
g the
control framework. The GPO
co
-lea
ds the cro
ss-f
uncti
onal P
rivacy C
entr
e of E
xcelle
nce,
toget
her wi
th the Gl
obal P
rivacy C
ouns
el. P
rivacy o
fﬁ
cer
s,
pri
vacy co
unsel
, and mul
tiple c
ountr
y pri
vacy ad
visor
s (
who a
re
fam
iliar w
ith loc
al pr
ivacy re
gulati
ons
) supp
or
t thes
e group
s.
GSK has evolv
ed the in
itial control framew
ork implement
ed for
the EU G
ener
al Dat
a Protec
tion Re
gulati
on into a
comprehensive privacy
control framework, based on global
privacy princi
ples common across t
he global
privacy landscape.
Thi
s glob
al fra
mework de
ployed i
n countr
ies s
howing a n
eed for
such a comprehensive
framework, based on factors lik
e robust
local privacy leg
islation, established da
ta prot
ection aut
horities,
and G
SK foo
tprint
. Beyond t
hose c
ountri
es, we a
re dep
loying a
pro
por
tion
ate contro
l fram
ework to se
t up minim
um priva
cy
standards irrespective
of an
y ap
plicable legisla
tion.
Our P
riva
cy Cen
tre of E
xcel
lence i
s res
ponsi
ble for:
–
operating and i
mproving t
he centralised global privac
y control
framework;
–
continuously asses
sing and
providing relev
ant and
pro
por
tion
ate contro
ls and a
id to non-
deploye
d marke
ts;
–
mon
itorin
g new
, or cha
nging
, laws and a
daptin
g the pri
vacy
framework; accordingly
,
and
–
dep
loying a c
ompr
ehens
ive tra
ining pr
ogra
mme to dri
ve
greater a
wareness and accountabilit
y
for managing personal
information
across the
entire
organisation.
We cer
tif
y key GS
K priva
cy net
work rol
es wi
th an acc
redite
d
interna
tional priva
cy association.
We conti
nuousl
y impr
ove our pro
ces
ses
, such a
s issu
e
identiﬁcation, repor
ting and handling,
through monit
oring.
Th
e Priva
cy Ce
ntre of E
xcel
lenc
e engag
es in new bu
sine
ss
devel
opmen
t oppor
tun
ities a
t an ear
ly sta
ge to ensur
e we
per
fo
rm appr
opri
ate due dili
genc
e and the r
ight ste
ps take
n
whe
n onbo
ardin
g or spli
ttin
g off a b
usine
ss uni
t.
Sin
ce the p
andem
ic, we have se
en a co
ntinue
d incre
ase
in virtual engage
ments (
eg with e
xternal experts, advisory
boards, patien
t adv
ocacy
,
patient
engagemen
ts and
scientiﬁc
co
ngres
ses). W
e fur
the
r develop
ed and m
oder
nised o
ur digi
tal
app
roach to H
CPs a
nd insi
ght-gath
ering a
nd appl
ied our
internal principles and policies to
this rapidly changing and
growing environment.
We enhan
ced ou
r interna
l net
works to fo
ster col
labo
ration a
nd
be
st pra
ctice s
hari
ng in ris
k mana
gemen
t. The n
etwor
ks wil
l
identify emerging risks associat
ed with n
on-promotional
act
iviti
es ea
rly and s
uppo
rt s
taf
f to condu
ct acti
viti
es in
co
mplia
nce wi
th GSK
’s values a
nd poli
cie
s, loc
al laws
, and
reg
ulatio
ns. We cont
inue to buil
d ef
fecti
ve manag
ement
mon
itorin
g systems a
nd app
ly key risk i
ndic
ators for m
anagi
ng
non-promotional
engagement.
Non-promotional engagement
continued
Principal risks and uncertainties
continued
GS
K Ann
ual R
epor
t 2021
283
Strategic report
Governance and remuneration
Financial statements
Investor information
Risk deﬁnition
Research Practices risk is the
failure
to
adequat
ely conduct
ethi
cal a
nd sound p
re-
clinic
al an
d clinic
al re
sear
ch. I
n additi
on,
it is t
he fail
ure to enga
ge in sc
ienti
ﬁc acti
viti
es that a
re
co
nsiste
nt with th
e lette
r and spi
rit of th
e law and in
dustr
y, or
the Group
’
s requirements. It comprises the
following
sub-risks:
Dat
a Govern
ance
, Lab
orator
y Re
sear
ch, an
d Huma
n Subje
ct
Research.
Risk impac
t
Th
e potenti
al impa
cts of the r
isk in
clude h
arm to hum
an subj
ects
,
reputational damag
e, failure
to
obtain the
necessar
y regula
tory
app
rovals fo
r our pro
ducts
, gover
nment
al inves
tigati
on, leg
al
pro
ceed
ings br
ought ag
ains
t the GS
K by governm
enta
l and
privat
e plain
tiffs (product liability su
its and
claims f
or damages
),
los
s of reven
ue due to ina
dequa
t
e paten
t protec
tion or in
abili
ty
to
supply our
products, and regu
lat
ory action such as ﬁnes,
penalties, or loss of product auth
orisation. Poor da
ta integrity
and g
overna
nce co
uld com
promi
se GS
K’s R&D ef
for
ts a
nd
neg
ativel
y impac
t our rep
utati
on. Any of t
hese c
ould mate
rial
ly
and a
dvers
ely af
fec
t our ﬁna
ncia
l resul
ts and d
amage th
e trus
t
of pat
ients a
nd custo
mers
.
C
ontex
t
Res
ear
ch involv
ing anim
als c
an rai
se ethic
al co
ncer
ns. I
n
many c
ase
s, howeve
r
, rese
arch i
n anima
ls is the o
nly way to
inves
tigate th
e eff
ects of a p
otentia
l new med
icine i
n a livin
g
bod
y other th
an in hum
ans
. Anima
l res
earc
h provid
es cri
tica
l
informa
tion
about t
he causes
and mech
anisms o
f diseases an
d
therefore
remains a
vital part of our research. W
e
continually
se
ek ways in whi
ch we ca
n minimi
se our us
e of anim
als in
research, development,
and t
esting, while
complying with
reg
ulator
y req
uirem
ents an
d reduc
ing the im
pact o
n the
animals
used.
Hum
an subj
ect re
sea
rch is c
ritic
al to as
ses
sing a
nd
dem
onstr
ating th
e safet
y and ef
ﬁc
acy of o
ur invest
igatio
nal
pro
ducts o
r fur
ther eva
luate our p
roduc
ts onc
e they have bee
n
app
roved. T
his re
sear
ch inc
ludes c
linic
al tri
als in h
ealthy
volun
teers a
nd patie
nts and f
ollows re
gulati
ons and h
igh ethi
cal
,
medical, and
scient
iﬁc standards. W
e
disclose
the
results
of
this research externally
regardless of whether
they
reﬂect
pos
itive
ly or neg
ativel
y on our pr
oduct
s, so th
at the sci
entiﬁ
c
co
mmunit
y ca
n lear
n from th
e outcom
es of ou
r rese
arch
.
We also wor
k with h
uman bi
ologi
cal s
ampl
es whi
ch are
fun
damen
tal to the d
iscove
ry, develo
pment
, and s
afety
mon
itorin
g of our pro
ducts
. We are co
mmit
ted to mana
ging
hum
an biol
ogic
al sam
ples i
n acco
rdan
ce wit
h relevan
t laws,
reg
ulatio
ns, an
d ethic
al pri
ncipl
es, a
nd in a man
ner that
respects the int
erests of sample donors.
Dat
a is pivot
al to our R&
D strate
gy and we ar
e ma
ximi
sing the
use o
f data to se
rve p
atient
s. Gove
rning o
ur data in a
cco
rdanc
e
with relev
ant la
ws, regula
tions, contractual
obligatio
ns,
expectations, and
our cult
ure across priv
acy
,
informat
ion
security
, and
data in
tegrity is
essential.
We use a wi
de vari
ety of b
iolog
ical m
ateria
ls in the di
scove
ry,
re
sear
ch, an
d develop
ment of ou
r ass
ets. T
hrou
gh the
Co
nventio
n on Bio
logic
al Di
versi
ty (CB
D
) and the N
agoya
Protocol, the in
ternational
community has established a global
fr
amework r
egula
ting ac
ces
s to, and use o
f, geneti
c res
ource
s
of non-hu
man origin
in research and de
velopmen
t.
We suppo
rt th
e prin
ciple
s of acc
ess to, a
nd bene
ﬁt-sha
ring
of, ge
netic re
sour
ces a
s outlin
ed in the C
BD an
d the Nag
oya
Protocol. W
e also
recognise the importance of appropriate,
effective, and proportionate implementation
measures at
national
and regional
level
s.
Miti
gati
ng
activ
ities
Th
e Rese
arch P
ract
ices r
isk is ove
rse
en by an ente
rpri
se
fr
amework t
hat see
ks to stre
ngthe
n governa
nce ac
ross R
&D
in our Pharmaceuticals, V
accines and Consumer Healthcare
businesse
s.
Under the
leadership of t
he Research Practices ent
erprise risk
owner
,
management
of th
e risk tak
es a pragma
tic approach
to
information
sharing, streamlin
ing risk iden
tiﬁcation and
escalation while en
suring o
wnership of risk
mitigation
stays
with the business.
We have an es
tabli
shed O
f
ﬁce of A
nima
l W
elfa
re, Ethi
cs an
d
Str
ategy and R
isk (OA
WES
R), led by our C
hief Veterin
ar
y
Of
ﬁ
cer, that sup
por
ts the hum
ane an
d resp
onsib
le car
e of
animals, carries out
ethical re
views
and i
ndependent
scientiﬁc
revi
ews of ani
mal stu
dies
, and sh
ares k
nowl
edge an
d advoc
ates
for th
e appli
catio
n of non-a
nima
l altern
atives
. The OAWES
R
prov
ides a f
ramewo
rk of ani
mal wel
fare gove
rnan
ce, de
ﬁnes a
nd
prov
ides ove
rsig
ht for tra
ining i
n anima
l care a
nd, pr
omotes t
he
replacement, reﬁnement an
d reduction
of animal
research,
co
nduct
s quali
ty as
ses
smen
ts, ma
nage
s a progr
amme of
ex
terna
l anima
l dilig
ence
, and devel
ops an
d deploy
s strateg
ies
for re
prod
ucing ex
peri
ments a
nd tran
slatin
g them to hum
an
clinical end points.
Ens
uring we i
mplem
ent and m
ainta
in pro
per dat
a govern
ance
co
ntrols r
emain
s an imp
ort
ant pr
iori
ty, espe
ciall
y as our
sci
enti
ﬁc str
ategy is evol
ving to ta
ke advan
tage of th
e breat
h of
our d
ata (
for exa
mple: ge
nomic
s and ar
ti
ﬁcia
l intelli
genc
e and
mac
hine le
arni
ng). We focus o
n buildi
ng data i
ntegrit
y as we
ll as
pri
vacy an
d usage c
ontro
ls into our i
nterna
l contr
ol fra
mework
.
Quality as
surance
teams conduct
audits t
o pro
vide indepen
dent
business monitoring of
our in
ternal controls.
Our R&D organisat
ion maintains
and contr
ols pre-publication
procedures t
o guard
against
public
disclosure be
fore pa
ten
t
app
licat
ions ar
e ﬁled
. In add
ition
, bec
ause a la
ck of dat
a
integrity in
preparing pat
ent
application da
ta and in
formation
ca
n lead to a lo
ss of pa
tent prote
ction
, lega
l exper
ts c
ollab
orate
wit
h R&D to sup
por
t the rev
iew proc
es
s for new paten
t
applications. Our R
&D organisation
also collaborat
es with
leg
al exp
ert
s throu
ghout th
e develop
ment of o
ur ass
ets to
ta
ke accou
nt of any re
levant thi
rd-p
ar
ty paten
t right
s.
Research practi
ces
Principal risks and uncertainties
continued
28
4
GS
K Ann
ual R
epor
t 2021
Environment
, he
alth and s
afety
Risk deﬁnition
Failure in
management
of:
–
execution o
f hazardous activities;
–
GS
K’s physi
cal a
sset
s and inf
rast
ructu
re;
–
handling and
processing of haz
ardous
chemicals and
biological agents;
–
co
ntrol of r
elea
ses of s
ubst
ance
s harm
ful to the e
nviron
ment
in bo
th the sho
rt a
nd long
-t
erm;
le
ading to inc
ident
s whic
h could d
isru
pt our R&D a
nd Supp
ly
act
iviti
es, h
arm em
ployee
s, har
m the co
mmuni
ties an
d harm
the l
ocal e
nviron
ments in w
hich we o
perate
.
Risk impac
t
Fai
lure to ma
nage EH
S risk
s could l
ead to si
gniﬁ
cant ha
rm to
peo
ple, th
e enviro
nment a
nd the c
ommuni
ties i
n which we
ope
rate; ﬁnes; in
abili
ty to me
et stake
holde
r expe
ctati
ons and
regulat
ory requirements
; litiga
tion or
regulat
ory action
; and
damage t
o the
company’
s rep
utation, which
could ma
terially
and a
dvers
ely af
fec
t our ﬁna
ncia
l resul
ts.
C
ontex
t
GS
K is subj
ect to the h
ealt
h, safe
ty, and envi
ronme
ntal l
aws
of var
ious ju
risd
ictio
ns. T
hese l
aws impo
se duti
es to prote
ct
peo
ple, th
e enviro
nment
, and the c
ommu
nitie
s in whic
h we
operate.
Miti
gati
ng
activ
ities
Th
e Glob
al Lea
ders
hip T
e
am is re
spo
nsibl
e for EHS
gover
nanc
e and ri
sk overs
ight. T
hey ens
ure the
re is an ef
fe
ctive
control framework
‘in-place’
and ‘in-use
’ t
o manage t
he EHS
ris
ks, i
mpact
s, and l
egal c
ompli
ance i
ssue
s in ea
ch of our
business units. Th
is includes
assigning responsib
ility to
senior
man
ager
s for prov
iding a
nd maint
ainin
g our co
ntrols
, and for
ens
uring th
at tier
ed moni
toring a
nd govern
ance p
roce
sse
s are
in pl
ace wi
thin the
ir busi
nes
s units
. Funct
ion le
ader
s ensur
e that
the EHS control
framework is
implemented
effectively in their
re
spec
tive bus
ines
s area
, that i
t is com
plia
nt with a
pplic
able
laws
and regula
tions, and t
hat it
is adequa
tely
resourced,
mai
ntain
ed, c
ommuni
cated
, and mon
itored
. Ever
y employe
e
and q
uali
ﬁed co
ntrac
tor acti
ng on beh
alf of G
SK is pe
rso
nally
responsible for ensuring
that t
hey f
ollow al
l applicable local
standard operat
ing procedures.
Our risk
-based, proactiv
e approach
is articulated
in our
glo
bal EH
S polic
y and det
aile
d in our glo
bal EH
S stan
dard
s,
aga
inst w
hich we au
dit all ou
r oper
ations to e
nsure c
ompli
ance
.
W
e ensure
hazards are appropriately
controlled
through
the
de
sign of f
acilit
ies
, equipm
ent, a
nd system
s. Th
ese ri
goro
us
pro
cedu
res
, when a
pplie
d corr
ectl
y
, put ef
fect
ive bar
rier
s in
pla
ce to prote
ct empl
oyees’ he
alth a
nd safet
y
.
In l
ate 2020 we create
d a safet
y impr
ovement p
lan to
strengthen our
corporate safety programmes, focusing on
Li
fe Saving R
ules
, Safet
y Lea
ders
hip and Ware
hous
e Safet
y
.
All s
igni
ﬁca
nt mile
stones f
or thes
e prog
ramme
s deli
vered i
n
202
1 and th
e overal
l numbe
r of signi
ﬁc
ant inc
idents t
hat have
oc
curre
d this ye
ar has r
educ
ed.
Principal risks and uncertainties
continued
E
n
vironmen
tal sus
ta
inabilit
y
Risk deﬁnition
Fai
lure in th
e manag
ement o
f:
–
Physical cli
mat
e and
environ
mental risks
;
–
Current and fu
ture regu
latory requirement
s for
environmen
tal
policies and
taxes;
–
Delivery and performance of management
environmental
objectives;
le
ading to: redu
ced su
pply ch
ain re
silie
nce; prod
uct li
fe cycle
man
ageme
nt iss
ues
, loss o
f trust
/repu
tatio
n with em
ployee
s,
invest
ors, customers, regulators and o
ther stakeholders
;
inc
rea
sed co
sts; los
s of sal
es or ma
rket ac
ces
s
; neg
ative
impacts on the
environment.
Risk impac
t
We reco
gnise t
hat the way we re
spon
d to climate ch
ange a
nd
manage en
vironmental risks
affects our abil
ity to sup
ply
pro
ducts to p
atient
s and co
nsumer
s and c
ould le
ad to har
m to
the e
nvironm
ent and o
ur repu
tatio
n. Fail
ure to mee
t fast-evo
lving
regulat
ory requirements and
stakeholder e
xpectations could
result in l
itigation
or regula
tory actions, which
may
hav
e a
material
adverse impact
on our
ﬁnancial results
and longer
term
los
s of tru
st, un
dermi
ning the c
redib
ilit
y of the c
ompany.
C
ontex
t
It i
s incre
asi
ngly und
ers
t
ood t
hat the inte
rcon
nected e
ffe
cts of
cli
mate chan
ge, natu
re los
s, and s
ocie
ty’s imp
act on bo
th are
inﬂuencing
human
health.
Intern
al and
external e
xpectatio
ns f
or
co
mpani
es to addr
ess th
eir imp
act on th
e enviro
nment a
re
inc
rea
sing, a
s are th
e eff
ects of c
limate ch
ange on o
perat
ional
re
silie
nce, in r
egar
d to acce
ss to en
ergy, water and t
he natura
l
resources used
in pro
ducts, alon
g with
pot
ential
cost in
creases
from any
regulat
ory changes or en
vironmental taxes.
GS
K Ann
ual R
epor
t 2021
285
Strategic report
Governance and remuneration
Financial statements
Investor information
Principal risks and uncertainties
continued
Environmental sustainability
continued
Miti
gati
ng
activ
ities
In N
ovembe
r 2020, GSK a
nnoun
ced a new c
ommit
ment to
have net ze
ro clim
ate impac
t and to be ne
t nature po
siti
ve by
203
0. The
se goa
ls built o
n our lon
g-term am
bitio
n, set ou
t in
201
0, to re
duce o
ur impa
ct on the e
nviron
ment.
Th
e GSK Le
ader
ship T
eam (G
L
T
) is res
pons
ible for
environm
ental sustainabi
lity gov
ernance and
risk o
versight.
It e
nsure
s there i
s an ef
fect
ive fra
mework i
n place
, and in u
se,
to man
age the r
isks ac
ross e
ach of ou
r busin
ess
es and to
deliver o
n commitments. The
GL
T
’
s
responsibilities include
appointing
dedicated
senior leaders and
resources to
provide
and m
ainta
in ris
k contr
ols and e
nsure t
hat gover
nance
pro
ces
ses a
re est
ablis
hed an
d eff
ective w
ithin t
heir bu
sine
sses
.
A dedicat
ed en
vironmen
tal sustainability en
terprise
risk plan
is in p
lace s
uppor
ted by a d
edic
ated prog
ramm
e team an
d
governance
framework
to
manage transforma
tion activit
ies.
W
e ensure
delivery of reduct
ions in
carbon emissions, energy
,
water, and wa
ste acro
ss our op
erati
ons. We have mat
ure
programmes for managing
per
f
ormance improvements
at
our
sites, and w
e include
sustainability considerations
in t
he design
of pr
oduct
s and pac
kagi
ng. We are str
ength
ening ou
r
engagement wit
h our
suppliers t
o target where
ke
y int
erventions
or supp
ort are most n
eeded.
W
e contin
ue t
o monit
or and
control
antibiotic
emissions from
man
ufact
uring ef
ﬂ
uents at a
ll GSK f
acilit
ies
, and tho
se of our
suppliers, followin
g good opera
tional practice an
d meeting
emi
ssio
n limit
s as deﬁ
ned by the A
MR A
llia
nce M
anufa
cturin
g
Fra
mework to a
sse
ss our i
mpac
t on the envi
ronme
nt.
W
e continuously re-asses
s
our business resilience to climat
e
change against
the T
ask Force on
Climat
e-related
Financial
Disclosures (TCFD)
framework g
uidelines.
Risk deﬁnition
Ri
sk in In
format
ion Sec
urit
y at GS
K is cha
racter
ised a
s the
unauthorised disclosure, theft, unav
ailability or corruption of
GS
K’s Info
rmati
on or key info
rmatio
n system
s that may le
ad to
har
m to our pati
ents
, work
forc
e and cus
tomer
s, dis
rupti
on to
our b
usine
ss and
/
or los
s of com
merc
ial or s
trategi
c advant
age,
regulat
ory sanction, or damage t
o our
reputation.
Risk impac
t
Failure t
o adequa
tely
prot
ect our in
formation,
or k
ey in
formation
syste
ms, m
a
y ca
use har
m to our pati
ents
, work
forc
e and
customers, disruption t
o our
business and/
or loss of commercial
or st
rategic a
dvant
age, re
gulator
y s
ancti
on, or d
amage to ou
r
reputation.
C
ontex
t
Th
e overall i
nform
ation se
curi
ty env
ironme
nt is cha
lleng
ing,
be
caus
e of the dif
ﬁ
cult
y of keepi
ng pace w
ith inc
rea
singl
y
sop
histi
cated cy
ber thr
eats
. This i
s due to many f
actor
s
including, t
he complexity of
large regula
ted o
rganisations
; the
well
-res
ourc
ed nature o
f hack
ing act
iviti
es; and th
e incre
asi
ng
dem
ands fo
r acco
untab
ilit
y of data h
andle
d by comp
anie
s.
Additionally
, the GSK separation is
a period o
f signiﬁcant
change which i
ncreases our risk and
requires addit
ional
vigilance. W
e
continue
to
reasse
ss
our reliance
on
inter
connectivity with t
hird party contractors, partners, and
suppliers.
Th
e COVI
D-
1
9 pa
ndemi
c conti
nues a
s anoth
er sign
iﬁc
ant
ex
terna
l factor a
ffe
cting h
ow we manag
e infor
mation s
ecuri
ty at
GSK
. CO
VID
-
1
9
-rela
ted
threats i
nclude an
increase in
ra
nsomwa
re att
acks ag
ainst t
he hea
lthca
re sec
tor
, as ha
ckers
co
ntinue to us
e the opp
or
tunit
y to disr
upt cri
tica
l heal
thcar
e
operations and,
in some
cases
,
seize
healthcare research
rel
ated to COV
ID
-
1
9 vaccin
es and t
reatme
nts.
W
e operat
e a
highly connect
ed inf
ormation n
etwork which
holds conﬁdential research and
dev
elopment, manufact
uring,
co
mmerc
ial, wo
rkf
orce a
nd ﬁnan
cial d
ata
. This me
ans th
at our
syste
ms and in
forma
tion have be
en and w
ill con
tinue to be t
he
target of
cyberattacks. We
continue
to
consolidat
e inf
ormation
syste
ms to redu
ce at
tack po
ints an
d enabl
e more fo
cuse
d
co
ntrols
. GS
K’s strate
gic app
roach to di
gita
l anal
yti
cs wil
l
further increase our dependency
on digital
assets and
distribut
ed
data. Our con
tinued
analysis
and
assessment of
our c
ritic
al dat
a ass
ets and t
he thre
ats to thos
e ass
ets will
require a
continuous
re-evalua
tion of
emerging
risks t
o GSK
.
Mi
tigati
ng actio
ns alr
eady de
ﬁned i
n thes
e area
s incl
udes th
e
secure deploymen
t and o
peration of
our resources in
high-risk
mar
kets, t
he risk p
osed b
y GSK hav
ing dat
a in the Clo
ud, an
d
the pot
ential for
complexity resulting from a
gile business-led IT
developmen
t across t
he ent
erprise.
Information
security
28
6
GS
K Ann
ual R
epor
t 2021
Principal risks and uncertainties
continued
Risk deﬁnition
Failure t
o deliv
er a
continuous
supply of
compliant
ﬁnished
pro
duct; ina
bilit
y to res
pond ef
fe
ctivel
y to a cris
is inci
dent in a
timely manner
to
recover
and sustain
critical operations.
Risk impac
t
We reco
gnise h
ow impor
t
ant the c
ontinui
ty of s
upply of o
ur
pro
ducts i
s to the pati
ents an
d consu
mers w
ho rel
y on them
.
Supply disrupt
ion can lead t
o
:
–
Product shor
tages and
product recalls
–
Regulat
ory intervention
–
Reputational
harm
–
Lo
st sal
es reven
ue
Consequently
, w
e need
sophisticated
end-t
o-end supply
chain
management with robust
crisis management and
business
co
ntinuit
y pla
ns in pla
ce to res
pond
.
C
ontex
t
We run our s
upply c
hains i
n a conti
nuall
y evolvin
g, high
ly
reg
ulated env
ironm
ent. T
here i
s no singl
e set of gl
obal
regulations
which go
verns
the manufact
ure and
distribution
of
med
icine
s and we mu
st adhe
re to the re
quire
ments in a
ll thos
e
mar
kets in wh
ich we lic
enc
e, sell
, or manu
factu
re our pr
oduct
s.
We rely up
on our in
t
er
nal Qu
alit
y Ma
nageme
nt System a
nd our
inter
nal C
ontro
l Framewo
rk to ens
ure we con
tinue to pr
eser
ve
our li
cenc
e to oper
ate.
Our c
ompl
ex end-to-
end sup
ply ch
ains of
ten invol
ve third p
ar
ty
suppliers, from Activ
e Pharmaceutical Ingredient (API)
man
ufact
urer
s and raw mate
rial s
uppli
ers th
rough to Th
ird Par
t
y
Log
istic
s Prov
ider
s and co
ntrac
t engin
eeri
ng ﬁrm
s. We embe
d
integ
rated ri
sk man
ageme
nt into our s
ourci
ng and day to day
business processes
,
alongside our
Third-Par
ty Oversight
programme.
COV
ID
-
1
9 is an exem
plar o
f events in th
e exter
nal env
ironm
ent
which result in
unforeseen, sign
iﬁcant supply challenges,
includin
g stafﬁng shortages for
essential
manufact
uring
operations, critical ra
w mat
erials supply
pressures (
e.g.
glass
vials, plastic tubing)
and int
erruptions
in dist
ribution.
Cybersecurit
y
remains a
signiﬁcant threat t
o o
ur supply
chain
ope
ratio
ns. T
he glob
al cybe
r thre
at has in
crea
sed du
ring th
e
global pandem
ic and
we
remain h
yper
-vigilan
t t
o data
security
breaches and Operational
T
echnology risks.
Miti
gati
ng
activ
ities
Risk Management:
Our supply ch
ains are se
t up
to
ensure sustainable
supply
across the GSK port
folio
of Pharmaceuticals, V
accines and
Consumer Healthcare products
.
The GSK Internal Control
Framework
drives our
approach t
o risk
management, designed
to
identify emerging ne
w risks and
support clear decision
making
.
Supply continuity
Information security
continued
Miti
gati
ng
activ
ities
We have a dedi
cated tea
m and pr
ogram o
f activ
ity t
hat supp
or
ts
our gl
obal i
nform
ation se
curi
ty pol
icy and a
ccom
panyi
ng IT
standards and
processes. The GSK T
echnolog
y
, Sec
urity and
Risk function pro
vides strat
egy
,
direction, and
ov
ersight and
we have mir
rore
d thes
e funct
ions in N
ew CH in re
adine
ss for
separation. This i
ncludes activ
e monit
oring of
cybersecurity,
while enh
ancing o
ur global
info
rmation
security capabilities
thro
ugh an on
going p
rogr
amme of i
nvestme
nt. We conti
nue to
make
signiﬁcant in
vestment
s in
mitigat
ion activit
ies, which w
e
wil
l conti
nue to advan
ce in th
e comin
g year:
–
Modernising cyber operatio
ns with
consistent
eval
uation o
f
our s
ecuri
ty so
lutio
ns and de
ploym
ent of be
st of cla
ss cy
ber
security technology t
o en
sure the
timely de
tection
and
response t
o inf
ormation
security incident
s, with particular
focus on
ransomware
preparation and
aw
areness.
–
Modernising c
yber secu
rity within
manufact
uring
and R
&D
site
s to addre
ss th
e age, co
mplex
ity, and gl
obal fo
otpri
nt of
those environment
s.
–
Opt
imisi
ng secu
rit
y archi
tectur
e to mitig
ate the ris
k of data
loss intenti
onally or unintentionall
y
, im
plementing a cloud
se
curit
y str
ategy and e
nsur
ing new so
lution d
evelop
ment
inc
lude
s secur
ity by d
esig
n. We are als
o conti
nuing to
remediate
and improv
e the
control en
vironment for
privileged
or el
evated use
r right
s acros
s our sys
tems.
–
T
rans
ferri
ng third p
ar
ty ri
sk man
ageme
nt to a manag
ed
ser
vice
partner
. This
organisatio
n will
process our crit
ical and
sen
sitive i
nform
ation a
nd supp
ort
s the sol
ution th
at will e
nable
us to move a
ll third p
ar
ties th
at acc
ess ou
r IT re
sourc
es
remotely via
a more secure
environment.
–
Ena
bling b
usine
ss pe
rfo
rman
ce in hig
h risk m
arkets by
asse
ssing data and
information originatin
g in, and ﬂowing
to,
interna
tional mark
ets where
local laws
and norms
represent a
height
ened risk
to
the conﬁdent
iality
, in
tegrity
,
and a
vail
ability
of our
operational
systems.
GS
K Ann
ual R
epor
t 2021
287
Strategic report
Governance and remuneration
Financial statements
Investor information
Principal risks and uncertainties
continued
Supply continuity
continued
Each supply chain
manages their
risk o
versight t
hrough a
hierarchy of
Risk Management and
Compliance Boards t
o
assure risk mitigat
ion (incl
uding iden
tifying new and
emerging
t
hr
e
a
t
s).
Inventory Management:
Sup
ply cha
in gover
nanc
e commi
ttee
s withi
n each B
usin
ess
Uni
t clos
ely mon
itor the inve
ntor
y status a
nd deli
ver
y of our
products
.
Our core commercial c
ycle l
inks the
supply chain
forecasting
with our
commercial ambition
and designed t
o reduce
the risk
of demand
ﬂuctuations
and manag
e tem
porar
y
shortages in
supply
.
We peri
odic
ally rev
iew eac
h node of o
ur supp
ly chai
ns to
ens
ure we hol
d adequ
ate safet
y stoc
ks, wh
ilst ba
lanc
ing
working capital. W
e par
ticu
lar emphasis
on mit
igating
supply
risks associated
with
medically critical, h
igh-rev
enue
products
and n
ew produ
ct laun
ches
, e.g. u
sing du
al sour
cing fo
r key
pro
ducts o
r API
s. We use th
e month
ly Per
form
ance
Management Proces
s
across the supply
chains to
monitor
bus
ines
s acti
vit
y and high
light ad
vers
e trend
s in supp
ly
,
operations, budget, and w
orkforce capabilit
y
.
Business continuity:
Cr
isis ma
nagem
ent and b
usine
ss c
ontinui
ty pl
ans are i
n plac
e
across Pharmaceutic
als, V
accine
s
and Consumer Healthcare,
whi
ch incl
ude aut
horis
ed re
spons
e and re
cover
y str
ategie
s, key
areas of responsibi
lity and clear
communicat
ion rout
es. Supply
chains regularly
use Business Continuity Plans t
o mana
ge
potent
ial supply
disruptions. Our
manufacturing
sites
hav
e crisis
management plans
in pla
ce test
ed annually
where there
is no
oc
curre
nce of d
eploym
ent to ens
ure mai
ntenanc
e of sk
ills in
crisis management.
Risk deﬁnition
Failure t
o deliv
er the
plan f
or successful transformation
and
sep
arati
on of GS
K into two n
ew
, lead
ing com
pani
es: one
BioPharma and one Consumer Healthcare.
Risk impac
t
Th
e failur
e to manag
e the mac
ro level ri
sk due to C
OVID
-
1
9 and
a highly
competitive
labour mark
et, in
relation
to
the deliv
ery of
the separation
plan, could
mat
erially and adv
ersely affect our
abi
lity to d
eliver G
SK
’
s stra
tegy and l
ong-ter
m prior
itie
s.
C
ontex
t
In F
ebru
ar
y 2020, GSK a
nnoun
ced a new ‘
Futur
e Ready
’
programme t
o prepare f
or its
separation int
o two
companies:
new GS
K
, a phar
ma com
pany wit
h an R&D a
pproa
ch focu
sed
on sc
ienc
e relate
d to the immu
ne system
, the us
e of genet
ics
and n
ew techno
logie
s; and a new le
ader i
n consu
mer
he
althc
are. A
s GSK i
ncre
ase
s investm
ent in R&
D and new
product launches, the
two-year separat
ion programme aims
to
dri
ve a comm
on app
roach to in
novation w
ith imp
roved c
apita
l
all
ocati
on
; to ali
gn and im
prove the c
apab
ilitie
s and ef
ﬁc
ienc
ies
of glo
bal su
ppor
t fun
ction
s t
o sup
por
t new GS
K; to fur
ther
opti
mise th
e suppl
y chain a
nd por
t
folio, i
ncludi
ng dive
sting
non-core assets;
and t
o prepare
Consumer Healthcare to
operate as a
standalone company
.
Once complete, the
outlook
of bo
th compan
ies wil
l ha
ve
been fu
ndamentally
stren
gthened,
mak
ing th
em more e
fﬁ
cien
t, mod
ern, a
nd automa
t
ed
, with sk
ills
and c
apa
biliti
es that w
ill ser
ve the
m into the fu
ture.
Miti
gati
ng
activ
ities
Th
e Future Re
ady O
f
ﬁce (F
RO
), est
ablis
hed in th
e four
th
qua
rte
r of 20
1
9, i
s acco
untab
le for mo
nitori
ng the pro
gres
s,
per
fo
rmanc
e and ri
sks a
ssoc
iated wi
th cre
ating the t
wo new
co
mpani
es. I
t repo
rt
s monthl
y to the GS
K Leade
rsh
ip T
e
am
(GL
T) to ens
ure the
re is ente
rpri
se overs
ight of th
e plan
, using
key per
for
manc
e and ri
sk indi
cator
s whic
h track p
rogr
amme
resource, programme deliv
ery, talent
ret
ention, recruitm
ent,
and o
nboa
rding to ad
dres
s COVI
D and l
abour m
arket
cha
lleng
es. I
n addi
tion, G
SK
’
s Chie
f Exe
cutive O
f
ﬁce
r (
CEO)
,
Chi
ef Fin
ancia
l Of
ﬁc
er
, Chie
f Strateg
y Of
ﬁc
er and H
ead of F
RO
mee
t the lea
ders o
f Cons
umer H
ealt
hcar
e to gather i
nput an
d
app
roval of key de
sign c
hoic
es for th
at new com
pany. Overa
ll,
the balance between
transformation
and separation
is upheld
through clear gov
ernance, joint coordination between new GSK
and Consumer Healthcare, rigorous progress tracking and the
setting of
clear paramet
ers.
Th
e GSK B
oard is r
egula
rly in
forme
d of the Fut
ure Rea
dy
programme lead indicators t
hrough the
CEO Board Report
at ea
ch Boa
rd meet
ing. At Bo
ard leve
l, a T
r
ansf
ormati
on and
Separation Committee supports and advises
management’
s
work o
n tran
sform
ing and s
epar
ating the G
roup
. This c
ommit
tee
is ch
aire
d by the GS
K Chai
rman a
nd inclu
des ou
r Senio
r
In
depen
dent D
irecto
r and the C
hair
s of the Aud
it & Ris
k,
Remunerat
ion and
Corporate
Responsibility Committees.
T
rans
f
ormation and separation
28
8
GS
K Ann
ual R
epor
t 2021
Det
ails of o
ur iss
ued sh
are ca
pita
l and the n
umber o
f share
s
hel
d in T
r
eas
ury a
s at 3
1 Dec
embe
r 202
1 can be f
ound in
Note 3
6 t
o the ﬁ
nanci
al sta
tements
, ‘Sh
are ca
pita
l and sh
are
premium account
’
.
Our O
rdin
ar
y Share
s are li
sted on th
e Londo
n Stock E
xcha
nge
(LS
E) an
d are al
so quoted o
n the New Y
ork Stoc
k Exc
hange
(NYSE
) in the fo
rm of Am
eric
an De
posi
tar
y Sha
res (A
DS). Each
AD
S repre
sent
s two Or
dinar
y Sh
ares
. For d
etail
s of liste
d debt
and w
here i
t is liste
d refer to N
ote 29 to the ﬁna
ncia
l statem
ents,
‘Net debt
’
.
Ho
lder
s of Ordi
nar
y Shar
es and A
DS ar
e entitl
ed to rec
eive
dividends (
when declared) and
the
company’
s
Annual R
eport.
Th
ey are als
o entit
led to atte
nd, sp
eak
, appo
int prox
ies an
d
exercise v
otin
g rights
at gen
eral meetings
of th
e company
.
There are no
restrictions on
the transfer
, or limitat
ions on
the
hol
ding, o
f Ordin
ar
y Shar
es and A
DS and n
o requir
ement
s
to obt
ain app
roval pr
ior to any tr
ansfe
rs. N
o Ordi
nar
y Sha
res
or A
DS car
ry a
ny spec
ial ri
ghts wi
th rega
rd to con
trol of th
e
co
mpany an
d there a
re no re
stric
tions o
n voting ri
ghts
. Maj
or
sha
reho
lder
s have the sa
me voting r
ights p
er shar
e as al
l other
shareholders. There are no known
arrangements under
which
ﬁna
ncia
l right
s are hel
d by a per
son othe
r than th
e holde
r of
the s
hare
s and no k
nown agr
eeme
nts on re
stri
ction
s on shar
e
tra
nsfer
s or on voti
ng righ
ts.
Sha
res ac
quire
d throu
gh the Gr
oup’
s emp
loyee sha
re pla
ns
ra
nk equa
lly wit
h the othe
r share
s in is
sue and h
ave no spec
ial
rig
hts. T
he tru
stees of o
ur Empl
oyee Sha
re Ow
ners
hip Pl
an
tru
sts have wai
ved thei
r right
s to divid
ends o
n share
s held by
those t
rusts.
E
x
change controls and
other limitations
af
fecting holders
Ot
her tha
n cer
tai
n econ
omic s
ancti
ons, w
hich may b
e in
force from
time t
o tim
e, there
are currently
no applicable
laws,
dec
ree
s or regu
lations i
n forc
e in the U
K restr
icti
ng the imp
or
t
or ex
por
t of cap
ital o
r res
trict
ing the re
mit
tanc
e of divi
dend
s or
othe
r payme
nts to hold
ers of th
e comp
any’s shar
es who a
re
non-residents of
the
UK
. Simi
larly
, ot
her than
cer
tain
economic
sa
nctio
ns whic
h may be in fo
rce fr
om time to ti
me, the
re are no
limitations
relating
only
to n
on-residents of
the UK u
nder English
law or th
e comp
any’s Ar
ticl
es of As
soc
iation o
n the rig
ht to be a
hol
der of, an
d to v
ote in re
spe
ct of, the c
ompany
’
s shar
es.
Interest
s in v
oting rights
Ot
her tha
n as st
ated below, as f
ar as we ar
e aware, t
here ar
e
no pe
rson
s with si
gniﬁ
cant d
irec
t or indir
ect ho
lding
s in the
company
.
Information
provided t
o t
he company
pursuant t
o
the Fin
ancial Conduct
Auth
ority’
s Disclosure
Guidance
and
T
ransp
aren
cy Rule
s (DTR 5
) is pub
lish
ed on a Reg
ulator
y
Information Service and on t
he company’
s website,
w
ww
.gsk.com.
Th
e compa
ny has r
ecei
ved noti
ﬁcati
ons in ac
cor
danc
e with
DTR 5 of th
e follow
ing noti
ﬁab
le intere
sts in th
e voting r
ights in
the compan
y’
s issued
share capital
:
31 December 2021
27 February 2022
No. of
voting rights
Percentage
of total voting
rights
(1)
No. of
voting rights
Percentage
of total voting
rights
(1)
BlackRoc
k, Inc
332,238,28
9
(2)
6.40%
332,23
8,289
6.40%
Dodge & Cox
253,46
4,1
08
(3)
5.04%
253,4
64,1
08
5.04%
(1)
Percentage of total voting rights at the date of notiﬁcation to the company.
(
2)
Comprising an indirect interest in 329,124,5
08 Ordinary Shares and a
holding of 3,113,
781
Qualifying Financial Instruments (Contract for
Difference).
(3)
Comprising an indirect interest in 99,37
7
,8
7
4 Ordinary Shares and
154,0
86,234 American Deposit
ary Shares.
Th
e compa
ny has no
t acqui
red or di
spos
ed of any in
t
ere
sts
in it
s own sha
res dur
ing the p
erio
d under r
eview.
Share buy-back pro
gramme
Th
e Boar
d has be
en auth
oris
ed to iss
ue and al
lot Ord
inar
y
Sha
res un
der Ar
tic
le 9 of the c
ompa
ny’
s Ar
tic
les of A
sso
ciatio
n.
Th
e power und
er Ar
ticl
e 9 and the a
uthor
ity fo
r the co
mpany to
make pu
rchases of its
own shares are
subject t
o shareholder
auth
oriti
es wh
ich are s
ought o
n an annu
al bas
is at our A
nnual
Ge
nera
l Meet
ing (AGM
). Any sha
res pur
chas
ed by the
co
mpany may b
e canc
elle
d, held a
s T
r
eas
ury s
hare
s or
use
d for sat
isf
ying s
hare op
tions a
nd gran
ts unde
r the Gro
up'
s
employee
share plans.
Our programme co
vers purchases of
shares for
cancellation
or to be h
eld as T
rea
sur
y sha
res
, in acc
orda
nce wi
th the
auth
orit
y ren
ewed by sha
rehol
ders at t
he AGM in M
ay 202
1
,
whe
n the co
mpany wa
s autho
rise
d to purcha
se a ma
xi
mum
of jus
t unde
r 503 mill
ion sha
res
. Deta
ils of sh
ares p
urcha
sed
,
cancelled, held as T
reasur
y shares
and subsequently
transferred from T
reasur
y
to
satisfy awards
under the
Group
’
s
emp
loyee sh
are pla
ns are di
sclo
sed in N
ote 36 to the ﬁn
anci
al
statemen
ts, ‘Share capital
and share
premium
account’
.
In determin
ing speciﬁc share repu
rchase level
s, the compan
y
co
nside
rs the d
evelopm
ent of fr
ee ca
sh ﬂow dur
ing the ye
ar
.
No s
hare
s have been p
urcha
sed s
ince 201
4.
Th
e compa
ny conﬁ
rms th
at it doe
s not cur
rentl
y intend to ma
ke
any ma
rket pur
chas
es in 2022. T
he com
pany wil
l review th
e
poten
tial fo
r future s
hare bu
y-ba
cks in lin
e with it
s usua
l annua
l
cycl
e and sub
ject to re
turn an
d rating
s crite
ria
.
Shar
eholder information
Share capit
al a
nd control
GS
K Ann
ual R
epor
t 2021
289
Strategic report
Governance and remuneration
Financial statements
Investor information
Nat
ure of tra
ding market
Th
e followi
ng tab
le sets ou
t, for th
e peri
ods ind
icated
, the hig
h and low mi
ddle ma
rket cl
osing p
rice
s for the c
ompa
ny’
s Or
dinar
y
Sha
res on t
he LSE a
nd for the A
DS on th
e NYSE
.
Ordinary Shar
es
ADS
U
K£ per share
US$ per share
High
Low
High
Low
February 2022*
16
.
5
0
15
.
0
5
45.7
0
41.19
January 2022
17
.
0
8
15
.
8
9
4
6.82
4
3.
37
December 2021
16.19
15
.
3
4
44.44
41
.
2
5
November 2021
15
.
9
3
1
5
.
11
45.
53
41.
0
2
October 2021
15
.
0
9
13
.
8
0
42.33
3
8
.13
September 2021
14
.
8
8
13
.
8
3
41
.
61
38.05
Quarter ended 31 December 2021
16
.19
13
.
8
0
44.44
3
8
.1
3
Quarter ended 30 September 2021
15
.
2
6
13
.
8
3
4
2.33
38.05
Quarter ended 30 June 2021
14
.
3
6
12
.
78
40.66
3
5.82
Quarter ended 31 March 2021
14
.14
11
.
9
1
39
.24
3
3.
61
Quarter ended 31 December 2020
14
.
6
8
12
.
9
2
3
9
.
17
3
3
.42
Quarter ended 30 September 2020
16
.
6
0
14
.
3
5
42
.16
3
7.
3
8
Quarter ended 30 June 2020
17.
4
2
14
.
8
9
4
2
.
74
3
7
.14
Quarter ended 31 March 2020
18
.
4
6
13
.7
5
4
7.
8
9
31.
8
5
Y
ear ended 31 December 2020
14
.
6
8
12
.
9
2
3
9
.17
3
3.
42
Y
ear ended 31 December 2019
18
.19
14
.
3
6
47.
3
2
3
7.
8
3
Y
ear ended 31 December 2018
16
.
2
2
12
.
4
3
4
1.94
35
.49
Y
ear ended 31 December 201
7
17.
2
2
12
.
7
6
4
4.
37
3
4.66
*
to 27 Feb
rua
ry 2
022
Share capital and control
continued
Market capit
alisation
The market
capitalisation, based on shares
in issue ex
cluding
T
reas
ur
y share
s, of G
SK at 31 Dece
mber 2021 was £
8
1 billi
on.
At that d
ate, GS
K was the 6t
h large
st co
mpany by ma
rket
capitalisation in t
he FTS
E
index.
Sha
re price
2021
£
2020
£
20
19
£
At 1 January
13
.
4
2
17
.
7
9
14
.
9
1
At 31 December
1
6.0
7
1
3.42
17.
7
9
Increase/(decrease)
20%
(24.6)%
19.3%
High during the year
1
6.1
9
18.46
18.19
Low during the year
1
1.91
1
2.92
14.36
Th
e table a
bove set
s out the mi
ddle ma
rket cl
osing p
rice
s.
Th
e compa
ny’s share p
ric
e incre
ase
d by 20% in 2021
. T
his
co
mpare
s with a
n incre
ase i
n the F
TSE 100 ind
ex of 1
4%
dur
ing the ye
ar
. The mi
ddle ma
rket cl
osing s
hare p
rice o
n
27 Febr
uar
y 2022 was £1
5
.64.
15
14
13
12
09
UK£
US$
UK
share pr
ice (UK£)
US
ADS pr
ice (US$)
31/12/18
31/12/19
31/12/20
31/12/21
11
16
17
18
30
35
40
45
50
55
60
65
70
75
19
80
Shareholder information
continued
Sha
re price t
rend in th
e three ye
ars ende
d
31
December 2021
29
0
GS
K Ann
ual R
epor
t 2021
Analysi
s of shareho
lding
s at 3
1 December 2021
Number of
accounts
% of total
accounts
% of total
shares
Number of
shares
Holding of shares
Up to 1,000
69,334
71.06
0.4
4
23,44
4,8
70
1,00
1 to 5,000
21,8
7
2
22.41
0.8
8
4
7
,264,152
5,00
1 to 1
00,000
5,220
5.35
1.5
0
80,
804,
464
1
00,00
1 to 1,000,000
776
0.80
5.04
271,429,821
Over 1,000,000
368
0.3
8
92.14
4,96
4,0
71,
752
97
,
570
1
00.00
1
00.00
5,3
8
7
,0
15,059
Held by
Institutional and Corporate holders
2,
723
2
.7
9
61.96
3,337
,598,97
6
Individuals and other corporate bodies
9
4,845
97
.21
13.55
7
29,
77
3,0
41
Guaranty Nominees Limited
1
0.00
1
7.
9
0
96
4,43
7
,092
Held as T
reasury shares by GlaxoSmithKline
1
0.00
6.59
355,205,950
J.
P
. Mo
rgan C
hase B
ank
, N.
A
. is the D
epo
sita
ry fo
r the com
pany’s Am
eric
an Dep
osito
ry Re
ceip
t (ADR
) progr
amme
. The
co
mpany’s AD
S are lis
ted on the N
YSE
. Ordi
nar
y Shar
es rep
rese
nting th
e comp
any’s ADR p
rogra
mme, w
hich i
s manag
ed by the
De
posit
ar
y
, are re
giste
red in th
e name of G
uara
nty N
omine
es Lim
ited. At 27 Feb
ruar
y 2022, G
uara
nty N
omine
es Lim
ited hel
d
994
,31
4,7
54 Or
dinar
y Sh
ares r
epre
senti
ng 1
9.
56% of th
e issu
ed sha
re cap
ital (exclud
ing T
reas
ur
y share
s
) at that date
.
At 27 Febr
uar
y 2022, the nu
mber of h
older
s of Or
dinar
y Sh
ares i
n the US wa
s 939 wi
th holdi
ngs of 91
5,
26
1 Ordi
nar
y Shar
es, a
nd
the nu
mber of r
egis
t
ere
d hold
ers of A
DS was 1
8,627 wit
h holdi
ngs of 497
,
1
5
7
,377 ADS
. Cer
t
ain of the
se Or
dinar
y Sh
ares a
nd
AD
S were hel
d by broke
rs or oth
er nomi
nees
. As a re
sult, t
he numb
er of hol
ders of r
eco
rd or reg
istere
d hold
ers in th
e US is not
rep
rese
ntati
ve of the num
ber of be
neﬁc
ial ho
lder
s or of the re
side
nce of b
eneﬁ
cial h
older
s.
Th
e compa
ny pays div
idend
s quar
ter
ly and c
ontinue
s to retur
n
cash to sh
areholders thr
ough its
dividend
policy
. Dividends
remain an essential
component of
total
shareholder ret
urn and
GSK recognises the importance of dividends
to
shareholders.
The company
aims t
o
distribut
e regu
lar dividend
paymen
ts t
hat
wil
l be deter
mined p
rima
rily wi
th refe
renc
e t
o the f
ree ca
sh ﬂow
gen
erated by t
he busi
ness a
fter f
unding t
he invest
ment
nec
ess
ar
y to supp
or
t the Gro
up’
s futur
e grow
th.
Dividends per share
Th
e table b
elow se
ts out the d
ivid
end per s
hare a
nd per A
DS
for th
e last ﬁ
ve year
s. T
he divi
dend p
er ADS i
s trans
lated into
US do
llar
s at appl
icab
le excha
nge rate
s.
Y
ear
pence
U
S$
2021
80
–*
2020
80
2.09
20
19
80
1.9
8
20
18
80
2.0
8
2
017
80
2.16
*
The Q4 2021 ordinary dividend receivable by ADS holders will be calculated based on
the exchange rate on 7 April 2022. An annual fee of $0.03 per ADS (or $0.00
75 per
ADS per quarter) will be charged by the Depository
. The cumulative dividend receivable
by ADS holders for Q1, Q2 and Q3 2021 was $1.5
6.
On 23 J
une 202
1
, at the new GS
K Inves
tor Upd
ate, GS
K
set o
ut that fr
om 2022 a progr
ess
ive div
idend p
olicy w
ill be
imp
lemen
ted for new G
SK
. The di
vide
nd poli
cy
, the tota
l
exp
ected c
ash di
stri
butio
n, and th
e resp
ecti
ve divid
end pay-
out
rati
os for new G
SK an
d new Con
sumer H
eal
thca
re rema
in
unc
hange
d. GS
K expec
ts to dec
lare a 27
p per s
hare di
vide
nd
payab
le by the cu
rrent g
roup for t
he ﬁrs
t half. T
his co
mpris
es
22 pen
ce per s
hare fo
r new GSK a
nd 5 pen
ce per s
hare
representing Consumer Healthcare du
ring the
ﬁrst half whilst
par
t of th
e group
. For the s
econ
d half of 2022
, new GSK
co
ntinue
s to expec
t to decl
are a 22p per s
hare di
vide
nd. As
prev
ious
ly comm
unic
ated, new G
SK woul
d expec
t to decl
are
a div
idend o
f 45 pen
ce per s
hare fo
r 2023.
Fol
lowing s
epar
ation
, the div
idend p
olicy fo
r the new C
onsum
er
He
althc
are c
ompa
n
y wil
l be the re
spon
sibili
ty of i
ts Boa
rd of
Dir
ector
s and is e
xpec
ted to be gui
ded by a 30 to 50 p
er cent
pay-
out rati
o. On thi
s bas
is, we now ex
pec
t a seco
nd-ha
lf
dividend from
the ne
w Consumer Healthcare company
equ
ivale
nt to a payout of ar
ound 3 pe
nce pe
r shar
e, subj
ect
to its B
oard’s de
cisio
ns on the i
ntra-ye
ar pha
sing of d
ivide
nd
paym
ents
. This ex
pecte
d distr
ibuti
on per s
hare for t
he sec
ond
hal
f of the yea
r has b
een adj
usted f
rom that hi
ghlig
hted at the
GS
K Inves
tor Upda
te in June 2021 to reﬂe
ct the tot
al numb
er
of sh
ares (up to circ
a 9.25 b
illion s
hare
s
) in the new C
onsu
mer
He
althc
are c
ompa
n
y that a
re expe
cted to be i
n issu
e upon
dem
erge
r
. I
n June 2021 the pl
annin
g assu
mptio
n for the
Inve
stor Up
date reﬂ
ected o
nly the GS
K sha
res in i
ssue at
that ti
me (
circ
a 5 billi
on sha
res).
Dividends
Shareholder information
continued
GS
K Ann
ual R
epor
t 2021
291
Strategic report
Governance and remuneration
Financial statements
Investor information
Event
Date
Quarter 1 Results announcement
27 April 2022
Annual General Meeting
4 May 2022
Quarter 2 Results announcement
2
7 July 2022
Quarter 3 Results announcement
2 November 2022
Preliminary/Quarter 4 Results announcement
1 F
ebruary 2023
Annual Report publication
February/March 2023
Annual Report distribution
March 2023
In
formati
on abo
ut the co
mpany, incl
uding th
e shar
e and AD
S
price, is a
vailable o
n our
website
at
w
ww
.gsk.com. Information
mad
e availab
le on the we
bsite do
es not c
onsti
tute par
t of thi
s
Annual Repor
t.
Results announcements
Res
ults an
nounc
ement
s are is
sued to th
e LSE a
nd are avai
lable
on it
s news ser
vi
ce. T
hey are a
lso sen
t to the US Se
curit
ies an
d
E
xchan
ge Co
mmis
sion (SEC) and th
e NYSE
, iss
ued to the
media and ma
de a
vailable o
n our
website.
Financial
reports
The company
publishes an Ann
ual Report which is made
avai
lable on o
ur websit
e from
the da
te
of publ
ication.
Shareholders may
elect t
o receive
notiﬁcation b
y email
of the
publication
of Annual
Reports by regist
ering on
w
w
w
.sha
review.co
.uk, a
nd may als
o elec
t to rece
ive a
pri
nted copy o
f the An
nual Rep
or
t by cont
actin
g our reg
istra
r
,
Equiniti Limited
.
Copies of previous
Annual Reports are a
vailable
on our
websit
e.
Printed
copies can
also be
obtained
from
our r
egistrar
(
see
pag
e 294 for the c
onta
ct deta
ils).
Our A
nnua
l Gene
ral M
eeting (
AGM) wi
ll be hel
d at 2.3
0pm
(U
K time
) on Wedne
sday, 4 May 2022 at the So
ﬁtel Lo
ndon
He
athrow, T
er
mina
l 5, Lond
on He
athrow Ai
rpor
t, T
W6 2G
D
and w
ill als
o be bro
adca
st live fo
r you to join e
lectr
onic
ally.
Th
e A
GM i
s the com
pany’s pri
ncipa
l forum fo
r comm
unic
ation
wit
h private s
hare
holde
rs. I
n addi
tion to the fo
rmal AG
M
bus
ines
s, the
re will b
e a pre
sentat
ion by the C
EO on the
per
fo
rmanc
e of the G
roup an
d its futu
re devel
opment
. The
re
wil
l be an opp
or
tunit
y for que
stio
ns to be as
ked of the B
oard
.
Cha
irs of t
he Boa
rd’s Comm
itte
es and th
e W
ork
forc
e
Eng
ageme
nt Dir
ector wi
ll be avail
able to ta
ke ques
tions
relating t
o their
roles.
Fur
the
r detai
ls on how to ac
ces
s the AGM e
lectr
onic
ally or
at
tend in pe
rson
, ask qu
esti
ons and vote
, can b
e found in th
e
noti
ce of An
nual G
ener
al Mee
ting 2022 (AGM N
otic
e
) w
hich i
s
avai
lable on o
ur websit
e a
t ww
w
.gsk.com.
Inve
stors h
oldin
g share
s throu
gh a nomi
nee ser
vi
ce sho
uld
ar
range w
ith that n
omine
e ser
vic
e for the
m t
o be ap
pointe
d as a
prox
y in r
espe
ct of the
ir shar
ehol
ding in or
der to at
tend and vote
at the
meeting electronically
.
ADS holders wishing to
attend
the meeting
electronically should
refe
r to the AGM N
otice fo
r deta
ils on how to re
ques
t a prox
y
app
ointm
ent fro
m the Dep
osit
ar
y
, J.P
. Morg
an Cha
se Ba
nk N.
A
.
Thi
s will en
able th
em to atte
nd, as
k ques
tions a
nd vote, all
ele
ctron
ica
lly
, on the b
usine
ss to be tr
ans
acted at th
e meeti
ng.
AD
S holde
rs ar
e remin
ded that i
f they do not i
nstru
ct the
De
posit
ar
y as to the way i
n which t
he shar
es re
pres
ented
by the
ir ADS s
hould b
e voted by com
pletin
g and retu
rning
the v
otin
g card pro
vided b
y the
Depositary,
their
shares
wil
l not be voted
.
Documents on displa
y
Th
e Ar
ticle
s of As
soci
ation of th
e comp
any and D
irec
t
or
s
’
ser
vice
contracts
or
,
where appl
icable, letters o
f appoin
tment
bet
ween D
irec
tors an
d the co
mpany or a
ny of its sub
sidi
arie
s
(and any si
de let
ters re
lating to s
everan
ce term
s and pe
nsion
arrangements
) are av
ailable f
or inspect
ion at
the
company’
s
registered o
fﬁ
ce an
d will
be made a
vailable
for
inspection a
t
th
e AG
M.
Annual General Meeting 2022
Financial
calendar 2022
Shareholder information
continued
Dividends
continued
In a
ggreg
ate, this wo
uld rep
rese
nt on the fu
ll year 2022 ba
sis
the e
quival
ent of a Gr
oup div
iden
d of aroun
d 5
2p per s
hare
.
Dividends pay
able by
Consumer Healthcare will
only be
receivable by
shareholders who remain
inv
ested in
Consumer
Healthcare post-separat
ion and a
t the
appropriat
e record da
tes.
Det
ails of t
he divi
dend
s decla
red, t
he amou
nts and th
e payme
nt
date
s are give
n in Note 1
6 to the ﬁna
ncia
l statem
ents
,
‘Dividends’
.
2022 Dividend calendar
Quarter
Ex-dividend date
Record date
Payment date
Q4 2021
24 February 2022
25 February 2022
7 April 2022
Q1 2022
19 May 2022
20 May 2022
7 July 2022
Q2 2022
18 August 2022
19 August 2022
6 October 2022
Q3 2022
1
7 November 2022
18 November 2022
12 January 2023
Q4 2022
23 February 2023
24 February 2023
13 April 2023
29
2
GS
K Ann
ual R
epor
t 2021
A sum
mar
y of cer
t
ain UK t
ax a
nd US fe
dera
l incom
e ta
x
co
nsequ
ence
s for hol
ders o
f share
s and A
DS who a
re citi
zens
of the U
K or the U
S is set o
ut below. It i
s not a com
plete
ana
lysis o
f all the p
ossi
ble ta
x co
nseq
uence
s of the pu
rcha
se,
owne
rshi
p or sa
le of the
se sec
uriti
es. I
t is inten
ded onl
y as a
general guide.
Holders are advised t
o consult
their
advisers with
re
spec
t to the ta
x con
seque
nce
s of the pur
chas
e, owne
rshi
p or
sa
le of thei
r shar
es or AD
S and th
e conse
quenc
es un
der st
ate
and l
oca
l ta
x laws in the U
S and the i
mplic
ation
s of the cur
rent
UK
/
US ta
x co
nventio
ns.
US ho
lder
s of ADS g
ener
ally wi
ll be tre
ated as th
e owner
s of
the un
derl
ying sh
ares f
or the pur
pose
s of the cu
rrent U
K
/U
S
double taxation conv
entions
relatin
g t
o income and
gains
(I
ncome T
a
x Conve
ntion), esta
te and gif
t ta
xes (E
state a
nd Gif
t
T
a
x C
onventi
on
), and for t
he purp
oses o
f the Inte
rnal R
evenue
Co
de of 1
986, a
s ame
nded.
UK shareholders
This summary only applies t
o a
UK resident shareholder
that
hol
ds sha
res as c
api
tal as
sets
.
T
axation of dividends
For t
he 202
1
/22 UK t
a
x year, UK re
siden
t indiv
idual
s are ent
itled
to a div
idend t
ax a
llowan
ce of up to £2
,000
, so that th
e ﬁrs
t
£2,
000 of d
ivid
ends re
cei
ved in a ta
x yea
r will be f
ree of t
ax
.
Di
vide
nds in exc
ess of t
his all
owance w
ill be ta
xe
d at 7
.5% fo
r
ba
sic rate t
ax
payers
, 32.5
% for high
er rate ta
xp
ayers an
d 38.
1
%
for ad
ditio
nal rate t
ax
payers
. Note th
at from A
pril 2022 ta
x on
div
idend i
ncom
e will in
crea
se by 1
.25% to he
lp supp
ort t
he
NH
S and so
cial c
are.
UK resident shareholders tha
t are corporatio
n taxpayers should
not
e tha
t dividends
pa
yable o
n ordinary shares are
generally
entitled t
o e
xempt
ion from corporat
ion tax
.
T
a
x
ation of capit
al gains
UK r
esid
ent sh
areho
lder
s may be lia
ble for U
K ta
x on ga
ins on
the di
spos
al of sh
ares o
r ADS
.
For d
ispo
sals by i
ndivi
dual
s in the 2021
/22 UK t
ax ye
ar
, a
ta
xab
le ca
pita
l gain ac
crui
ng on a dis
posa
l of sha
res or A
DS
wil
l be ta
xed at 1
0% fo
r basi
c rate ta
xp
a
yer
s, or 20
% if, af
ter
all allo
wable deductio
ns, the in
dividual’
s taxable income for
the ye
ar exce
eds the b
asic r
ate inco
me ta
x ban
ding. N
ote this is
foll
owing th
e use of any exe
mptio
ns availa
ble to the in
divid
ual
ta
xp
a
yer su
ch as th
e annua
l exempt am
ount.
Co
rpor
ation t
ax
payers m
ay be enti
tled to an i
ndexati
on
all
owance w
hich a
pplie
s to reduc
e cap
ital g
ains to the e
xten
t
that su
ch gains
arise due t
o inﬂat
ion. Indexat
ion allo
wance ma
y
red
uce a ch
arge
able g
ain but w
ill not cr
eate an al
lowabl
e loss
.
For a
sse
ts acqu
ired on o
r befor
e 1 Janua
ry 201
8, leg
islati
on in
the F
inanc
e Act 201
8 f
reeze
s the level o
f indexat
ion all
owance
that i
s given in c
alcu
lating a c
ompa
ny’
s cha
rgea
ble ga
ins at the
valu
e that woul
d apply to th
e disp
osal o
f an as
set in De
cem
ber
201
7
. For as
sets a
cquir
ed fro
m 1 Janua
ry 201
8 o
nwards
,
leg
islati
on in the F
inan
ce Act 201
8 r
emoves a
ny index
ation
allow
ance on
disposal.
Inheritanc
e
ta
x
Individual (UK
-domiciled
or ot
herw
ise
) shareholders may
be
lia
ble to UK i
nheri
tanc
e ta
x on the tr
ans
fer of sha
res or A
DS.
T
a
x may b
e char
ged on th
e amount by w
hich th
e value of t
he
sha
reho
lder’s es
tate is re
duce
d as a re
sult of a
ny trans
fer by
way of li
fetime gi
ft o
r other di
spos
al at le
ss tha
n full mar
ket
valu
e. In th
e cas
e of a bequ
est on d
eath, t
ax m
ay be cha
rged on
the va
lue of the s
hare
s at the date of t
he shar
ehol
der’s deat
h.
If s
uch a gif
t or ot
her dis
posa
l were su
bject to b
oth UK
inh
erit
ance t
ax a
nd US es
tate or gi
ft t
ax
, the Es
tate and G
if
t T
a
x
Co
nventio
n would ge
neral
ly provi
de for t
ax pa
id in the U
S to be
cre
dited ag
ains
t ta
x payable i
n the UK
.
St
amp dut
y and st
amp dut
y rese
rve ta
x
UK s
tamp d
uty a
nd/or sta
mp dut
y rese
rve t
ax (S
DRT
) wil
l,
sub
ject to c
er
tain exe
mption
s, be p
a
yabl
e on the tr
ansfe
r of
sha
res at a r
ate of 0.5% (rou
nded up to th
e near
est £
5 in
the c
ase of s
tam
p duty) of the c
onsid
erati
on for the t
rans
fer
.
Notwithstanding
this,
provided
tha
t an
instrume
nt is
ex
ecuted
in pu
rsua
nce of th
e agree
ment th
at gave rise to t
he char
ge to
SD
RT an
d that ins
trume
nt is st
ampe
d within s
ix yea
rs of the
agr
eemen
t (inclu
ding be
ing sta
mped a
s exempt) a
ny SDR
T
cha
rge sh
ould be c
ance
lled a
nd any SD
RT wh
ich ha
s alre
ady
been paid wil
l be
repaid.
US shareholders
This summary only applies t
o a
shareholder (
who is a citiz
en or
re
siden
t of the US o
r a domes
tic co
rpor
ation or a p
ers
on that
is oth
er
wise s
ubjec
t to US fede
ral in
come t
ax o
n a net inc
ome
ba
sis in re
spe
ct of the s
hare
s or ADS) that h
olds sh
ares o
r ADS
as c
apit
al as
sets
, is not re
side
nt in the U
K for U
K ta
x purp
oses
and d
oes not h
old sh
ares fo
r the pur
pose
s of a trad
e, prof
essi
on
or voc
ation t
hat is ca
rrie
d on in the U
K thro
ugh a br
anch or
agency.
Th
e summa
ry a
lso doe
s not add
res
s the ta
x tre
atment o
f
hol
ders t
hat are su
bjec
t to speci
al ta
x rul
es, s
uch as b
anks
,
ta
x
-ex
empt en
tities, insu
rance companies, dealers in
securities
or cu
rrenc
ies
, per
sons th
at hold sh
ares o
r ADS a
s par
t of an
integ
rated inve
stme
nt (inclu
ding a ‘st
raddl
e
’) co
mpri
sed of a
sha
re or AD
S and on
e or more ot
her po
sitio
ns, an
d pers
ons that
own (dire
ctly, indir
ectly o
r cons
truc
tively) 1
0
% or mo
re of the
co
mpany’s stoc
k (by vote or valu
e
)
, nor d
oes it a
ddres
s ta
x
tre
atment t
hat may be ap
plic
able a
s a resu
lt of inter
natio
nal
inc
ome ta
x tre
atie
s.
T
a
x inf
ormation for shareholders
Shareholder information
continued
GS
K Ann
ual R
epor
t 2021
293
Strategic report
Governance and remuneration
Financial statements
Investor information
T
ax information for shareholders
continued
T
axation of dividends
Th
e gros
s amount o
f divid
ends r
ecei
ved is tre
ated as f
oreig
n
sou
rce di
viden
d inco
me for US t
ax p
urpos
es
. It is not e
ligib
le for
the di
vide
nd rec
eived d
educt
ion all
owed to US co
rpor
ations
.
Dividends on ADS
are pa
yable
in US
dollars
; dividends
on
Ordinary Shares are pa
yable
in St
erling.
Dividends paid
in
Ster
ling wil
l be incl
uded i
n incom
e in the US d
ollar a
mount
ca
lculate
d by refer
ence to th
e exchan
ge rate on th
e day the
div
idend
s are re
ceive
d by the hol
der. Subje
ct to cer
ta
in
exception
s for
short-t
erm or
hedged positions, an
individual
eli
gible U
S holde
r will be s
ubjec
t to US ta
xati
on at a ma
ximu
m
fed
eral r
ate of 23.
8% plus a
pplic
abl
e state an
d loca
l ta
x in
re
spec
t of qual
iﬁed d
ivid
ends
. A quali
ﬁed d
ivide
nd as de
ﬁned
by the U
S Inter
nal Revenu
e Ser
vic
e (IR
S
) is a div
iden
d that
meets the
following
criteria:
1
.
M
ust be i
ssue
d by a US cor
por
ation, a c
orpo
ratio
n
inc
orpo
rated in a U
S pos
ses
sion, o
r a corp
orati
on that is
eli
gible fo
r the ben
eﬁts o
f a compr
ehens
ive inc
ome ta
x tr
eaty
dee
med s
atisfa
ctor
y
, as pu
blish
ed by the I
RS.
2.
The di
vide
nds are n
ot of a ty
pe lis
t
ed by th
e IRS a
s divi
dends
that d
o not qua
lif
y
.
3.
The re
quire
d divi
dend ho
lding p
erio
d has be
en met
. The
sha
res mu
st have bee
n owned by yo
u for mor
e than 60 d
ays
of the ‘
holdi
ng per
iod’ – wh
ich is de
ﬁned a
s the 1
2
1
-
day
per
iod th
at begin
s 60 days be
fore the ex-
divi
dend da
t
e, or
the d
ay in whic
h the stoc
k trade
s with
out the di
vide
nd pric
ed
in. F
or exam
ple, i
f a stock
’
s ex-di
viden
d date is 1 Oc
tober,
the s
hare
s must be h
eld for m
ore tha
n 60 days in th
e peri
od
bet
ween 2 A
ugust a
nd 30 Nove
mber of t
hat year i
n order to
cou
nt as a qu
aliﬁ
ed div
idend
.
Di
vide
nds that a
re not qua
liﬁ
ed are su
bjec
t to ta
xation at t
he
US fe
dera
l gradu
ated ta
x rate
s, at a ma
xim
um rate of 40
.8%
.
Some types of dividends
are aut
omatically e
xcluded fr
om being
qua
liﬁe
d divi
dends
, even if th
ey meet th
e other r
equire
ments
.
Th
ese inc
lude (b
ut are no
t limited to):
1
.
Capital gains d
istribution
s
2.
Dividends on
bank deposits
3.
Div
idend
s held by a c
orpo
ration i
n an Emp
loyee Stoc
k
Ownership Plan (ESOP)
4.
Dividends paid b
y tax-ex
empt corporat
ions.
US s
tate and lo
cal t
ax r
ates on qu
aliﬁ
ed and n
on-qu
aliﬁ
ed
div
idend
s may var
y and wou
ld be as
ses
sed i
n additi
on to the
fed
eral t
ax r
ates co
mmunic
ated ab
ove
.
T
a
x
ation of capit
al gains
Ge
nera
lly
, US ho
lder
s will not b
e subj
ect to UK c
api
tal ga
ins
ta
x, b
ut will b
e subje
ct to US ta
x on c
apit
al gai
ns rea
lise
d on
the s
ale or ot
her dis
posa
l of sha
res or A
DS. S
uch ga
ins will b
e
lon
g-term c
apit
al gain
s (
subje
ct to redu
ced r
ates of ta
xati
on for
individual holders
) if
the shares or ADS w
ere held
for more t
han
one ye
ar
, from t
he date the s
hare
s were ves
ted/rel
eas
ed.
Sho
rt-term c
apit
al ga
ins ca
n be subj
ect to ta
xati
on of rate
s of
up to 40.
8%
, wher
eas lo
ng-term c
api
tal ga
ins may be s
ubjec
t to
rate
s of up to 23.
8%. S
tate and l
ocal t
ax r
ates on c
apit
al gai
ns
may
also apply
.
Information report
ing
and backup withholding
Di
vide
nds and p
ayments o
f the pro
ceed
s on a sa
le of sha
res or
AD
S, pai
d withi
n the US or t
hrough c
er
tai
n US-r
elated ﬁ
nanci
al
intermediaries, are sub
ject to
informat
ion reporting and ma
y
be su
bjec
t to backup w
ithho
lding un
les
s the US ho
lder is a
co
rpor
ation or ot
her exem
pt reci
pient o
r provid
es a ta
xp
a
yer
ide
ntiﬁ
catio
n numbe
r and ce
rti
ﬁes t
hat no los
s of exem
ption
has occurred. Non-US holders generally are
not sub
ject to
information reporting or backu
p withholding, but
may
be
req
uired to p
rovide a c
er
tiﬁ
catio
n of their n
on-U
S statu
s in
co
nnect
ion wit
h paymen
ts rec
eived
. Any amo
unts wit
hheld w
ill
be al
lowed a
s a refun
d or cred
it agai
nst a hol
der’s US fe
dera
l
income tax liability provided t
he required
informat
ion is fu
rnished
to the I
RS.
E
sta
te and gif
t ta
xes
Und
er the E
state an
d Gif
t T
a
x C
onventio
n, a US sh
areho
lder
is not g
ener
ally su
bjec
t to UK inh
erit
ance t
ax
. However, a US
hol
der may be s
ubjec
t to US fede
ral e
state an
d gif
t ta
x.
St
amp dut
y
UK s
tamp d
uty a
nd/or SDR
T wil
l, subj
ect to ce
rt
ain exem
ptions
,
be paya
ble on a
ny trans
fer of sh
ares to th
e ADS cu
stodia
n or
dep
osito
ry at a r
ate of 1
.5% of the a
mount of a
ny cons
ider
ation
prov
ided (i
f trans
ferr
ed on sa
le
), or thei
r value (i
f trans
ferr
ed for
no consideration
).
Howeve
r
, no stam
p dut
y or SDR
T sho
uld be paya
ble on th
e
tra
nsfer o
f, or agre
ement to tr
ansf
er
, an AD
S.
Shareholder information
continued
29
4
GS
K Ann
ual R
epor
t 2021
Other st
atutory disclosur
es
Shareholder ser
vices and contac
ts
Regist
rar
The company’
s
registrar is
:
Equiniti Limited
As
pect H
ouse
, Spenc
er Roa
d, La
ncing
, BN9
9 6DA
w
ww
.shareview
.co.uk
T
e
l: 03
7
1 38
4 299
1 (in the U
K)
*
T
e
l: +
44 (0)
1
2
1 4
1
5 7067 (
o
utsi
de the U
K)
Equiniti
provides a
range of
servic
es f
or shareholders
:
Service
What it offers
How to participate
Dividend Reinvestment Plan
(DR
I
P)
As an alternative to receiving cash dividends you may choose
to reinvest your dividends to buy more GS
K shares.
A DR
I
P election form can be downloaded
from www
.shareview
.co.uk or requested by
contacting Equiniti.
Dividend payment direct to your bank
account (Bank Mandate)
All dividends are paid directly into your bank or building society
account. T
o receive your cash dividends, you must provide
Equiniti with your bank or building society account details.
This is a quic
k and secure method of payment.
A dividend bank mandate form can be
downloaded from www
.shareview
.co.uk
or requested by contacting Equiniti.
Dividend payment direct to bank
account for overseas shareholders
Equiniti can convert your dividend into your local currency and
send it direct to your local bank account. This service is available
in over 1
00 countries worldwide.
For more details on this service and the costs
involved please contact Equiniti.
Electronic communications
Shareholders may elect to receive electronic notiﬁcations
of company communications including our Annual Report,
dividend payments, dividend conﬁrmations and the availability of
online voting for all general meetings. Each time GSK publishes
shareholder documents you will receive an email containing a link
to the document or relevant website.
Please register at www
.shareview
.co.uk.
Shareview portfolio service
T
his enables you to create a free online portfolio to view your
share balance and movements, update your address and
dividend payment instructions and register your votes for
our general meetings.
Please register at www
.shareview
.co.uk.
Deduplication of publications or mailings
If you receive duplicate copies of mailings, you may have more
than one account. Please contact Equiniti and they will arrange
for your accounts to be merged into one for your convenience
and to avoid waste and unnecessary costs.
Please contact Equiniti.
Share dealing service
†
(please note that market trading hours
are from 8.00am to 4.30pm U
K time,
Monday to Friday (excluding public
holidays in England and W
ales))
Shareholders may trade shares, either held in certiﬁcated
form or in our Corporate Sponsored Nominee, online, by
telephone or via postal dealing service provided by Equiniti
Financial Services Limited.
For online transactions, please log on to:
www
.shareview
.co.uk/dealing.
For telephone transactions, please call:
0345 6
03 7
03
7 (in the U
K) or
+44 (0)121 415 75
60 (outside the U
K).
Lines are open from 8.00am to 4.30pm
U
K time, Monday to Friday (excluding
U
K public holidays).
For postal transactions, please call:
03
71 38
4 2991* to request a
dealing form.
Corporate Sponsored Nominee Account
This is a convenient way to manage your shares without requiring
a share certiﬁcate. The service provides a facility for you to hold
your shares in a nominee account sponsored by the company
.
Y
ou will continue to receive dividend payments and can attend
and vote at the company’
s general meetings. Shareholders’
names do not appear on the publicly available share register
and the service is free to join.
An application form can be requested
from www
.shareview
.co.uk or by
contacting Equiniti.
Individual Savings Accounts (I
SAs)
†
The company has arranged for Equiniti Financial Services
Limited to provide a GS
K Corporate ISA to hold GS
K shares.
Details are available from www.shareview
.co.uk
or can be requested by telephoning Equiniti,
on 0345 07
00 7
20. Lines are open 8.00am
to 4.30pm for dealing, and until 5.3
0pm for
enquiries Monday to Friday (excluding public
holidays in England and W
ales).
*
Lines are open from 8.30am to 5.30pm, Monday to Friday (excluding public holidays in England and Wales).
†
The provision of share dealing details is not intended to be an invit
ation or inducement to engage in an investment activity
. Advice on share dealing should be obtained from a
stockbroker or independent ﬁnancial adviser
.
GS
K Ann
ual R
epor
t 2021
295
Strategic report
Governance and remuneration
Financial statements
Investor information
ADS Dep
os
itar
y
Th
e ADR pr
ogra
mme is ad
minis
tered by J
.P
. M
orga
n
Cha
se Ba
nk, N
.
A:
Regular Correspondence
:
EQ
Shareowner Services
P
.O. Box 64
504
St. P
aul, M
N 55
1
64-
050
4
De
liver
y of Stoc
k Cer
ti
ﬁcate
s and Ove
rnigh
t Mail:
EQ
Shareowner Services
1
10 Cent
re Point C
ur
ve, Suite 1
0
1
Me
ndota H
eigh
ts, M
N 55
1
20-
4
1
00
w
ww
.shareowneronline.com
Ge
nera
l
: +
1 800 9
90 1
135
Fro
m outsi
de the US: +
1 65
1 453 21
28
Th
e Depo
sitor
y als
o provid
es Gl
obal I
nvest Di
rect
, a dire
ct
AD
S purch
ase/sa
le and di
vide
nd reinve
stme
nt plan fo
r ADS
holders. For details on how
to
enrol please visit ww
w
.adr
.com
or c
all the a
bove help
line num
ber to obt
ain an e
nrolme
nt pack
.
Don
ating sh
ares to S
a
ve the Ch
ildren
In 201
3
, GS
K emba
rked on a
n ambit
ious glo
bal pa
rt
ners
hip
wit
h Save the Ch
ildre
n to share o
ur expe
rti
se and r
esour
ces
wit
h the aim of h
elpin
g to save the li
ves of one m
illion c
hildr
en.
Sha
reho
lder
s with a sm
all num
ber of sh
ares
, the val
ue of whi
ch
makes it
uneconomical to
sell, ma
y wish
to
consider donat
ing
the
m to Save the Chi
ldren
. Donate
d shar
es will b
e aggre
gated
and s
old by Save th
e Child
ren wh
o will us
e the fund
s rais
ed to
hel
p them re
ach the a
bove goa
l.
†
T
o o
btain a s
hare d
onatio
n form, p
lea
se con
tact ou
r regis
trar,
Equ
initi, w
hich i
s manag
ing the do
nation a
nd sal
e of UK s
hare
s
to Save the C
hildr
en fre
e of char
ge.
†
The provision of share dealing details is not intended to be an invit
ation or inducement
to engage in an investment activity
. Advice on share dealing should be obtained from
a stockbroker or independent ﬁnancial adviser
.
Stock Exchange announcement notiﬁ
cations
W
e pro
vide shareholders with
a service to receive
automa
tic
ema
il noti
ﬁcati
ons wh
en we publ
ish a stoc
k exchan
ge
ann
ounce
ment
. T
o rec
eive em
ail noti
ﬁc
ations
, ple
ase si
gn up
for a
nnounc
emen
ts at w
ww.gsk
.co
m in the I
nvestor
s sect
ion.
Con
tacts
Investor relations
Inve
stor rel
ations m
ay be con
tacted a
s follow
s
:
UK
98
0 Grea
t W
est Ro
ad
Brentford, Middlesex, TW8 9GS
T
e
l: +
44 (0)20 8047 5000
US
5 Cr
esce
nt Dri
ve
Philadelphia PA
1
91
1
2
T
e
l: +
1 8
88 825 52
49 (US toll f
ree
)
T
e
l: +
1 21
5 75
1 4
6
1
1 (outsi
de the US)
GSK Response Center
Te
l
:
+1
8
88 825 52
49 (US tol
l free)
Share scam alert
If yo
u rece
ive an uns
olici
ted telep
hone c
all of
feri
ng to sell o
r buy
your s
hare
s, ple
ase t
ake ex
tra ca
re. Th
e call
er may be p
ar
t of a
highly
organised
ﬁnancial
scam.
If yo
u are a UK s
hare
holde
r
, plea
se co
ntact th
e Fina
ncia
l
Conduct Authority at ww
w
.fca.org.uk
/
consumers or
on its
consumer helplin
e:
T
e
l: 080
0 1
1
1 6768 (in th
e UK
)*
Te
l
:
+4
4 (0)
20 7
066 1000 (outs
ide the U
K)
*
Lines are open from 8.00am to 6.00pm, UK time, Monday to Friday, except UK public
holidays, and 9.00am to 1.00pm on Saturdays.
Shareholders services and contacts
continued
Other statutory disclosures
continued
29
6
GS
K Ann
ual R
epor
t 2021
A number
of pro
visions of
US la
w and
regulation
apply t
o the
co
mpany be
caus
e our sh
ares a
re quoted o
n the NYSE i
n the
for
m of ADS
.
NYSE
rules
In g
ener
al, the N
Y
SE r
ules p
ermit t
he com
pany to foll
ow UK
co
rpor
ate governa
nce pr
acti
ces in
stead of t
hose ap
plie
d in
the U
S, prov
ided th
at we expl
ain any si
gniﬁ
cant va
riati
ons.
Thi
s expla
natio
n is cont
aine
d in our Fo
rm 20
-F
, w
hich c
an be
acc
es
sed fro
m the SEC
'S ED
GA
R datab
ase or v
ia our we
bsite.
NYSE r
ules r
equir
e us to ﬁle an
nual an
d interi
m writ
ten
afﬁr
ma
tions concerning
our A
udit &
Risk Committee (ARC)
and o
ur state
ment on s
igniﬁ
can
t dif
feren
ces in c
orp
orate
governance.
Sarb
anes-
Oxley Ac
t of 20
02
Fol
lowing a n
umber o
f corp
orate an
d acco
unting s
cand
als in
the U
S, Co
ngre
ss pa
sse
d the Sar
bane
s-O
xley A
ct of 2002
.
Sarbanes-O
xle
y is
a wide-rangin
g piece o
f legisla
tion
concerned largely with ﬁnancial
reporting and corporate
governance.
As r
ecom
mende
d by the SEC, t
he comp
any has e
sta
blish
ed a
Di
sclos
ure C
ommit
tee. T
he Co
mmit
tee rep
or
ts to the CEO, the
CF
O and to the A
RC. I
t is cha
ired by th
e Comp
any Sec
reta
ry
and i
ts memb
ers c
onsis
t of sen
ior man
ager
s from ﬁ
nance
, lega
l,
corporate commun
ications and
inv
estor
relations.
E
xte
rnal l
egal c
ounse
l, the ex
tern
al audi
tors an
d intern
al expe
rts
are i
nvited to at
tend the D
iscl
osur
e Comm
itte
e
’s meetin
gs
periodically
. The Committee has responsibil
ity for considering
the mat
eriality of i
nformation
and, on
a timely
basis, determinin
g
the di
sclo
sure of t
hat infor
matio
n. It ha
s res
ponsi
bilit
y for the
tim
ely ﬁli
ng of rep
ort
s with th
e SEC and th
e forma
l review o
f
the A
nnual R
epor
t and F
orm 20
-F
. In 2021
, th
e Com
mitte
e met
18
t
i
m
e
s
.
Sa
rbane
s-
Oxle
y requir
es that t
he annu
al repo
rt o
n Form 20
-F
co
ntain
s a statem
ent as to wh
ether a m
ember o
f the AR
C is
an au
dit co
mmit
tee ﬁna
ncial e
xper
t, a
s deﬁn
ed in ru
les und
er
Sa
rbane
s-
Oxle
y
. Such a st
atemen
t for the re
levant me
mber
s
of the A
RC (Char
les Ba
ncrof
t) is in
clude
d in the Bo
ard
Co
mmit
tee info
rmati
on are
a of the C
orpor
ate Gover
nanc
e
rep
or
t on page 9
3 and in hi
s biogr
aphy on p
age 84
. Additi
onal
disclosure requiremen
ts arise un
der section 30
2 and
section
404 o
f Sarb
anes
-O
xley in r
espe
ct of dis
clos
ure co
ntrols a
nd
procedures and int
ernal contr
ol ov
er ﬁnancial
reporting.
Se
ctio
n 302
: Corpo
rate resp
onsibilit
y for
ﬁnancial r
eport
s
Sa
rbane
s-
Oxle
y requir
es for th
e CEO and th
e CFO to c
ompl
ete
formal certiﬁc
a
tions, conﬁrming tha
t
:
–
they h
a
ve eac
h reviewe
d the ann
ual rep
or
t on For
m 20-
F;
–
ba
sed on th
eir k
nowle
dge, the a
nnua
l repor
t on F
orm 20
-F
contains no
material
misstatements
or omissions
;
–
ba
sed on th
eir k
nowle
dge, the ﬁ
nanc
ial st
atement
s and othe
r
ﬁnancial informat
ion fairly
present, in all
mat
erial respects, the
ﬁna
ncia
l condi
tion
, resul
ts of ope
ratio
ns and c
ash ﬂow
s as of
the d
ates, a
nd for the p
erio
ds, pr
esen
ted in the a
nnual r
epor
t
on Fo
rm 20
-F;
–
they
are responsible
for
establishing
and main
taining
disclosure controls
and procedures
that en
sure tha
t mat
erial
info
rmati
on is mad
e know
n to them, a
nd have evalu
ated the
ef
fect
ivene
ss of the
se co
ntrols a
nd pro
cedur
es as at t
he year
end
, the re
sults of s
uch eval
uation b
eing c
ontai
ned in th
e
ann
ual rep
or
t on For
m 20-
F;
–
they are responsible for
establishing and maintaining internal
control o
ver
ﬁnancial reporting that
provides reasonable
assurance regarding t
he reliab
ility of ﬁnan
cial reporting and
the p
repar
ation o
f ﬁnanc
ial st
atement
s for ex
terna
l purpo
ses
in accordance with generally accepted accounting principles;
and
–
they h
a
ve dis
clos
ed in the a
nnual r
epor
t on Fo
rm 20
-F any
cha
nges i
n intern
al cont
rols over ﬁ
nanci
al rep
or
ting dur
ing the
per
iod c
overed by th
e annua
l repor
t on F
orm 20
-F th
at have
materially
affected, or are
reasonably lik
ely to
affect mat
erially
,
the c
ompa
ny’
s inter
nal co
ntrol over ﬁ
nanc
ial re
por
ting, a
nd
they h
a
ve dis
clos
ed, ba
sed on t
heir mo
st rec
ent evalu
ation of
inter
nal c
ontrol ove
r ﬁnanc
ial re
por
ting
, to the ex
terna
l auditor
and t
he ARC
, all sig
niﬁc
ant de
ﬁcie
ncie
s and mater
ial
wea
kne
sse
s in the de
sign or o
pera
tion of in
ternal c
ontro
ls
over
ﬁnancial reporting which are
reasonably likely
to
affect
adve
rse
ly the co
mpany’s ab
ilit
y to reco
rd, pro
ces
s,
summarise and report ﬁnancial inf
ormation, and
any
fraud
(rega
rdle
ss of mate
riali
ty) involvi
ng per
sons th
at have a
sig
niﬁc
ant ro
le in the c
ompa
ny’
s inter
nal co
ntrol ove
r ﬁnanc
ial
reporting.
Th
e Group h
as ca
rrie
d out an eva
luatio
n under t
he supe
rv
isio
n
and w
ith the p
ar
ticip
ation of i
ts mana
gemen
t, incl
uding th
e CEO
and C
FO, of th
e effe
ctive
nes
s of the de
sign an
d oper
ation of
the G
roup’s discl
osur
e contr
ols and p
roce
dure
s as at 3
1
De
cemb
er 202
1
.
Th
ere are i
nhere
nt limi
tation
s to the ef
fecti
venes
s of any sys
tem
of dis
clos
ure co
ntrols a
nd pro
cedur
es, i
nclud
ing the po
ssi
bilit
y
of hum
an err
or and th
e circu
mventio
n or overri
ding of th
e
co
ntrols a
nd proc
edur
es. A
ccor
dingl
y
, even ef
fecti
ve disc
losur
e
controls and
procedures can only
provide reasonable
as
sura
nce of a
chievi
ng their c
ontro
l objec
tives
.
US law and regulat
ion
Other statutory disclosures
continued
GS
K Ann
ual R
epor
t 2021
297
Strategic report
Governance and remuneration
Financial statements
Investor information
Th
e CEO and C
FO exp
ect to co
mplete th
ese c
ert
iﬁc
ations
and r
epor
t the
ir conc
lusi
ons on the e
ffe
ctive
ness o
f discl
osur
e
co
ntrols a
nd proc
edur
es in M
arch 2022, fo
llowin
g whic
h the
ce
rti
ﬁca
tions w
ill be ﬁl
ed with t
he SEC as p
ar
t of our Gr
oup’
s
For
m 20-
F
.
Se
ctio
n 40
4
: Man
agemen
t’s annu
al repor
t on int
ernal
control ov
er ﬁnancial report
in
g
In a
ccor
danc
e with th
e requi
remen
ts of sec
tion 40
4 of
Sa
rbane
s-
Oxle
y
, the follow
ing re
por
t is prov
ided by
man
ageme
nt in re
spec
t of the co
mpany’s inte
rnal c
ontrol ove
r
ﬁna
ncia
l repo
rti
ng (
as de
ﬁned i
n Rules 13a-
1
5(f) and 15d-
1
5(f)
und
er the US S
ecur
ities E
xch
ange Ac
t of 1
9
34, a
s amend
ed
(
the E
xcha
nge Ac
t
)
):
–
management is
responsible for
establishing and
maintaining
ade
quate inter
nal c
ontrol ove
r ﬁnan
cial re
por
ting fo
r the
Group. Int
ernal control
over
ﬁnancial reporting is designed
to
provide
reasonable assurance regarding
the
reliability of
ﬁnancial reporting and the
preparation
of ﬁnancial sta
tements
for ex
ter
nal pur
pose
s in acc
orda
nce wi
th IF
RS;
–
man
ageme
nt cond
ucted a
n evaluati
on of the e
ffe
ctiven
ess
of inte
rnal c
ontro
l over ﬁnan
cial r
epor
ting b
ase
d on the
fr
amework
, In
ternal C
ontr
ol – Integ
rated Fr
amewor
k (
20
1
3)
issued by t
he Committee of
Sponsoring Organisations
of
the T
readway
Commission (
COSO
);
–
the
re have bee
n no chan
ges in th
e Grou
p
’s interna
l cont
rol
over ﬁn
anci
al rep
ort
ing dur
ing 202
1 that have m
aterial
ly
affected, or are
reasonably likely
to
mat
erially affect, the
Gr
oup’
s inter
nal co
ntrol over ﬁ
nanc
ial rep
or
ting;
–
man
ageme
nt has a
sse
sse
d the ef
fect
ivene
ss of inte
rnal
co
ntrol over ﬁ
nanci
al rep
or
ting as a
t 3
1 Dece
mber 2021
and i
ts con
clusi
on will b
e ﬁled a
s par
t of the G
roup’s For
m
20
-F; and
–
De
loit
te LLP
, w
hich ha
s audi
ted the co
nsoli
dated ﬁn
anci
al
st
atements o
f the Gr
oup for the ye
ar end
ed 3
1 Dec
embe
r
202
1
, has a
lso as
ses
sed th
e eff
ective
nes
s of the Gr
oup’
s
internal
control o
ver
ﬁnancial reporting under A
uditing
Sta
ndar
d 2
201 of the Pub
lic C
ompany A
ccou
nting O
versi
ght
Bo
ard (Uni
ted State
s
). Their a
udit re
por
t will b
e ﬁled w
ith the
Gr
oup’
s For
m 20-
F
.
Se
ctio
n 1
3
(
r
) of the E
xchang
e Act
Section 1
3(r
)
of the
Exchange Act requ
ires issuers to
make
spe
ciﬁ
c disc
losur
e in their a
nnua
l repor
ts of c
er
tain t
ype
s of
de
alings w
ith Ir
an, or c
ontro
lled tr
ans
actio
ns or dea
lings w
ith
gover
nment-ow
ned ent
itie
s, as we
ll as de
aling
s with en
titie
s
sanctioned for
activities relat
ed t
o t
errorism or pr
oliferation
of
wea
pons of m
ass d
estr
uctio
n, even wh
en thos
e activ
itie
s are
not pr
ohibi
ted by US law a
nd do not invo
lve US pe
rson
s.
The Group exports cer
tain pharmaceutical, vaccine and
co
nsume
r produ
cts to Ir
an, vi
a sale
s by non-
US ent
ities t
hat
are n
ot subs
idiar
ies of a U
S entit
y
, to two p
rivatel
y held I
rani
an
distributors.
Th
e Group d
oes not r
egula
rly re
cei
ve inform
ation r
egard
ing
the identity of
its distribut
ors' do
wnstream customers and
inter
medi
arie
s in Ir
an, an
d it is pos
sibl
e that the
se par
ti
es
inc
lude en
titie
s, suc
h as gover
nment-ow
ned ho
spit
als and
pha
rmac
ies
, that are ow
ned dir
ectl
y or indir
ectl
y by the Ir
ania
n
gover
nment o
r by per
sons or e
ntitie
s san
ction
ed in co
nnect
ion
with t
errorism or prol
iferation
activities.
Be
caus
e the Gro
up doe
s not reg
ularl
y rece
ive info
rmatio
n
regarding the ident
ity of its distribut
ors' do
wnstream customers
it c
annot e
stab
lish th
e propo
rti
on of gro
ss reve
nue or sa
les
poten
tially
attributable t
o en
tities a
fﬁliated with
the
Iranian
gov
ernment or
parties sanctioned fo
r disclosable
activities.
As a r
esult
, the Gr
oup is re
por
ting th
e entire g
ross r
evenue
s
(£
1
1.5 milli
on
) and n
et proﬁ
ts (£5.6 m
illion) fro
m the Gro
up's
sa
les to Ir
an in 2021
.
Th
e Group i
s also awa
re that so
me hos
pita
ls or othe
r medic
al
fac
ilitie
s in Leb
anon m
ay be af
ﬁliate
d with or c
ontro
lled by
He
zbolla
h or othe
r group
s that are d
esig
nated by the U
nited
State
s purs
uant to E
xecu
tive Or
der 1
32
24. Agai
n, the G
roup
doe
s not de
al dire
ctly w
ith suc
h hospi
tals o
r facili
ties a
nd
ins
tead se
lls thro
ugh dis
tributo
rs. T
he Gr
oup is una
ble to
es
tabli
sh the pr
opor
tio
n of gros
s revenu
e or sal
es poten
tiall
y
at
tribu
table to r
epor
ta
ble act
iviti
es. A
s a res
ult, the G
roup i
s
rep
or
ting the e
ntire gr
oss r
evenues (£
30.7 milli
on
) and ne
t
pro
ﬁts (£0.6 m
illio
n
) from the G
roup's sa
les to Le
bano
n in 202
1
.
Unles
s noted, the Group intends to continue the acti
vities
described abo
ve.
In a
dditio
n to Sect
ion 1
3(r
) of the E
xcha
nge Act
, US law
generally restricts dealings
by
US persons and
dealings tha
t
othe
rw
ise ar
e subje
ct to US jur
isdi
ction w
ith ce
rt
ain co
untrie
s or
territories
that
are subject t
o comprehensiv
e sanctions, curren
tly
Cr
imea
, Cub
a, Do
netsk P
eople's Re
public
, Ira
n, Luh
ansk
Peo
ple's Repub
lic, N
or
th Korea a
nd Syri
a, a
s well as w
ith the
Gove
rnmen
t of V
enezu
ela (
thou
gh not wi
th the co
untr
y of
V
ene
zuela a
s a whol
e
). T
he Gr
oup doe
s busin
ess
, via no
n-U
S
enti
ties (whic
h are not ow
ned or c
ontro
lled by US e
ntiti
es
), in
ce
rt
ain suc
h juris
dicti
ons
. While we b
elieve th
e Group c
ompl
ies
wit
h all app
lica
ble US s
anct
ions in a
ll materi
al re
spec
ts, su
ch
laws a
re com
plex and c
ontin
ue to evolve ra
pidly.
US law and regulation
continued
Other statutory disclosures
continued
29
8
GS
K Ann
ual R
epor
t 2021
T
o ensure a
consistent
approach t
o polit
ical contributions
acr
oss th
e Group, i
n 2009 a gl
obal p
olicy wa
s intro
duce
d
to v
oluntarily st
op all
corporate political contributions.
In th
e peri
od fro
m 1 Janua
ry 20
09 to 3
1 De
cemb
er 202
1
,
the G
roup di
d not make a
ny politi
cal do
nation
s to EU or
non-EU organisations.
Not
wit
hsta
nding th
e introd
uctio
n of this p
olicy, in acc
orda
nce
wit
h the Fed
eral E
lect
ion Ca
mpaig
n Act in th
e US, we c
ontinu
e
to sup
por
t an emp
loyee-
oper
ated Polit
ical A
ction C
omm
ittee
(PA
C) that faci
litate
s volunt
ar
y politi
cal d
onatio
ns by eligi
ble
GS
K empl
oyees
.
Th
e P
A
C is not c
ontro
lled by GS
K
. Deci
sions o
n the amo
unts
and r
ecipi
ents of c
ontri
butio
ns are gove
rned by t
he P
AC Boar
d
of Di
recto
rs. C
ontr
ibuti
ons to the PA
C are m
ade by pa
rti
cipati
ng
eli
gible e
mployee
s exerc
ising th
eir le
gal ri
ght to pool t
heir
resources and make
political contribut
ions, which are
subject
to str
ict lim
itatio
ns unde
r US law. In 2021
, a tot
al of
US
$298
,00
0 (
2020 – US$
366
,
7
50) was do
nated to
pol
itic
al orga
nisa
tions by th
e GSK e
mployee PAC.
English la
w requi
res prior shareholder
approv
al for
political
contributions
to
EU polit
ical partie
s
and indepen
dent election
ca
ndidate
s as wel
l as for any E
U politi
cal ex
pendi
ture. T
he
deﬁnitions
of pol
itical donat
ions, polit
ical expendit
ure and
political organisations
used in
the legisla
tion are,
howe
ver
,
quite
broad.
In particular
,
the deﬁnit
ion of
EU
political
organisations ma
y e
xtend to
bodies such
as those concerned
wit
h polic
y review, law refo
rm, th
e repr
esent
ation o
f the
bus
ines
s comm
unit
y and sp
ecia
l intere
st grou
ps such a
s
tho
se con
cern
ed with t
he envir
onmen
t, whic
h the co
mpany
and its
subsidiaries mig
ht wish
to
support.
As a r
esult
, the de
ﬁniti
ons may cove
r legit
imate bus
ines
s
activities no
t in
the o
rdinary sense considered
to
be polit
ical
don
ations o
r politi
cal ex
pend
iture, n
or are th
ey desi
gned to
support any pol
itical party or independent
election
candidat
e.
Th
erefor
e, not
with
stand
ing our p
olicy, and wh
ile we do
not in
tend to make do
nation
s to any EU poli
tica
l par
tie
s or
org
anis
ations
, nor to inc
ur any EU po
litic
al exp
enditu
re, we
annually seek
shareholder autho
risation for
any
inadvertent
expenditure.
Th
e author
ity i
s a prec
autio
nar
y mea
sure to e
nsure th
at the
co
mpany an
d its sub
sidi
arie
s do not ina
dver
tently b
reac
h the
legislation.
Thi
s autho
risa
tion pro
ces
s, for e
xpend
iture of u
p to £
1
0
0,00
0
eac
h year, dates ba
ck to the AGM h
eld in M
ay 2001
, fo
llowin
g
the i
ntrodu
ction o
f the Polit
ical P
ar
ties
, Elec
tions a
nd
Refe
rendu
ms Act 20
00. T
he autho
rit
y has s
ince be
en
renewed
annually
.
Donat
i
ons to political organisat
ion
s and political expenditure
Other statutory disclosures
continued
GS
K Ann
ual R
epor
t 2021
299
Strategic report
Governance and remuneration
Financial statements
Investor information
Group companies
In a
ccor
danc
e with S
ectio
n 409 of th
e Com
panie
s Act 20
06 a full li
st of su
bsidi
arie
s, a
ssoc
iates
, joint ve
ntures a
nd join
t
ar
range
ments
, the ad
dres
s of the re
gister
ed of
ﬁce a
nd ef
fect
ive per
centa
ge of equ
ity ow
ned, a
s at 3
1 Dec
embe
r 202
1 are
disclosed be
low
.
Unless o
therwise stat
ed th
e share
capital discl
osed comprises
Ordinary shares whic
h are
indirect
ly held
by
Gl
axo
Smith
Kli
ne plc
. The pe
rcent
age he
ld by cla
ss of sh
are is s
tated wh
ere thi
s is les
s than 1
00
%. U
nles
s other
wi
se state
d,
all s
ubsi
diar
y com
panie
s have thei
r regis
tered o
fﬁ
ce and a
re ta
x res
ident i
n their c
ountr
y of in
corp
orati
on.
Name
Security
Registered address
Wholly owned subsidiaries
150
6369 Alberta U
L
C
Common
3500 855-2nd Street SW
, Calgary AB T2P 4J8, Canada
Action Potential V
enture Capit
al Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
Adechsa GmbH (ii)
Ordinary
c/o PRV Provides T
reuhandgesellschaft A
G, Dorfstrasse 38, 6341, B
aar
,
Switzerland
Allen & Hanburys Limited (ii)
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
Allen & Hanburys Pharmaceutical Nigeria Limited
Ordinary
24 Abimbola W
ay
, Ilasamaja, Isolo, Lagos, Nigeria
Allen Farmaceutica, S.A.
Ordinary
Severo Ochoa, 2, Parque T
ecnológico de Madrid, T
res Cantos, 287
60,
Madrid, Spain
Allen Pharmazeutika Gesellschaft m.b.H.
Ordinary
W
agenseilgasse 3, Euro Plaza, Gebäude 5i, 4.Stoc
k, 1120, V
ienna, Austria
Beecham Group p.l.c
5p Shares 'B';
20p Shares 'A'
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
Beecham Pharmaceuticals (Pte) Limited
Ordinary
38 Quality Road, Jurong Industrial Estate, Jurong, 618
809, Singapore
Beecham P
ortuguesa-Produtos Farmacêuticos e Químicos, Lda
Ordinary Quota
Rua Dr Antonio Loureiro B
orges No 3, Arquiparque, Miraﬂores,
1495-131, Alges, Portugal
Beecham S.A. (ii)
Ordinary
avenue Fleming 20, 1300 Wavre, Belgium
Biovesta Ilaçlari Ltd. Sti. (ii)
Nominative
Büyükdere Caddesi No. 1
7
3, 1.Levent Plaza B Blok, 1.Levent, Istanbul,
343
94, T
urkey
Cascan GmbH & Co. KG
Partnership Capital
Prinzregentenplatz 9, D-816
75, Munich, Germany
Castleton Investment Ltd (In Liquidation)
Ordinary
C/O D
T
OS, 19 Cybercity
, 1
0th Floor Standard Chartered T
ower, Ebene,
Mauritius
Cellzome GmbH
Ordinary
Meyerhofstrasse 1, 69117
, Heidelberg, Germany
Cellzome Limited (in liquidation since year end)
Ordinary
55 Baker Street, London, W1U 7E
U, United Kingdom
Charles Midgley Limited (in liquidation since year end)
7% Cumulative Preference;
Ordinary
55 Baker Street, London, W1U 7E
U, United Kingdom
Clarges Pharmaceuticals Limited (in liquidation since year end)
Ordinary;
Preference (99.97%)
55 Baker Street, London, W1U 7E
U, United Kingdom
Clarges Pharmaceutical T
rustees Limited (ii) (iv)
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
Colleen Corporation
Common
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Corixa Corporation
Common
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Dealcyber Limited
Ordinary
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
Desarrollo Energía Solar Alternativa S.L.
Ordinary
Severo Ochoa, 2, Parque T
ecnológico de Madrid, T
res Cantos, 287
60,
Madrid, Spain
Duncan Flockhart Australia Pty Limited (ii) (iv)
Ordinary
1
061 Mount
ain Highway
, Boronia V
ictoria VIC 3155, Australia
Duncan Pharmaceuticals Philippines Inc.
Common
23rd Floor, T
he Finance Centre, 26th Street Corner 9th Avenue, Bonifacio
Global City
, T
aguig City, 1634, Philippines
Etex Farmaceutica Ltda
Social Capital
Avenue Andres Bello 268
7
, Piso 19, Las Condes, S
antiago, C.P
.
7550
611, Chile
Genelabs T
echnologies, Inc.
Common
Corporation Service Company
, 271
0 Gateway Oaks Drive, Suite 15
0N,
Sacramento CA 95833, United St
ates
Glaxo Group Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
Glaxo Kabushiki Kaisha (ii)
Ordinary
1-8-1 Akas
aka Minato-ku, T
okyo, Japan
Glaxo Laboratories (Nigeria) Limited (ii)
Ordinary
82 Marine Road, Apapa, Lagos, Nigeria
Glaxo Laboratories Limited (In Liquidation)
Ordinary
55 Baker Street, London, W1U 7E
U, United Kingdom
Glaxo New Zealand Pension Plan T
rustee Limited
Ordinary
Level 2 E.2, Generator at GridAKL, 12 Madden Street, Wynyard Quarter
,
Auckland, 1
0
1
0, New Zealand
Glaxo Operations U
K Limited
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
Glaxo Properties BV
Ordinary
V
an Asc
h van W
ijckstraat 55h, 3811 LP
, Amersfoort, Netherlands
Glaxo T
rustees Limited (ii) (in liquidation)
Ordinary
55 Baker Street, London, W1U 7E
U, United Kingdom
Glaxo V
erwaltungs GmbH
Ordinary
Prinzregentenplatz 9, D-81675, Munic
h, Germany
Glaxo W
ellcome Australia Pty Ltd (ii) (iv)
Ordinary
1
0
61 Mountain Highway
, Boronia Victoria VIC 3155, Australia
Glaxo W
ellcome Farmacêutica, Limitada
Ordinary Quot
a
Rua Dr Antonio Loureiro Borges No 3, Arquiparque, Miraﬂores,
1495-131, Alges, Portugal
Glaxo W
ellcome International B.V
. (ii) (iii)
Ordinary
Huis ter Heideweg 62, 37
05 LZ, Zeist, Netherlands
Glaxo W
ellcome Manufacturing Pte Ltd
Ordinary
1 Pioneer Sector 1, Jurong Industrial Estate, Jurong, 628
413, Singapore
Glaxo W
ellcome Production
Ordinary
23 rue François Jacob, 92500, Rueil-Malmaison, France
Glaxo W
ellcome V
idhyasom Limited (ii)
Ordinary
12th Floor W
ave Place, 55 W
ireless Road, Lumpini, Pathumwan,
Bangkok, 1
033
0, T
hailand
Other statutory disclosures
continued
3
00
GS
K Ann
ual R
epor
t 2021
Name
Security
Registered address
Who
lly owne
d subsidi
aries
c
ontinued
Glaxo W
ellcome, S.A.
Ordinary
Poligono Industrial Allendeduero, Avenida de Extremadura, 3, Aranda de
Duero, 09
400, Burgos, Spain
Glaxo, S.A.
Ordinary
Severo Ochoa, 2, Parque T
ecnologico de Madrid, T
res Cantos, 28
7
60,
Madrid, Spain
Glaxo-Allenburys (Nigeria) Limited (ii)
Ordinary
41 Creek Road, Apapa, Lagos, P
MB 1401, Nigeria
Glaxochem Pte Ltd (iii)
Ordinary
23 Rochester Park, 139234, Singapore
GlaxoSmithKline - Produtos Farmacêuticos, Limitada
Ordinary Quota
Rua Dr Antonio Loureiro B
orges No 3, Arquiparque, Miraﬂores,
1495-131, Alges, Portugal
GlaxoSmithKline (Cambodia) Co., Ltd. (In Liquidation)
Ordinary
5th Floor D
K
SH Building, No.
7
9
7 Preah Monivong Boulevard (Co,
Sangk
at Phsar Deum Thakov
, Khan Chamkarmon, Phnom Penh,
Cambodia
GlaxoSmithKline (China) Investment Co Ltd
Ordinary
Room 9
0
1, 902, 903, 905, 9
08, 90
9 and 91
0, Unit 90
1, Floor 9, No. 56
Mid 4th East Ring Road, Chaoyang District, Beijing, China
GlaxoSmithKline (China) R&D Company Limited
Equity
F1-3, No.18 Building, 9
99 Huanke Road, Pilot Free T
rade Zone,
Shanghai, 20
121
0, China
GlaxoSmithKline (Cyprus) Limited
Ordinary
Arch. Makariou I
II, 2-4, Capit
al Center
, 9th Floor
, Nicosia, P
.C. 1
065,
Cyprus
GlaxoSmithKline (GS
K) S.R.L.
Ordinary
1-5 Costache Negri Street, Opera Center One, 5th and 6th ﬂoors, Zone
1, District 5, Bucharest, Romania
GlaxoSmithKline (Ireland) Limited
Ordinary
12 Riverwalk, Citywest Business Campus, Dublin 24, Ireland
GlaxoSmithKline (Israel) Ltd
Ordinary
25 B
asel Street, PO Box 1
0283, Petach-
Tikva, 49
002, Israel
GlaxoSmithKline (Malta) Limited
Ordinary
1, First Floor
, De La Cruz Avenue, Qormi, QRM2458, Malt
a
GlaxoSmithKline (Private) Limited (ii)
Ordinary
Unit 3, 20 Anthony Road, Ms
asa, Harare, Zimbabwe
GlaxoSmithKline (Thailand) Limited
Ordinary
12th Floor W
ave Place, 55 W
ireless Road, Lumpini, Pathumwan,
Bangkok, 1
033
0, T
hailand
GlaxoSmithKline AB
Ordinary
Hemvarnsg. 9, 1
71 54, Solna, Sweden
GlaxoSmithKline AG
Ordinary
T
alstrasse 3-5, 3
053 Muenchenbuc
hsee, Switzerland
GlaxoSmithKline Angola Unipessoal Limitada (iv)
Quota
Luanda, Bairro Petrangol, Estrada de Cacuaco n ° 288, Angola
GlaxoSmithKline Argentina S.A.
Ordinary
T
ucumán 1, piso 4, Buenos Aires, C1
0
49AAA, Argentina
GlaxoSmithKline AS
Ordinary
Drammensveien 288, Oslo, N
O-0283, Norway
GlaxoSmithKline Asia Private Limited
Equity
Patiala Road, Nabha 14
7
20
1, Dist Patiala, Punjab, India
GlaxoSmithKline Australia Pty Ltd
Ordinary
1
061 Mountain Highway, Boronia V
ictoria VIC 3155, Australia
GlaxoSmithKline B.V
.
Ordinary
V
an Asch van, W
ijc
kstraat 55h, 3811 LP Amersfoort, The Netherlands,
Netherlands
GlaxoSmithKline Beteiligungs GmbH
Ordinary
Prinzregentenplatz 9, 81675, Munchen, Germany
GlaxoSmithKline Biologicals (Shanghai) Ltd.
Ordinary
277 Niudun Road, Pilot Free T
rade Zone, Shanhai, China
GlaxoSmithKline Biologicals Kft.
Ordinary
21
00 Gödöllõ, Homoki Nagy István utca 1, Hungary
GlaxoSmithKline Biologicals S.A.S.
Ordinary
637 Rue des Aulnois, Saint-Amand Les Eaux, 59230, France
GlaxoSmithKline Biologicals SA
Ordinary:
Preference
Rue de l'Institut 89 B-133
0 Rixensart, Belgium
GlaxoSmithKline Brasil Limitada
Quotas
Estrada dos B
anderiantes, 846
4, Rio de Janeiro, 22
7
83-11
0, Brazil
GlaxoSmithKline Capital Inc.
Common
W
ilmington T
rust SP Services Inc., 11
05 North Market Street, Suite 13
00,
W
ilmington DE 19
80
1, United States
GlaxoSmithKline Capital plc
Ordinary
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Caribbean Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Chile Farmaceutica Limitada
Social Capital
Avenue Andres Bello No. 2687
, Piso 19, Las Condes, Santiago, C.P
.
7550
611, Chile
GlaxoSmithKline Colombia S.A.
Ordinary
Avenida El Dorado, #69B-45/
Piso 9, Bogotá, Colombia
GlaxoSmithKline Consumer Healthcare Holdings Limited (i)
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GlaxoSmithKline Consumer Holding B.V
. (ii)
Ordinary
V
an Asch van W
ijc
kstraat 55h, 3811 LP
, Amersfoort, Netherlands
GlaxoSmithKline d.o.o.
Quotas
Zmja od Bosne broj 7
-
7a, Sarajevo, 71
000, Bosnia and Herzegovina
GlaxoSmithKline d.o.o.
Equity Capital
Ulica Damira T
omljanovica Gavrana 15, Zagreb, Croatia
GlaxoSmithKline doo Beograd
Ordinary
Omladinskih brigada 88, New Belgrade, City of Belgrade, 11
07
0, Serbia
GlaxoSmithKline Ecuador S.A.
Ordinary
Av 1
0 De Agosto N36-23
9, y Naciones Unidas, Ediﬁcio
Electroectuatoriana, 2do piso, Quito, Ecuador
GlaxoSmithKline Eesti OU
Ordinary
Lõõtsa 8a, T
allinn, 11415, Estonia
GlaxoSmithKline El Salvador S.A. de C.V
.
Ordinary
Municipio de San S
alvador
, Departamento de San S
alvador
, El Salvador
GlaxoSmithKline EO
OD
Ordinary
115 G T
s
arigradsko Shose Blvd., ﬂoor 9, Mladost Region, Soﬁa, 1
7
84,
Bulgaria
GlaxoSmithKline Export Limited
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GlaxoSmithKline Export Panama S.A.
Ordinary
Panama City
, Republic of Panama, Panama
GlaxoSmithKline Far East B.V
.
Ordinary
V
an Asc
h van W
ijckstraat 55h, 3811 LP
, Amersfoort, Netherlands
GlaxoSmithKline Finance plc
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GlaxoSmithKline GmbH & Co. KG
Partnership Capital
Prinzregentenplatz 9, 81675, Munc
hen, Germany
GlaxoSmithKline Guatemala S.A.
Ordinary
3ra. Av
. 13-
7
8 Zona 1
0, T
orre Citibank, Nivel 8, Guatemala City
,
Guatemala
Group companies
continued
Other statutory disclosures
continued
GS
K Ann
ual R
epor
t 2021
301
Strategic report
Governance and remuneration
Financial statements
Investor information
Name
Security
Registered address
Who
lly owne
d subsidi
aries
c
ontinued
GlaxoSmithKline Holding AS
Ordinary
Drammensveien 288, Oslo, N
O-0283, Norway
GlaxoSmithKline Holdings (Americas) Inc.
Common
W
ilmington T
rust SP Services Inc., 11
05 North Market Street, Suite 1300,
W
ilmington DE 19
80
1, United States
GlaxoSmithKline Holdings (One) Limited (i)
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Holdings Limited (i)
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GlaxoSmithKline Holdings Pty Ltd
Ordinary
1
0
61 Mountain Highway
, Boronia Victoria VIC 3155, Australia
GlaxoSmithKline Honduras S.A.
Ordinary
T
egucigalpa, M
DC, Honduras
GlaxoSmithKline I
HC Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Ilaclari Sanayi ve Ticaret A.S.
Nominative
Büyükdere Caddesi No. 17
3, 1.Levent Plaza B Blok, 1.Levent, Istanbul,
343
94, T
urkey
GlaxoSmithKline Inc.
Class A Common;
Class C Preference
7
333 Mississauga Road North, Mississ
auga Ontario L5N 6L4, Canada
GlaxoSmithKline Insurance Ltd
Ordinary
19 Par-La-Ville Road, Hamilton, HM11, Bermuda
GlaxoSmithKline Intellectual Property (No.2) Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Intellectual Property Development Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Intellectual Property Holdings Limited
A Ordinary;
B Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GlaxoSmithKline Intellectual Property Limited
Deferred;
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GlaxoSmithKline Intellectual Property Management Limited
Ordinary
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Investigación y Desarrollo, S.L.
Ordinary
Severo Ochoa 2 Parque T
ecnológico de Madrid, T
res Cantos, 28
7
60,
Madrid, Spain
GlaxoSmithKline Investment Holdings Limited (In Liquidation)
Ordinary
55 Baker Street, London, W1U 7E
U, United Kingdom
GlaxoSmithKline Investment Services Limited (In Liquidation)
Ordinary
55 Baker Street, London, W1U 7E
U, United Kingdom
GlaxoSmithKline Investments Pty Ltd
Ordinary
1
061 Mount
ain Highway
, Boronia V
ictoria VIC 3155, Australia
GlaxoSmithKline K.K.
Ordinary
1-8-1 Akas
aka Minato-ku, T
okyo, Japan
GlaxoSmithKline Korea Limited
Ordinary
9F LS Y
ongsan T
ower
, 92 Hangang-daero, Y
ongs
an-gu, Seoul, 04386,
Korea, Republic of
GlaxoSmithKline Latin America, S.A.
Ordinary
Panama City, Republic of Panama, Panama
GlaxoSmithKline Latvia SIA
Ordinary
Duntes iela 3, Riga, Latvia
GlaxoSmithKline Lietuva UAB
Ordinary
Ukmerges st. 120, Vilnius, L
T
-081
05, Lithuania
GlaxoSmithKline Limited
Ordinary
23/
F
., T
ower 6, The Gateway
, 9 Canton Road, T
simshatsui, Kowloon,
Hong Kong
GlaxoSmithKline LL
C
LL
C Interests
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GlaxoSmithKline Manufacturing SpA
Ordinary
Viale dell’Agricoltura 7
, 37135, V
erona, Italy
GlaxoSmithKline Maroc S.A.
Ordinary
42-44 Angle Bd, Rachidi et Abou Hamed El Glaza, Casablanca, Morocco
GlaxoSmithKline Medical and Healthcare Products Limited
Ordinary
H-1124, Csorsz utca 43, Budapest, Hungary
GlaxoSmithKline Mercury Limited (i)
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Mexico S.A. de C.V
.
Ordinary A:
Ordinary B
Calzada, Mexico-
X
ochimilco 4900, Colonia S
an Lorenzo, Huipulco,
Delegacion Tlalpan, 143
7
0, Mexico
GlaxoSmithKline NZ Limited
Ordinary
Level 2 E.2, Generator @GridAKL, 12 Madden Street, Wynyard Quarter
,
Auckland, 1
0
1
0, New Zealand
GlaxoSmithKline Oy
Ordinary
Piispansilta 9A, P
.O. B
o
x 24, Espoo, FI
N-02230, Finland
GlaxoSmithKline Peru S.A.
Ordinary
Av
. Javier Prado Oeste, 995, San Isidro, LI
MA 27
, Peru
GlaxoSmithKline Pharma A/S
Ordinary
Nyk
aer 68, DK
-2605, Brondby, Denmark
GlaxoSmithKline Pharma GmbH
Ordinary
W
agenseilgasse 3, Euro Plaza, Gebäude 5i, 4.Stoc
k, W
ien, 1120
GlaxoSmithKline Pharmaceutical Kenya Limited
Ordinary
Likoni Road, Nairobi, 78392 - 00507
, Kenya
GlaxoSmithKline Pharmaceutical Nigeria Limited
Ordinary
1 Industrial Avenue, Ilupeju, Ikeja, Lagos, PM B 21218, Nigeria
GlaxoSmithKline Pharmaceutical Sdn Bhd
Ordinary
Level 6, Quill 9, 112 Jalan Prof. Khoo Kay Kim, Petaling Jaya, 46300
Selangor
, Malaysia
GlaxoSmithKline Pharmaceuticals (Pvt) Ltd
Ordinary
121 Galle Road, Kaldemulla, Moratuwa, Sri Lanka
GlaxoSmithKline Pharmaceuticals Costa Rica S.A.
Ordinary
Autopista Florencia del Castillo, kilómetro siete, Oﬁcentro T
erraCampus,
ediﬁcio uno, cuarto piso, San Diego, Cart
ago, 30302, Costa Rica
GlaxoSmithKline Pharmaceuticals S.A.
Ordinary A;
Ordinary B;
Ordinary C;
Ordinary D
Ul. Grunwaldzka 18
9, 60-322, Poznan, P
oland
GlaxoSmithKline Pharmaceuticals S.A.
Ordinary
Site Apollo, Avenue Pascal 2-4-6, W
avre, 1300, Belgium
GlaxoSmithKline Pharmaceuticals Ukraine LL
C
Chartered Capital
Pavla T
yc
hyny avenue, 1-V
, Kiev, 02152, Ukraine
GlaxoSmithKline Philippines Inc
Ordinary
23rd Floor
, The Finance Centre, 26th Street Corner 9th A
venue, Bonifacio
Global City
, T
aguig City, 1634, Philippines
GlaxoSmithKline Pte Ltd
Ordinary
23 Rochester Park, 13923
4, Singapore
GlaxoSmithKline Puerto Rico, Inc.
Common
T
he Prentice-Hall Corporation System, Puerto Rico, Inc, c/o Fast
Solutions, LL
C, 252 P
once de Leon Avenue, Floor 20, San Juan, 00918,
Puerto Rico
Group companies
continued
Other statutory disclosures
continued
3
02
GS
K Ann
ual R
epor
t 2021
Name
Security
Registered address
Who
lly owne
d subsidi
aries
c
ontinued
GlaxoSmithKline Republica Dominicana S.A.
Ordinary
Blue Mall T
ower
, Floor 23 Ave., W
inston Churc
hill 95, Santo Domingo,
Dominican Republic
GlaxoSmithKline Research & Development Limited
Ordinary
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline S.A.
Ordinary
Severo Ochoa, 2, Parque T
ecnológico de Madrid, T
res Cantos, 28
7
60,
Madrid, Spain
GlaxoSmithKline S.p.A.
Ordinary
Viale dell’Agricoltura 7
, 37135, V
erona, It
aly
GlaxoSmithKline s.r
.o.
Ordinary
Hvezdova 1
7
34/2c, Prague, 4 140 00, Czech Republic
GlaxoSmithKline Services GmbH & Co. KG
Partnership Capit
al
Prinzregentenplatz 9, 81675, Munc
hen, Germany
GlaxoSmithKline Services Unlimited (i)
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Single Member A.E.B.E.
Ordinary
266 Kiﬁssias Avenue, Halandri, Athens, 152 32, Greece
GlaxoSmithKline SL LL
C
LL
C Interests
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GlaxoSmithKline SL LP (ii) (viii)
Partnership
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GlaxoSmithKline Slovakia s.r
.o.
Ordinary
Galvaniho 7
/A, Bratislava, 821 04, Slovakia
GlaxoSmithKline South Africa (Pty) Limited
Ordinary
Flushing Meadows Building, The Campus, 5
7 Sloane Street, Bryanston
2021, South Africa
GlaxoSmithKline T
rading Services Limited (iii)
Ordinary
12 Riverwalk, Citywest Business Campus, Dublin 24, Ireland
GlaxoSmithKline T
unisia S.A.R.L.
Ordinary
Immeuble R
EG
US, Lot B1
7
, Centre Urbain Nord, T
unis, T
unisia
GlaxoSmithKline U
K Limited
Ordinary
980 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Uruguay S.A.
Registered Provisory Stock
Salto 11
05, CP 11.200 Montevideo, Uruguay
GlaxoSmithKline US T
rading Limited
Ordinary
980 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline V
enezuela C.A.
Ordinary
Urbanizacion La T
rinidad, Calle luis De Camoems, Edif No 115-117
Apatado Posta, Caracas, 1
01
0, V
enezuela, Bolivarian Republic of
GlaxoSmithKline V
ietnam Limited Liability Company (ii) (iv)
Equity Capital
The Metropolitan, 235 Dong Khoi Street, District 1, 7th Floor Unit 70
1, Ho
Chi Minh City
, V
ietnam
GlycoV
axyn A
G (iv)
Common;
Preferred A;
Preferred B;
Preferred C
Grabenstrasse 3, 8952 Schlieren, Switzerland
Groupe GlaxoSmithKline
Ordinary
23 rue François Jacob, 92500, Rueil-Malmaison, France
GS
K Australia NVD Pty Ltd (ii) (iv)
Ordinary
1
061 Mountain Highway, Boronia Victoria VIC 3155, Australia
GS
K Bangladesh Private Limited
Ordinary
Sweden T
ower, 1, Harinnachala, K
onabari, Gazipur
, Bangladesh
GS
K Biopharma Argentina S.A.
Nominative Non Endorseable Ordinary
T
ucumán 1, piso 4, Buenos Aires, C1
049AAA, Argentina
GS
K Business Service Centre Sdn Bhd
Ordinary
Level 6, Quill 9, 112 Jalan Prof. Khoo Kay Kim, Petaling Jaya,, 46300
Selangor
, Malaysia
GS
K Capital B.V
. (iii) (v)
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GS
K Capital K.K.
Ordinary
1-8-1 Akasak
a Minato-ku, T
okyo, Japan
GS
K Commercial Sp. z o.o.
Ordinary
ul. Rzymowskiego 53, 02-697
, W
arsaw, P
oland
GS
K d.o.o., Ljubljana
Ordinary
Ameriška ulica 8,, Ljubljana, 1
000, Slovenia
GS
K Enterprise Management Co, Ltd
Ordinary
Floor 4, 18 Lane 999 Huanke Road, No. 135
8 Zhongke Road, Shanghai,
China
GS
K Equity Investments, Limited
Units
Corporation Service Company
, 2595 Interstate Drive, Suite 1
03,
Harrisburg P
A 1
711
0, United States
GS
K Finance (No 2) Limited
Ordinary
980 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K Finance (No.3) plc
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GS
K India Global Services Private Limited
Equity
Level 1, 2 & 3 Luxor North T
ower, Bagmane Capital Business Park Outer
Ring Road, Bangalore, Karnat
aka, 560037
, India
GS
K International Holding and Finance BV
Ordinary
V
an Asch van W
ijckstraat 55h, 3811 LP
, Amersfoort, Netherlands
GS
K Kazakhstan LLP
Participation Interest
273, Furmanov Street, Almaty
, Medeu District, 050059, Kazakhstan
GS
K Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K Pharma V
ietnam Company Limited
Chartered Capital
Unit 702/7
03 7th Floor
, The Metropolitan T
ower
, 235 Dong Khoi Street,
Ben Nghe W
ard, District 1, Ho Chi Minh, V
ietnam
GS
K Pharmaceutical T
rading S.A. (ii) (iv)
Ordinary
Bucharest, 1-5 Costache Negri Street, Opera Center One, 5th ﬂoor
,
discussions room 0
1, District 5, Romania
GS
K PSC Poland sp. z o.o.
Equal and indivisible shares
ul. Grunwaldzka 189, Poznań, 60-322, Pol
GS
K Services Sp z o.o.
Ordinary
Ul. Grunwaldzka 18
9, 60-322, Poznan, P
oland
GS
K V
accines BV
Ordinary
Hullenbergweg 85, 11
01 CL, Amsterdam, Netherlands
GS
K V
accines GmbH
Ordinary
Emil-von-Behring-Str
.
76, 35041 Marburg, Germany
GS
K V
accines Institute for Global Health S.r.l.
Quotas
V
ia Fiorentina 1, 531
00, Siena, Italy
GS
K V
accines S.r.l.
Quotas
V
ia Fiorentina 1, 531
00, Siena, Italy
GS
K V
accines V
ertriebs GmbH (ii)
Ordinary
Rudolf-Diesel-Ring 27
, 83607
, Holzkirchen, Germany
HG
S France S.a.r
.l. (ii) (iv)
Ordinary
52-54, Rue de la Belle Feuille, Boulogne-Billancourt, 921
00, France
Human Genome Sciences, Inc.
Common
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
I
D Biomedical Corporation of Quebec
Common
2323, boul. Du Parc T
echnologique, Québec Québec G1P 4R8, Canada
Group companies
continued
Other statutory disclosures
continued
GS
K Ann
ual R
epor
t 2021
303
Strategic report
Governance and remuneration
Financial statements
Investor information
Name
Security
Registered address
Wholly
owned subsidiaries
continued
Instituto Luso Farmaco, Limitada (ii)
Quotas
Rua Dr Antonio Loureiro B
orges No 3, Arquiparque, Miraﬂores,
1495-131, Algés, Portugal
InterPharma Dienstleistungen GmbH (ii)
Quotas
W
agenseilgasse 3, Euro Plaza, Gebäude I, 4. Stock, A-1120, Vienna,
Austria
J&J T
echnologies, L
C
LLC Interests
Corporation Service Company, 1
00 Shockoe Slip, 2nd Floor
, Ric
hmond
V
A 23219,, United States
JS
C GlaxoSmithKline T
rading
Ordinary
Leningradskiy Prospect 37A, Building 4, Floor 3, Premises XV
, Room 1,
12516
7
, Moscow, Russian Federation
Laboratoire GlaxoSmithKline
Ordinary
23 rue François Jacob, 92500, Rueil-Malmaison, France
Laboratoire Pharmaceutique Algérien LP
A Production SP
A
Ordinary
Zone Industrielle Est, B
oudouaou, Boumerdes, Algeria
Laboratoire Pharmaceutique Algérien SP
A
Ordinary
Zone Industrielle Est, Boudouaou, B
oumerdes, Algeria
Laboratoires Paucourt (ii)
Ordinary
23 rue François Jacob, 92500, Rueil-Malmaison, France
Laboratoires Saint-Germain (ii)
Ordinary
23 rue François Jacob, 92500, Rueil-Malmaison, France
Laboratorios Dermatologicos Darier
, S.A de C.V
.
Ordinary A;
Ordinary B
Calzada Mexico Xoc
himilco, 49
00 San Lorenzo Huipulco, District Federal
Mexico, 143
7
0, Mexico
Laboratórios Farmaceuticos Stiefel (Portugal) L
TDA (ii)
Ordinary
Rua Dr Antonio Loureiro B
orges No 3, Arquiparque, Miraﬂores,
1495-131, Algés, Portugal
Laboratorios Stiefel de V
enezuela SA
Ordinary
Calle Luis de Camoens, Ediﬁcio GlaxoSmithKline, No. 115-117
, Urb. La
T
rinidad, Caracas, Venezuela, Bolivarian Republic of
Laboratorios Stiefel Ltda.
Ordinary
Rua Professor Joao Cavalheiro Salem, no.1
0
77
, B
airro de Bonsucesso,
Municipality of Guarulhos, Sao Paulo, C
EP 07
243-580, Brazil
Laboratorios W
ellcome De P
ortugal Limitada (ii)
Quota
Rua Dr Antonio Loureiro Borges No 3, Arquiparque, Miraﬂores,
1495-131, Alges, Portugal
Mixis Genetics Limited (In Liquidation)
Ordinary
B
DO LLP
, 5 T
emple Square T
emple Street, Liverpool, L2 5RH
Montrose Pharma Company Limited (ii) (iv)
Ordinary Quota
H-1124, Csorsz utca 43, Budapest, Hungary
Penn Labs Inc. (ii)
Common
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Setﬁrst Limited
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
Sitari Pharma, Inc.
Common Stock
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Smith Kline & French P
ortuguesa-Produtos Farmaceuticos,
LDA (ii)
Ordinary
Rua Dr Antonio Loureiro B
orges No 3, Arquiparque, Miraﬂores,
1495-131, Alges, Portugal
SmithKline Beecham (Bangladesh) Private Limited (ii)
Ordinary
House-2/A, Road-138,Gulshan-1, Dhaka, 1212, B
angladesh
SmithKline Beecham (Cork) Limited
Ordinary
12 Riverwalk, Citywest Business Campus, Dublin 24, Ireland
SmithKline Beecham (Manufacturing) Limited (In Liquidation)
Ordinary
B
DO, Beax Lane House, Mercer Street, Lower, D02 DH60, Dublin,
D02 DH6
0, Ireland
SmithKline Beecham (S
WG) Limited (In Liquidation)
Ordinary
BD
O LLP
, 5 T
emple Square T
emple Street, Liverpool, L2 5R
H
SmithKline Beecham Egypt L.L.C.
Quotas
Amoun Street, El Salam City, Cairo, Egypt
SmithKline Beecham Farma, S.A.
Ordinary
Severo Ochoa, 2, Parque T
ecnologico de Madrid, T
res Cantos, 287
60,
Madrid, Spain
SmithKline Beecham Limited
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
SmithKline Beecham P
ension Plan T
rustee Limited (ii)
Ordinary
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
SmithKline Beecham P
ension T
rustees Limited (In Liquidation)
Ordinary
55 Baker Street, London, W1U 7E
U, United Kingdom
SmithKline Beecham Pharma GmbH & Co K
G
Partnership Capital
Prinzregentenplatz 9, 81675, Munc
hen, Germany
SmithKline Beecham Pharma V
erwaltungs GmbH
Ordinary
Prinzregentenplatz 9, 81675, Munchen, Germany
SmithKline Beecham Pharmaceuticals (Pty) Limited (ii) (iv)
Ordinary
Flushing Meadows Building, The Campus, 5
7 Sloane Street, Bryanston
2021, South Africa
SmithKline Beecham Pharmaceuticals Co.
Common
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
SmithKline Beecham P
ort Louis Limited (In Liquidation)
Ordinary
C/o CI
M Corporate Services Ltd, Les Cascades Building, Edith Cavell
Street, Port Louis, Mauritius
SmithKline Beecham Senior Executive P
ension Plan T
rustee
Limited (ii)
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
Stiefel Dominicana, S.R.L. (ii) (iv)
Ordinary
Ave. Lope de V
ega #29, T
orre NovoCentro, Local 4
06, Santo Domingo,
Dominican Republic
Stiefel Farma, S.A.
Ordinary
Severo Ochoa, 2, Parque T
ecnologico de Madrid, T
res Cantos, 28
7
60,
Madrid, Spain
Stiefel GmbH & Co. KG
Partnership Capital
Prinzregentenplatz 9, 81675, Munchen, Germany
Stiefel India Private Limited
Equity
1, Battery House, Bhulabhai Des
ai Raod, Mumbai, Maharashtra,
400026, India
Stiefel Laboratories (Maidenhead) Ltd (In Liquidation)
Ordinary
B
DO LLP
, 5 T
emple Square T
emple Street, Liverpool, L2 5R
H
Stiefel Laboratories Legacy (Ireland) Limited
Ordinary
Unit 2 Building 25
00, A
venue 2000 Cork Airport Business Park, Cork,
Ireland
Stiefel Laboratories Limited (in liquidation since year end)
Ordinary
55 B
aker Street, London, W1U 7EU, United Kingdom
Stiefel Laboratories Pte Limited
Ordinary
1 Pioneer Sector, 628413, Singapore
Group companies
continued
Other statutory disclosures
continued
3
04
GS
K Ann
ual R
epor
t 2021
Name
Security
Registered address
Wholly
owned subsidiaries
continued
Stiefel Laboratories, Inc.
Common
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Stiefel Maroc SAR
L (ii) (iv)
Ordinary
275 Boulevard Zerktouni, Casablanca, Morocco
Stiefel Research (Australia) Holdings Pty Ltd
Ordinary
1
0
61 Mountain Highway
, Boronia Victoria VIC 3155, Australia
Stiefel Research Australia Pty Ltd
Ordinary
1
061 Mount
ain Highway
, Boronia V
ictoria VIC 3155, Australia
Stiefel W
est Coast LL
C
LL
C Interests
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Strebor Inc.
Common
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
T
esaro Bio GmbH (In Liquidation)
Ordinary
Poststrasse 6, 6300 Zug, Switzerland
T
esaro Bio Netherlands B.V
Ordinary
Joop Geesinkweg 901, 1114 AB, Amsterdam-Duivendrecht, Netherlands
T
esaro Bio Sweden AB
Common
c/o BDO Malardalen AB, Sk
att Box 24193, 1
04 51, Stockholm, Sweden
T
esaro Development, Ltd.
Ordinary
Clarendon House, 2 Church Street, Hamilton H
M11, Bermuda
T
esaro, Inc.
Common
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
The Sydney Ross Co. (ii)
Ordinary
Corporation Service Company
, Princeton South Corporate Center
, Suite
160, 1
00 Charles Ewing Blvd, Ewing NJ 0
8628, United States
UC
B Pharma Asia Paciﬁc Sdn Bhd (ii)
Ordinary
12th Floor, Menara Symphony
, No. 5, Jalan Prof. Khoo Kay Kim,, Seksyen
13, 46200 Petaling Jaya, Malaysia
W
ellcome Consumer Healthcare Limited (ii)
Ordinary
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
W
ellcome Consumer Products Limited (in liquidation
since year end)
Ordinary
B
DO LLP
, 5 T
emple Square T
emple Street, Liverpool, L2 5RH
W
ellcome Developments Pty Ltd (ii) (iv)
Ordinary
1
0
61 Mountain Highway
, Boronia Victoria VIC 3155, Australia
W
ellcome Limited
Ordinary
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
W
ellcome Operations Pty Ltd (ii) (iv)
Ordinary
1
0
61 Mountain Highway
, Boronia Victoria VIC 3155, Australia
Group companies
continued
Other statutory disclosures
continued
Name
Security
Effective %
Ownership
Registered address
Sub
sidiar
ies whe
re the e
ff
ect
ive inte
rest i
s less t
han 1
0
0%
Alacer Corp.
Common
68
Corporate Service Company d/b/a C
SC - Lawyers Incorporating ,
Service, 271
0 Gateway Oaks Drive, Suite 150N , Sacramento, California
95833-35
05, United States
Amoun Pharmaceutical Industries Co. S.A.E.
New Monet
ary Shares
(99.5%)
9
0
.7
El Salam City 114
91, PO Box 3001, Cairo, Egypt
Beecham Enterprises Inc. (ii)
Common
5
9.8
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Biddle Sawyer Limited
Equity
68
252 Dr Annie Besant Road, Mumbai, 4
00030, India
Block Drug Company
, Inc.
Common
68
Corporation Service Company
, Princeton South Corporate Center
, Suite
160, 1
00 Charles Ewing Blvd, Ewing NJ 0
8628, United States
Block Drug Corporation (ii)
Common
68
Corporation Service Company, Princeton South Corporate Center
, Suite
160, 1
00 Charles Ewing Blvd, Ewing NJ 0
8628, United States
British Pharma Group Limited (i)
Capital (50%)
50
980 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
Consumer Healthcare Holdings Limited
Ordinary
68
980 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
Consumer Healthcare Intermediate Holdings Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
Duncan Consumer Healthcare Philippines Inc
Common
68
23rd Floor, The Finance Centre, 26th Street Corner 9th A
venue, Bonifacio
Global City
, T
aguig City, 1634, Philippines
Ex-Lax, Inc.
Common
68
The Prentice Hall Corporation System, Puerto Rico, Inc., c/o, Citi T
ower,
252 Ponce de Leon A
venue, Floor 20, San Juan, 00
918, Puerto Rico
Ferrosan ApS
A Shares;
B Shares
68
Delt
a Park 3
7
, 2665, Vallensbæk Strand, Denmark
Ferrosan International ApS
Ordinary
68
Delta Park 3
7
, 26
65, V
allensbæk Strand, Denmark
Ferrosan S.R.L.
Registered Capital
68
17
8/C Calea T
urzii, Cluj-Napoca, Cluj County
, Romania
Galvani Bioelectronics Inc.
Common
55
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Galvani Bioelectronics Limited
A Ordinary;
B Ordinary (0%)
55
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
Glaxo Saudi Arabia Limited
Ordinary
75
PO B
o
x 2261
7
, Area No 56 to 73, W
arehouse City
, First Stage Al
Khomrah, Jeddah 21416, Saudi Arabia
Glaxo W
ellcome Ceylon Limited
Ordinary;
Ordinary B
6
7.
8
121 Galle Road, Kaldemulla, Moratuwa, Sri Lank
a
GlaxoSmithKline (Suzhou) T
rading Co., Ltd
Registered Capital
68
No.699 Gangpu Road, Wusongjiang Science and T
echnology Industrial
Park, W
uzhong Economic & T
echnical Development Zone, Suzhou, China
GlaxoSmithKline (Tianjin) Co. Ltd
Ordinary
90
No. 65, the Fifth Avenue, T
ai Feng Industrial Park, Tianjin Economic and
T
echnolog, Tianjin, 300457
, China
GlaxoSmithKline Algérie S.P
.A.
Ordinary
99.99
Zone Industrielle Est, B
oudouaou, W
ilaya de Boumerdes, Algeria
GlaxoSmithKline Brasil Produtos para Consumo
e Saude Ltda
Quotas
68
Av das Americas, 3500, 4th ﬂoor
, rooms 407
-420, , Rio de Janeiro, RJ,
22621-000, Brazil
GS
K Ann
ual R
epor
t 2021
305
Strategic report
Governance and remuneration
Financial statements
Investor information
Name
Security
Effective %
Ownership
Registered address
Sub
sidiar
ies whe
re the e
ff
ect
ive inte
rest i
s less t
han 1
0
0%
continued
GlaxoSmithKline Consumer Healthcare (China) Co. Ltd
Ordinary
68
Room 50
6, No. 1 Shen’gang Boulevard, Lin-gang Special Area of China
Pilot Free T
rade Z, Shanghai, Shanghai, 200000, China
GlaxoSmithKline Consumer Healthcare (Hong Kong) Limited
Ordinary
68
23/F
., T
ower 6, T
he Gateway
, 9 Canton Road, T
simshatsui, Kowloon,
Hong Kong
GlaxoSmithKline Consumer Healthcare (Ireland) Limited
Ordinary
68
12 Riverwalk, Citywest Business Campus, Dublin 24, Ireland
GlaxoSmithKline Consumer Healthcare (Overseas) Limited
Ordinary
68
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Consumer Healthcare (Thailand) Limited
Ordinary
68
13th Floor
, Unit 13.05 and 13.06 W
ave Place, 55 W
ireless Road,
Lumpini, Pathumwan, Bangkok, 1
033
0, T
hailand
GlaxoSmithKline Consumer Healthcare (U
K) IP Limited (iv)
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Consumer Healthcare (U
K) T
rading Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Consumer Healthcare (US) I
P LL
C
LL
C Interests
68
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GlaxoSmithKline Consumer Healthcare AB
Ordinary
68
Hemvärnsgatan 9, P
.O. B
o
x 516, 169 29, Solna, Sweden
GlaxoSmithKline Consumer Healthcare Aps
Ordinary
68
Delt
a Park 3
7
, 2665, Vallensbæk Strand, Denmark
GlaxoSmithKline Consumer Healthcare Australia Pty Ltd
Ordinary
68
82 Hughes Avenue, Ermington New South W
ales N
S
W 2115, Australia
GlaxoSmithKline Consumer Healthcare B.V
.
Ordinary
68
V
an Asc
h van W
ijckstraat 55G, 3811 LP
, Amersfoort, Netherlands
GlaxoSmithKline Consumer Healthcare Colombia SAS
Ordinary
68
Carrera 7 No. 113 - 43 Piso 4, Colombia
GlaxoSmithKline Consumer Healthcare Czech Republic s.r
.o.
Ordinary
68
Hvezdova 17
34/2c, Prague, 4 140 00, Czech Republic
GlaxoSmithKline Consumer Healthcare Finance Limited
Ordinary
68
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Consumer Healthcare Finance No.2 Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Consumer Healthcare Finland Oy
Ordinary
68
Piispansilt
a 9A, Fin-02230, Espoo, Finland
GlaxoSmithKline Consumer Healthcare GmbH
Ordinary
68
W
agenseilgasse 3, Euro Plaza, Gebäude I, 4. Stock, A-1120, Vienna,
Austria
GlaxoSmithKline Consumer Healthcare GmbH & Co. KG
Partnership Capit
al
68
B
arthstr
. 4, 80339, München, Germany
GlaxoSmithKline Consumer Healthcare Hellas Single
Member Societe Anonyme
Ordinary
68
27
4 Kiﬁssias Avenue Halandri, Athens, 152 32, Greece
GlaxoSmithKline Consumer Healthcare Holdings (No.2)
Limited
A;
B (0%);
Preference
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Consumer Healthcare Holdings (US) LL
C
LL
C Interests
68
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GlaxoSmithKline Consumer Healthcare Investments
(Ireland) (No 3) Limited (iii) (In Liquidation)
Ordinary
68
Knockbrac
k, Dungarvan, Co W
aterford, X35 R
Y7
6, Ireland
GlaxoSmithKline Consumer Healthcare Investments
(Ireland) (No.2) Unlimited Company (iii) (In Liquidation)
Ordinary
68
Knockbrac
k, Dungarvan, Co W
aterford, X35 R
Y7
6, Ireland
GlaxoSmithKline Consumer Healthcare Japan K.K.
Ordinary
68
1-8-1 Ak
asaka Minato-ku, T
okyo, Japan
GlaxoSmithKline Consumer Healthcare Korea Co., Ltd.
Ordinary
68
9F LS Y
ongsan T
ower, 92 Hangang-daero, Y
ongs
an-gu, Seoul, 0438
6,
Korea, Republic of
GlaxoSmithKline Consumer Healthcare L.L.C.
LL
C Interests
68
Corporation Service Company
, 2595 Interstate Drive Suite 1
03,
Harrisburg P
A 1
711
0, United States
GlaxoSmithKline Consumer Healthcare Mexico, S. De R.L.
de C.V
.
Ordinary
68
Boulevard Adolfo Ruiz Cortines No. 37
20, T
orre 3 Piso 11, Colonia
Jardines del Pedregal, Alcaldía Alvaro Obregón, Ciudad de México , C.P
.
0
1900, Mexico
GlaxoSmithKline Consumer Healthcare New Zealand U
L
C
Ordinary
68
Level 2 E.2 12 Madden Street, Auc
kland Central, Auckland, 1
0
1
0,
New Zealand
GlaxoSmithKline Consumer Healthcare Norway AS
Ordinary
68
Drammensveien 28
8, L
ys
aker
, 1326, Norway
GlaxoSmithKline Consumer Healthcare Pakistan Limited
Ordinary (85.8%)
5
8.3
The Sykes Building, 35 Dockyard Road, W
est Wharf, Karachi, 7
4000,
Pakistan
GlaxoSmithKline Consumer Healthcare Philippines Inc
Common
68
23rd Floor, The Finance Centre, 26th Street Corner 9th A
venue, Bonifacio
Global City
, T
aguig City, 1634, Philippines
GlaxoSmithKline Consumer Healthcare Pte. Ltd.
Ordinary
68
23 Rochester Park, 13923
4, Singapore
GlaxoSmithKline Consumer Healthcare S.A.
Ordinary
68
Site Apollo, A
venue Pascal 2-4-6, W
avre, 1300, Belgium
GlaxoSmithKline Consumer Healthcare S.A.
Ordinary
68
Severo Oc
hoa, 2, Parque T
ecnológico de Madrid, T
res Cantos, 28
7
60,
Madrid, Spain
GlaxoSmithKline Consumer Healthcare S.r
.l
Ordinary
68
V
ia Zambeletti snc, Baranzate, 20021, Milan, Italy
GlaxoSmithKline Consumer Healthcare Saudi Limited
Ordinary
68
603 Salamah T
ower
, 6th Floor
, Madinah Road, Al-S
alamah District,
Jeddah 21425, Saudi Arabia
GlaxoSmithKline Consumer Healthcare Sdn. Bhd.
Ordinary
68
Lot 8
9, Jalan Enggang,, Ampang / Hulu Kelang Industrial Estate, Selangor
Darul Ehsan, 6
8000 Ampang, Malaysia
GlaxoSmithKline Consumer Healthcare Slovakia s. r
. o.
Ownership Interest
68
Galvaniho 7
/
A, Bratislava, 821 04, Slovakia
GlaxoSmithKline Consumer Healthcare South Africa (Pty)
Ltd
Ordinary
68
Flushing Meadows Building, The Campus, 5
7 Sloane Street, Bryanston
2021, South Africa
GlaxoSmithKline Consumer Healthcare Sp.z.o.o.
Ordinary
68
Ul. Grunwaldzka 18
9, 60-322, Poznan, P
oland
GlaxoSmithKline Consumer Healthcare SR
L
Ordinary
68
1-5 Costache Negri Street, Opera Center One, 6th ﬂoor (Zone 2), District
5, Bucharest, Romania
Group companies
continued
Other statutory disclosures
continued
3
06
GS
K Ann
ual R
epor
t 2021
Group companies
continued
Name
Security
Effective %
Ownership
Registered address
Sub
sidiar
ies whe
re the e
ff
ect
ive inte
rest i
s less t
han 1
0
0%
continued
GlaxoSmithKline Consumer Healthcare U
L
C /
GlaxoSmithKline Soins De Sante Aux Consommateurs S
RI
A Class Preference;
Common
68
5
95 Burrard Street, Suite 2600 Three Bentall Centre, P
.O. Box 49314
V
ancouver BC V7X 1L3, Canada
GlaxoSmithKline Consumer Healthcare V
ietnam Company
Limited (ii)
Charter Capital
68
Floor 16, Metropolitan, 235 Dong Khoi, Ben Nghe W
ard, District 1, Ho
Chi Minh City
, V
ietnam
GlaxoSmithKline Consumer Healthcare, L.P
.
Partnership Capit
al
59.8
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GlaxoSmithKline Consumer Healthcare, Produtos para a
Saude e Higiene, Lda
Ordinary Quota
68
Rua Dr Antonio Loureiro B
orges No 3, Arquiparque, Miraﬂores,
1495-131, Algés, Portugal
GlaxoSmithKline Consumer Nigeria plc (vi)
Ordinary
46.4
1 Industrial Avenue, Ilupeju, Ikeja, Lagos, PM B 21218, Nigeria
GlaxoSmithKline Consumer Private Limited
Equity
68
Patiala Road, Nabha 14
7
20
1, Dist Patiala, Punjab, India
GlaxoSmithKline Consumer T
rading Services Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GlaxoSmithKline Costa Rica S.A.
Ordinary
68
S
an José 300 Este de la Rotonda Betania, Carretera a Sabanilla,
Costa Rica
GlaxoSmithKline Dungarvan Limited
Ordinary
68
Knockbrac
k, Dungarvan, Co W
aterford, X35 R
Y7
6, Ireland
GlaxoSmithKline Healthcare AO
Ordinary
68
premises I
II, Room 9, ﬂoor 6, Presnensk
aya nab. 1
0, 123112, Moscow
,
Russian Federation
GlaxoSmithKline Healthcare GmbH
Ordinary
68
B
arthstr
. 4, 80339, München, Germany
GlaxoSmithKline Healthcare Ukraine O.O.O.
Ownership Interest
68
Pavla T
ychyny avenue, 1-V
, Kiev, 02152, Ukraine
GlaxoSmithKline Limited
Cumulative Redeemable
Preference;
Ordinary
68
Likoni Road, P
O Box 7
8392, Nairobi, Kenya
GlaxoSmithKline Pakistan Limited
Ordinary
82.6
The Sykes Building, 35 Dockyard Road, W
est W
harf, Karac
hi, 7
4
000,
Pakistan
GlaxoSmithKline Panama S.A.
Non-qualiﬁed preference
shares;
Ordinary
68
Urbanizacion Industrial Juan D, Calles A Y B, Republic of Panama,
Panama
GlaxoSmithKline Paraguay S.A.
Ordinary
68
Oﬁcial Gilberto Aranda 333, Planta Alt
a casi Salvador del Mundo,
Asunción, Paraguay
GlaxoSmithKline Pharmaceuticals Limited
Equity
75
252 Dr Annie Bes
ant Road, Mumbai, 400030, India
GlaxoSmithKline S.A.E.
Ordinary
91.2
Boomerang Ofﬁce Building - Land No. 4
6, Zone (J) - 1st District, T
own
Center - 5th T
agammoe, New Cairo City, Egypt
GlaxoSmithKline Santé Grand Public
Ordinary
68
23 rue François Jacob, 92500, Rueil-Malmaison, France
GlaxoSmithKline T
echnology (T
aizhou) Co., Ltd
Ordinary
68
Room 7
08 in Building D, Phase I
I of New Drug Innovation Base, T
aizhou,
Jiangsu Province, 225300, China
GlaxoSmithKline T
uketici Sagligi Anonim Sirketi
Nominative
68
Büyükdere Caddesi No. 1
7
3, 1.Levent Plaza B Blok, 1.Levent, Istanbul,
343
94, T
urkey
GlaxoSmithKline-Consumer Kft.
Membership
68
H-1124, Csorsz utca 43, Budapest, Hungary
GS
K Canada Holding Company Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K CH Caricam Sociedad De Responsabilidad
Limitada (ii)
Participation
68
Urbanizacion Industrial Juan D, Calles A Y B, Republic of Panama,
Panama
GS
K CH Kazakhstan LLP
Charter Capit
al
68
32 A Manasa Str., Bostandyk District, Almaty, 050008, Kazakhst
an
GS
K Consumer Health, Inc.
Common
68
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GS
K Consumer Healthcare Capital NL B.V
. (iii) (v)
Shares
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K Consumer Healthcare Capital US LL
C
LLC Interests
68
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GS
K Consumer Healthcare Chile SpA
CLP Interests
68
A
v
. Andrés Bello N°2687
, 25th ﬂoor, Las Condes, Chile
GS
K Consumer Healthcare Egypt Limited
Ordinary
68
North 9
0th street, Boomerang Building, 5th District, Cairo, Egypt
GS
K Consumer Healthcare Egypt LL
C
Quotas
68
North 90th street, Boomerang Building, 5th District, Cairo, Egypt
GS
K Consumer Healthcare Export Limited
Ordinary
68
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
GS
K Consumer Healthcare Holdings (No.1) Limited
Non-voting preference
shares;
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K Consumer Healthcare Holdings (No.3) Limited
Non-voting preference
shares;
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K Consumer Healthcare Holdings (No.5) Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K Consumer Healthcare Holdings (No.6) Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
GS
K Consumer Healthcare Holdings (No.
7) Limited
Ordinary
68
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
GS
K Consumer Healthcare Holdings (US) Inc.
Common;
Preference Stock
68
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Other statutory disclosures
continued
GS
K Ann
ual R
epor
t 2021
3
07
Strategic report
Governance and remuneration
Financial statements
Investor information
Group companies
continued
Name
Security
Effective %
Ownership
Registered address
Sub
sidiar
ies whe
re the e
ff
ect
ive inte
rest i
s less t
han 1
0
0%
continued
GS
K Consumer Healthcare Holdings No. 2 LL
C (iii)
Unit
68
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GS
K Consumer Healthcare Insurance Limited
Ordinary
68
Dorey Court, Admiral Park, St Peter Port, G
Y1 4A
T
, Guernsey
GS
K Consumer Healthcare Israel Ltd (iv)
Ordinary
68
25 Basel Street, Petech T
ikva 4951
0, Israel
GS
K Consumer Healthcare Levice s.r
.o.
Ordinary
68
Priemyselny Park Gena, Ul. E. Sachsa 4-6, 934 01, Levice, Slovakia
GS
K Consumer Healthcare P
eru S.R.L
Ordinary
68
Av Jorge Bas
adre 349, piso 5, San Isidro, Lima, 05W-1
09, Peru
GS
K Consumer Healthcare SARL
Ordinary
68
Route de I'Etraz, 1197 Prangins, Switzerland
GS
K Consumer Healthcare Sc
hweiz AG
Ordinary
68
Suurstofﬁ 14, 6343, Rotkreuz, Switzerland
GS
K Consumer Healthcare Services, Inc.
Common
68
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
GS
K Consumer Healthcare Singapore Pte. Ltd.
Ordinary
68
23 Rochester Park, 13923
4, Singapore
GS
K Consumer Healthcare T
rinidad and T
obago Limited
Ordinary:
Preference
68
5th Floor Algico Plaza, 91-93 St. Vincent Street, Port of Spain, T
rinidad
and T
obago
GS
K
-Gebro Consumer Healthcare GmbH
Ordinary (6
0%)
4
0.8
B
ahnhofbic
hl 13, 6391 Fieberbrunn, Kitzbühel, Austria
Iodosan S.p.A.
Ordinary
68
Via Zambeletti snc,, Baranzate,, 20021, Milan, Italy
Kuhs GmbH
Ordinary
68
B
arthstr
. 4, 80339, München, Germany
Laboratorios V
iiV Healthcare, S.L.
Ordinary
78.3
Severo Ochoa, 2, Parque T
ecnológico de Madrid, T
res Cantos, 28
7
60,
Madrid, Spain
Modern Pharma T
rading Company L.L.C.
Quotas
9
8.2
Amoun Street, P
O Box 300
1, El Salam City, Cairo, 11491, Egypt
N.C.H. – Nutrition Consumer Health Ltd (ii)
Ordinary
68
14 Hamephalsim St, Petach Tikva, Israel
P
.T
. SmithKline Beec
ham Pharmaceuticals
Ordinary A;
Ordinary B (0%)
99
Jl. Pulobuaran Raya, Kav. II
I DD/2,3,4, Kawas
an Industri Pulogadung,
Jakart
a, 13930, Indonesia
P
.T
. Sterling Products Indonesia
A Shares;
B Shares
68
Graha Paramit
a Building, 5th F
, Jalan Denpasar Raya Blok D-2, Jakart
a,
1294
0, Indonesia
Panadol GmbH
Ordinary
68
Barthstr. 4, 80339, München, Germany
PF Consumer Healthcare 1 LL
C
Membership Interest
68
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
PF Consumer Healthcare B.V
.
Class A;
Class B
68
Van Asc
h van W
ijckstraat 55G, 3811 LP Amersfoort, Netherlands
PF Consumer Healthcare Brazil Import
adora e Distribuidora
de Medicamentos Ltda
Quota
68
Barueri, at Avenida Ceci, No.1900, Block I
II, Part 67
, T
ambore District,
São Paulo, 0
6460, Brazil
PF Consumer Healthcare Canada U
L
C/PF Soins De S
ante
SRI
Common;
Preferred
68
5
95 Burrard Street, Suite 2600 Three Bentall Centre, P
.O. Box 49314
V
ancouver BC V7X 1L3, Canada
PF Consumer Healthcare Holding B.V
.
Ordinary
68
V
an Asch van W
ijc
kstraat 55G, 3811 LP Amersfoort, Netherlands
PF Consumer Healthcare U
K Limited (In Liquidation)
Ordinary
68
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
PF Consumer Ireland Company Limited (In Liquidation)
Ordinary
68
B
DO, Beax Lane House, Mercer Street, Lower, D02 DH60, Dublin, D02
DH6
0, Ireland
PF Consumer T
aiwan LLC
Interests
68
The Corporation T
rust Company
, Corporation T
rust Center, 1209 Orange
Street, W
ilmington DE 19
80
1, United States
Pﬁzer Biotech Corporation
Ordinary (55%)
3
7.
4
24F
, No. 6
6, Sec 1, Zhong Xiao W
. Rd, T
aipei 1
00, T
aiwan
Pﬁzer Consumer Healthcare AB
Ordinary
68
V
etenskapsvagen 1
0, SE-191 9
0, Sollentuna, Sweden
Pﬁzer Consumer Healthcare GmbH
Ordinary
68
Linkstrasse 1
0, 1
07
85, Berlin, Germany
Pﬁzer Consumer Manufacturing Italy S.r.l.
Quot
a (no stock)
68
90, Via Nettunese, 04011, Aprilia (Prov
. di Latin), Italy
Pﬁzer Laboratories PF
E (Pty) Ltd.
Common
68
Flushing Meadows Building, The Campus, 5
7 Sloane Street,
Bryanston 2021, South Africa
Pﬁzer PF
E Colombia S.A.S
Common
68
Carrera 7 No. 113 - 43 Piso 4, Colombia
PH
IVCO-1 LL
C
LL
C Interests
78.3
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
PH
IVCO-2 LL
C
LL
C Interests
78.3
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
PR
ISM P
CH Limited
Non-V
oting Shares;
V
oting Shares;
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
PT Glaxo W
ellcome Indonesia
Class A;
Class B (0%)
95
J
L. Pulobuaran Raya Kav
.II
I/
DD 2,3,4 KWS. Industri, Pulogadung,
Jatinegara, Cakung, Jakart
a T
imur
, Indonesia
PT GS
K Consumer Healthcare Indonesia
Ordinary
68
Graha Paramita Building, 5th F
, Jalan Denpas
ar Raya Blok D-2,, K
uningan,
JAKART
A SE
LA
T
AN, 12940, Indonesia
PT
. Bina Dent
alindo (In Liquidation)
Ordinary
68
Gedung Graha Ganesha Lant
ai 3, Jl Raya Bekasi Km 1
7
, No5, Jakart
a
Timur 13930, Indonesia
Shionogi-V
iiV Healthcare LL
C (ii)
Common Interests
7
8.3
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Sino-American Tianjin Smith Kline & Frenc
h Laboratories
Ltd
Ordinary (55%)
3
7.
4
Cheng Lin Zhuang Industrial Zone, Dong Li District, Tianjin, 300
163,
China
SmithKline Beecham (Private) Limited
Ordinary (9
9.6%)
6
7.
8
W
orld T
rade Center
, Level 34, W
est T
ower, Ec
helon Square, Colombo 1,
Sri Lanka
Other statutory disclosures
continued
3
08
GS
K Ann
ual R
epor
t 2021
Name
Security
Effective %
Ownership
Registered address
Sub
sidiar
ies whe
re the e
ff
ect
ive inte
rest i
s less t
han 1
0
0%
continued
SmithKline Beecham Researc
h Limited
Ordinary
68
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
SmithKline Beecham S.A.
Ordinary
68
Ctra de Ajalvir Km 2.500, Alcala de Henares, 288
06, Madrid, Spain
SmithKline Beecham-Biomed O.O.O.
Participation Interest
97
Leningradskiy Prospect 3
7A, Building 4, Floor 2, Premises XIV
, Room 42,
12516
7
, Moscow, Russian Federation
Stafford-Miller (Ireland) Limited
Ordinary
68
Clocherane, Y
oughal Road, Dungarvan, Co. Waterford, Ireland
Stafford-Miller Limited (In Liquidation)
Ordinary;
Non-Cumulative Non
Redeemable Preference
68
Clocherane, Y
oughal Road, Dungarvan, Co. W
aterford, Dungarvan,
W
aterford, Ireland
Sterling Drug (Malaya) Sdn Berhad
Ordinary
68
Lot 89, Jalan Enggang, Ampang/
Hulu Kelang Industrial Estate, Selangor
Darul Ehsan, 6
8000 Ampang, Malaysia
Sterling Products International, Incorporated (ii)
Common
68
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Stiefel Consumer Healthcare (U
K) Limited
Ordinary
68
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
Stiefel Egypt LL
C (ii)
Quot
as
99
Amoun Street, PO B
o
x 300
1, El Salam City, Cairo, 11491, Egypt
Stiefel Laboratories (Ireland) Limited (In Liquidation)
Ordinary
68
B
DO, Beax Lane House, Mercer Street, Lower, D02 DH60, Dublin, D02
DH6
0, Ireland
T
reerly Health Co., Ltd
Capit
al Contribution
68
Unit 0
1A, Room 3901, No 16. East Zhujiang Road, Tianhe District,
Guangzhou City
, the PR
C, China
V
iiV Healthcare (South Africa) (Proprietary) Limited (ii); (iv)
Ordinary
78.3
Flushing Meadows Building, The Campus, 57 Sloane Street, Bryanston
2021, South Africa
V
iiV HealthCare BV
Ordinary
7
8.3
Van Asc
h van, W
ijckstraat 55h, 3811 LP Amersfoort, The Netherlands,
Netherlands
V
iiV Healthcare Company
Common
78.3
Corporation Service Company, 251 Little Falls Drive, W
ilmington DE
198
08, United States
V
iiV Healthcare Finance 1 Limited (In Liquidation)
Ordinary
78.3
55 B
aker Street, London, W1U 7EU, United Kingdom
V
iiV Healthcare Finance 2 Limited
Ordinary
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare Finance Limited
Ordinary;
Redeemable Preference
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare GmbH
Ordinary
7
8.3
Prinzregentenplatz 9, 81675, Munchen, Germany
V
iiV Healthcare GmbH
Ordinary
7
8.3
T
alstrasse 3-5, 3053 Muenchenbuc
hsee, Switzerland
V
iiV Healthcare Hong Kong Limited (ii)
Ordinary
7
8.3
23/
F T
ower 6, The Gateway
, 9 Canton Road, Harbour City
, T
simshatsui,
Kowloon, Hong K
ong
V
iiV Healthcare K.K.
Ordinary
78.3
1-8-1 Akas
aka Minato-ku, T
okyo, Japan
V
iiV Healthcare Limited
Class A;
Class B (0%);
Class C (0%);
Class D1 (0%);
Class D2 (0%);
Deferred;
Class E 5% Cumulative
Preference (0%)
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare Pty Ltd
Ordinary
7
8.3
1
0
61 Mountain Highway
, Boronia Victoria VIC 3155, Australia
V
iiV Healthcare Puerto Rico, LL
C
LL
C Interests
78.3
Centro International de Mercadeo, 90 carr. 165 T
orre 2, Suite 800,
Guaynabo, 009
68, Puerto Rico
V
iiV Healthcare S.r
.l.
Quota
7
8.3
Viale dell’Agricoltura 7
, 37135, V
erona, It
aly
V
iiV Healthcare SAS
Ordinary
7
8.3
23 rue François Jacob, 925
00, Rueil-Malmaison, France
V
iiV Healthcare sprl
Ordinary
7
8.3
Site Apollo, Avenue Pascal 2-4-6, W
avre, 1300, Belgium
V
iiV Healthcare T
rading LLC (ii)
Participation Interest
78.3
Leningradskiy Prospect 37A, Building 4, Floor 2, Premises XIV
, Room 28,
12516
7
, Moscow, Russian Federation
V
iiV Healthcare T
rading Services U
K Limited
Ordinary
7
8.3
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
V
iiV Healthcare U
K (No.3) Limited
Ordinary
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare U
K (No.4) Limited
Ordinary
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare U
K (No.5) Limited
Ordinary
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare U
K (No.6) Limited
Ordinary
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare U
K (No.
7) Limited
Ordinary
7
8.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
V
iiV Healthcare U
K Limited
Ordinary
7
8.3
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
V
iiV Healthcare U
L
C
Common
7
8.3
35
00 855-2nd Street S
W
, Calgary AB T2P 4J8, Canada
V
iiV Healthcare V
enture LL
C
LLC Interests
78.3
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
V
iiVH
IV Healthcare Unipessoal Lda
Quot
a
78.3
Rua Dr Antonio Loureiro Borges No 3, Arquiparque, Miraﬂores,
1495-131, Algés, Portugal
V
og A
U PTY L
TD (ii)
Ordinary;
Redeemable Preference
68
82 Hughes Avenue, Ermington New South W
ales N
S
W 2115, Australia
W
inster Pharmaceuticals Limited (ii)
Ordinary
46.4
2A Association Avenue, Ilupeju Industrial Estate, Lagos, PO B
o
x 3199,
Nigeria
W
yeth Pharmaceutical Co. Ltd
Registered Capital
68
4 Baodai W
est Road, Suzhou, Jiangsu Province, 215128, China
W
yeth Pharmaceuticals Company (vii)
Partnership
68
No registered address required, Puerto Rico general partnership, Contact
entity contact for any questions, Puerto Rico
Group companies
continued
Other statutory disclosures
continued
GS
K Ann
ual R
epor
t 2021
309
Strategic report
Governance and remuneration
Financial statements
Investor information
Group companies
continued
Name
Security
Effective %
Ownership
Registered address
Associa
tes
GlaxoSmithKline Landholding Company
, Inc
Common (4
0%)
39.9
23rd Floor, T
he Finance Centre, 26th Street Corner 9th Avenue, Bonifacio
Global City
, T
aguig City, 1634, Philippines
Index V
entures Life VI (Jersey) LP
Partnership Interest (25%)
25
44 Esplanade, St Helier, Jersey
, JE4 9WG, Channel Islands
Kurma Biofund II FC
PR
Partnership Interest (32.1%)
32.1
24 rue Royale, 75
008, Paris, France
Longwood Fund I, LP
Partnership Interest (35%)
35
The Prudential T
ower, Suite 1555, 800 Boylston Street, Boston, MA 0219
9
Medicxi V
entures I LP
Partnership Interest (26.2%)
26.2
4
4 Esplanade, St Helier
, Jersey
, JE4 9WG, Channel Islands
Joint V
entures
Chiron Panacea V
accines Private Limited
Equity Shares (50%)
50
7
08/718, 7th Floor
, A W
ing, Sagar T
ech Plaza, Saki Nak
a, Andheri East,
Mumbai, Maharashtra, 40007
2, India
Qualivax Pte. Limited
Ordinary (5
0%)
50
80 Robinson Road, #02-00, 0
6889
8, Singapore
Qura Therapeutics, LL
C
Units (3
9.2%)
39.2
Corporation Service Company
, 251 Little Falls Drive, W
ilmington DE
198
08, United States
Ot
her signiﬁcant holdings
Axon Therapies, Inc
Common (5%); Series A
Preference (15%)
20
315 west 36th street, New Y
ork 1
0018, Delaware, USA
Global Farm S.A.
A Shares (0%)
B Shares (0%)
C Shares (1
00%)
D Shares (0%)
E Shares (0%)
F Shares (0%)
16.
7
Cazadores de Coquimbo 2841 piso 3, Munro, Argentina
Longwood Fund I
I, LP
Partnership Interest (20%)
20
The Prudential T
ower, Suite 1555, 800 Boylston Street, Boston,
MA 02199
Sanderling V
entures VI
I, L.P
. A63
Partnership Interest (25.3%)
25.3
4
00 S. El Camino Real, Suite 1200, San Mateo, CA 944
02
SR One Capit
al Fund I-B, LP
Partnership Interest (4
4%)
44
Corporation service company
, 251 Little Falls Drive, City of W
ilmington,
County of New Castle, Delaware 198
08
Other statutory disclosures
continued
Th
e followi
ng UK su
bsid
iari
es will t
ake adva
ntage o
f the audi
t exempti
on set ou
t withi
n sect
ion 4
79A of the Co
mpan
ies Ac
t 2006
for th
e peri
od ende
d 3
1 Dec
ember 2021
. Unle
ss othe
rw
ise st
ated, th
e under
ta
king
s listed b
elow ar
e owned
, eithe
r direc
tly or
indirectly
, by
Gla
xoSmithKline plc.
Name
Security
Effective %
Ownership
Registered address
Company
Number
UK re
gist
ered su
bsidia
ries exemp
ted fro
m audit
Burroughs W
ellcome International Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
005
43
75
7
Domantis Limited
Ordinary
10
0
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
0390
7
64
3
Edinburgh Pharmaceutical Industries Limited (ii)
Ordinary;
Preference
10
0
Shewalton Road, Irvine, Ayrshire, KA11 5AP
, United Kingdom
SC00553
4
Eskaylab Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
000
99025
Glaxo W
ellcome UK Limited
Ordinary
10
0
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
00480080
Glaxochem (UK) Unlimited
Ordinary;
Ordinary B;
Ordinary C
10
0
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
042994
7
2
GlaxoSmithKline Consumer Healthcare (U
K) (No.1)
Limited
Ordinary
68
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
00753340
GlaxoSmithKline Consumer Healthcare Sri Lanka
Holdings Limited
Ordinary
68
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
9
400298
GlaxoSmithKline Intellectual Property (No.3) Limited
Ordinary
10
0
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
1148
0952
GlaxoSmithKline Intellectual Property (No.4) Limited
Ordinary
10
0
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
11
7
21880
GlaxoSmithKline Intellectual Property (No.5) Limited
Ordinary
10
0
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
119593
99
GlaxoSmithKline International Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
022983
66
GS
K Consumer Healthcare Capital UK P
L
C
Ordinary
68
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
134
81162
GS
K Consumer Healthcare Holdings (No.4) Limited
Ordinary
10
0
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
134
0
133
6
GS
K Consumer Healthcare Holdings (No.8) Limited
Ordinary
10
0
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
1343
4151
GS
K New Zealand Holding Company Limited
Ordinary
68
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
1234287
9
Montrose Fine Chemical Company Ltd
Ordinary
10
0
Shewalton Road, Irvine, Ayrshire, KA11 5AP
, United Kingdom
SC19
0635
PH
IVCO UK I
I Limited
Ordinary
7
8.3
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
069442
29
PH
IVCO UK Limited
Ordinary
78.3
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
069442
23
Smith Kline & French Laboratories Limited (iv)
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
00052207
SmithKline Beecham (Export) Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
028
60
752
SmithKline Beecham (H) Limited
Non-cumulative
Non-redeemable;
Ordinary
10
0
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
0329
6131
310
GS
K Ann
ual R
epor
t 2021
Key
(i)
Directly owned by GlaxoSmithKline plc.
(ii)
Dormant entity.
(iii)
T
ax resident in the UK.
(iv)
Entity expected to be disposed of or removed.
(v)
Incorporated in the Netherlands
(vi)
Consolidated as a subsidiary in accordance with section 1162 (4)(a) of the Companies Act 200
6 on the grounds of dominant inﬂuence.
(vii)
Principal business address in Puerto Rico.
(viii)
Exempt from the provisions of Regulations 4-6 of the Partnership (Accounts) Regulation 2008, in accordance with the exemptions noted in Regulation 7 of that Regulation.
Group companies
continued
Name
Security
Effective %
Ownership
Registered address
Company
Number
UK re
gist
ered su
bsidia
ries exemp
ted fro
m audit
c
ontinued
SmithKline Beecham (Investments) Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
003020
65
SmithKline Beecham Legacy H Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
0021
0281
SmithKline Beecham Marketing and T
echnical
Services Limited
Ordinary
10
0
980 Great West Road, Brentford, Middlesex, TW8 9GS, England
00494385
SmithKline Beecham Nominees Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
0050
3868
SmithKline Beecham Overseas Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
02552828
Stiefel Laboratories (U.K.) Ltd
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
0083116
0
T
esaro U
K Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
0
7
890847
The W
ellcome Foundation Limited
Ordinary
10
0
98
0 Great W
est Road, Brentford, Middlesex, TW8 9G
S, England
00194814
V
iiV Healthcare Overseas Limited
Ordinary
78.3
9
80 Great W
est Road, Brentford, Middlesex, TW8 9GS, England
070
273
8
5
In accordance with section 4
7
9C of the Companies Act 2006, the Company will guarantee debts and liabilities of the above U
K subsidiary undertakings. As at 31 December 2021 the
total sum of these debts and liabilities is £87
6 million (2020 – £168 million)
Other statutory disclosures
continued
GS
K Ann
ual R
epor
t 2021
3
11
Strategic report
Governance and remuneration
Financial statements
Investor information
T
erms u
sed in t
he An
nual Re
por
t
US e
quiva
lent o
r brie
f desc
ript
ion
Accelerated capital allowances
T
ax allowance in excess of depreciation arising from the purchase of ﬁxed assets that delay
the charging and payment of tax. The equivalent of tax depreciation.
American Depositary Receipt (AD
R)
Receipt evidencing title to an AD
S. Each GSK AD
R represents two Ordinary Shares.
American Depositary Shares (AD
S)
Listed on the New Y
ork Stock Exc
hange; represents two Ordinary Shares.
Basic earnings per share
B
asic income per share.
Called up share capital
Ordinary Shares, issued and fully paid.
CE
R growth
Growth at constant exchange rates.
The company
GlaxoSmithKline plc.
Currency swap
An exc
hange of two currencies, coupled with a subsequent re-exchange of those currencies,
at agreed exchange rates and dates.
Deﬁned beneﬁt plan
Pension plan with speciﬁc employee beneﬁts, often called ‘ﬁnal salary scheme’
.
Deﬁned contribution plan
P
ension plan with speciﬁc contributions and a level of pension dependent upon the growth
of the pension fund.
Derivative ﬁnancial instrument
A ﬁnancial instrument that derives its value from the price or rate of some underlying item.
Diluted earnings per share
Diluted income per share.
Employee Share Ownership Plan T
rusts
T
rusts established by the Group to s
atisfy share-based employee incentive plans.
Equity Shareholders’
funds
Shareholders’
equity
.
Finance lease
Capital lease.
Freehold
Ownership with absolute rights in perpetuity
.
The Group
GlaxoSmithKline plc and its subsidiary undertakings.
GS
K
GlaxoSmithKline plc and its subsidiary undertakings.
Hedging
The reduction of risk, normally in relation to foreign currency or interest rate movements,
by making off-setting commitments.
Intangible ﬁxed assets
Assets without physical substance, such as computer software, brands, licences, patents,
know-how and marketing rights purchased from outside parties.
Ordinary Share
A fully paid up ordinary share in the capit
al of the company
.
Proﬁt Income.
Proﬁt attributable to shareholders
Net income.
Share capital
Ordinary Shares, capital stock or common stock issued and fully paid.
Share option
Stoc
k option.
Share premium account
Additional paid-up capital or paid-in surplus (not distribut
able).
Shares in issue
The number of shares outstanding.
Subsidiary
An entity in whic
h GS
K exercises control.
T
reasury share
T
reasury stock.
T
urnover Revenue.
U
K Corporate Governance Code
As required by the U
K Listing Authority, the company has disclosed in the Annual Report how
it has applied the best practice corporate governance provisions of the Financial Reporting
Council’
s UK Corporate Governance Code.
Glossar
y of terms
3
12
GS
K Ann
ual R
epor
t 2021
202
1 Remuneration
policy
summary
1
43
Accounting principles and policies
1
72
Acquisitions
and d
isposals
22
1
Adjustments
reconciling proﬁt
after tax to opera
ting
ca
sh ﬂow
s
2
25
Affordability and a
vailabi
lity
3
6
An
nual G
ener
al Me
eting 2022
291
Approach to
tax
60
As
sets h
eld for s
ale
2
0
1
As
soci
ates an
d joint ve
nture
s
1
88
Aud
it & Ris
k Com
mit
tee Rep
or
t
1
1
1
Being a responsible
business
38
Business model
01
Ca
sh and c
as
h equiv
alent
s
20
1
Cash generation and
conv
ersion
73
CEO
’
s state
ment
05
Chairman’
s
stat
ement
03
Ch
airm
an’
s Gove
rnan
ce st
atemen
t
8
9
Chairman’
s
Remunera
tion an
nual stat
ement
1
20
Climate-rela
ted
ﬁnancial disclosure
49
Commitme
nts
2
1
6
Consolidat
ed balance
sheet
1
69
Consolidated
cash ﬂow
statemen
t
1
7
1
Consolidated in
come statemen
t
1
68
Co
nsol
idated s
tatem
ent of ch
ange
s in equ
ity
1
70
Consolidated stat
ement
of comprehensiv
e income
1
68
Consumer Healthcare
4
1
Consumer Healthcare products and
competition
27
4
Contingent
consideration
liabilities
21
5
Contingent
liabilities
2
1
6
Corporate governance
82
Corporate Responsi
bility Committee Repo
rt
1
04
Cr
itic
al acc
ount
ing jud
geme
nts and key s
ourc
es
of e
stimat
ion un
cer
tai
nty
1
77
Critical accountin
g policies
8
0
Data and
engagement
39
Di
recto
rs and s
enio
r mana
geme
nt
1
4
1
Directors’ int
erests in shares
1
40
Directors’
report
1
1
7
Directors’
stat
ement of
responsibil
ities
1
54
Dividends 1
92,290
Donations
to
political
organisations
and
political e
xpenditure
298
Ea
rnin
gs per s
hare
1
92
Employ
ee costs
1
8
5
Employee
share schemes
2
45
Environmen
t 39
Ethi
cs an
d value
s
38
E
xcha
nge rate
s
1
80
Finance e
xpense
1
87
Finance income
1
8
7
Financial calendar
202
2
29
1
Financial instruments
and rela
ted d
isclosures
228
Financial performance
7
,6
1
Financial position
and r
esources
7
4
Financial statemen
ts of
GlaxoSmithK
line
plc, prepared
und
er UK G
A
AP
252
Fi
ve year r
ecor
d
263
Gl
oss
ar
y of term
s
31
1
Goodwill 1
95
Gr
oup co
mpani
es
299
Gr
oup ﬁn
anci
al revi
ew
55
GS
K Lea
ders
hip T
eam
87
Independent Audit
or’
s report
1
56
Innovation 1
7
Invent
ories 2
00
Inve
stme
nts in a
sso
ciate
s and joi
nt ventu
res
198
Investor
relation
s
295
Key pe
rfo
rma
nce ind
icato
rs
1
2
Legal proceedings
248
Major restructu
ring costs
1
86
Modern employer
3
7
Move
ment
s in equi
ty
21
7
Net d
ebt
20
3
New accounting requirements
1
79
Nominations Commit
tee
Repor
t
1
07
Non-controlling int
erests
21
9
Non-controlling int
erests in ViiV Healthcare
5
7
Non-E
xecutive
Directors’
fees
1
39
Non-ﬁnancial information
stat
ement
54
Note
s to the ﬁn
anci
al st
atement
s
1
7
2
Op
erati
ng pro
ﬁt
1
84
Ot
her int
angi
ble a
sset
s
1
96
Ot
her inve
stme
nts
1
99
Ot
her no
n-cur
rent a
ss
ets
20
0
Other non-current
liabil
ities
2
1
6
Other operating
income/(
expense)
1
8
3
Other provisions
21
4
Our c
ultur
e
1
1
Our e
xte
rnal e
nviro
nment
1
3
Our long-
term priorit
ies
1
0
Pensions
and ot
her post
-emplo
yment ben
eﬁts
205
Performance 29
Pharmaceutica
ls
1
7
,29
Pharmaceutica
l
products, competition and
intellect
ual property
2
72
Pipelin
e
269
Post bal
ance sheet
ev
ents
25
1
Pr
ese
ntatio
n of the ﬁ
nanc
ial st
atemen
ts
1
71
Pr
inci
pal Gr
oup co
mpan
ies
24
7
Principal risks and uncer
tainties
27
5
Proper
ty
,
plant and
equipment
1
93
Quar
t
erly trend
25
8
Rec
onci
liati
on of net c
ash ﬂ
ow to movem
ent in ne
t debt
226
Registrar 2
94
Related part
y t
ransactio
ns
22
1
Reliable supply
38
Remuneration governance
1
38
Remuneration
report
1
25
Repor
t
ing framework
56
Ri
ght of us
e ass
ets
1
94
Risk management
46
Sc
ienc
e and tec
hnolo
gy
35
Science Committee report
1
05
Se
ctio
n 1
72 statem
ent
1
1
6
Sha
re ca
pita
l and c
ontro
l
28
8
Sha
re ca
pita
l and s
hare p
remiu
m acc
ount
21
7
Shareholder informa
tion
288
Shareholder service
s
and contacts
294
Stakeholder
engagement
44
T
as
k
Force on
Climate-rela
ted
Financial Disclosures
49
T
a
xation
1
89
T
a
x inf
ormation
for shareholders
29
1
Th
e Boar
d
8
3
T
rade a
nd othe
r payabl
es
201
T
rade and other
receivables
2
00
T
rans
f
ormation
& Separation
Committee report
1
1
0
T
rea
sury policies
79
Tr
u
s
t
3
4
T
urnove
r and se
gment i
nfor
mation
1
80
US l
aw and re
gulati
on
29
5
V
acc
ines
1
7
,
3
1
V
accine products,
competition and
int
ellectual property
27
3
Viability statem
ent
5
3
Page
Page
Index
Strategic report
Governance and remuneration
Financial statements
Investor information
Caut
ionary statemen
t
regarding
forward-looking statement
s
Th
e Gro
up’s re
por
ts ﬁl
ed wi
th or f
urn
ish
ed to th
e US
Securities and
Exchange Commission (
SEC
),
including
this document,
and an
y ot
her written
information
released, or oral
statements
made, t
o the
public
in the
fu
ture b
y or on b
eha
lf of th
e Gro
up, ma
y cont
ain
forward-looking statements. Forward-looking statemen
ts
gi
ve the G
rou
p’s cur
rent e
xpe
cta
tion
s or fo
rec
ast
s of
fu
ture e
vent
s. An i
nves
tor c
an id
enti
fy t
hes
e sta
teme
nts
by th
e fac
t that t
hey do n
ot re
late s
tri
ctly t
o his
tori
cal o
r
cu
rre
nt fac
ts. T
hey u
se wor
ds su
ch as ‘
anti
cip
ate’,
‘e
s
ti
m
ate
’, ‘
ex
pe
c
t’,
‘i
n
te
nd
’, ‘
wi
l
l’,
‘p
ro
je
c
t
’, ‘p
l
an
’,
‘b
eli
eve’, ‘t
arg
et’ a
nd oth
er wor
ds an
d ter
ms of si
mil
ar
me
ani
ng in c
onne
cti
on wi
th any d
isc
uss
ion o
f futu
re
operating or
ﬁnancial performance. In
particular,
these
include stat
ements relat
ing t
o future
actions,
prospective
products or
product appro
vals, future
performance or
re
sul
ts of cu
rre
nt an
d anti
cip
ated p
rod
ucts
, sa
les e
ff
ort
s,
expenses, the o
utcome of
contingencies
such as
legal
proceedings, dividend
payments
and
ﬁnancial results.
Other than
in
accordance wit
h its
legal
or regu
latory
obligations
(including
under the
Market
Abuse
Regulations, the
UK Listing
Rules and
the
Disclosure
and T
ransparency Rules
of th
e Financial
Conduct
Authority)
, the
Group un
dertakes no obligat
ion to
updat
e
any f
orward-looking statements, whether
as a
result o
f
new inf
ormation, fut
ure ev
ents or
otherwise. The reader
should, how
ever
,
consult an
y additional
disclosures t
hat
th
e Gro
up may m
ake in a
ny doc
ume
nts w
hich i
t
pu
blis
hes a
nd/o
r ﬁle
s wit
h the S
EC. Al
l rea
der
s,
wherever
located, should
take
note
of t
hese disclosures.
Ac
cor
ding
ly, no a
ssu
ran
ce ca
n be gi
ven th
at any
particular expectat
ion will
be
met
and in
vestors
are
cautioned not t
o place undue
reliance on t
he
forward-looking statements.
Forward-looking statements are
subject t
o assumptions,
in
here
nt ri
sks a
nd un
cer
ta
inti
es
, many o
f whi
ch rel
ate to
factors tha
t are
beyond
the
Group’
s control
or
precise
es
tim
ate. T
he Gr
oup c
auti
ons i
nves
tor
s that a n
umb
er
of important factors, including
those in
this
document,
could cause a
ctual results
to
differ materially
from t
hose
expressed or implied
in
any f
orward-looking statement.
Su
ch fa
ctor
s inc
lud
e, but a
re no
t limi
ted to
, tho
se
discussed und
er ‘Principal
risks an
d uncertainties’
on
pa
ges 275 to 2
87 of thi
s Ann
ual R
epor
t an
d any im
pac
ts
of t
he
COVID
-
19
pandemic. An
y forward-looking
st
atem
ent
s made b
y or on b
eha
lf of th
e Gro
up sp
eak o
nly
as o
f the d
ate the
y are m
ade a
nd are b
as
ed up
on the
knowledge and
information
available
to
the Directors
on
th
e date of t
his A
nnu
al Re
por
t.
A nu
mber o
f non
-I
FRS m
ea
sure
s are u
sed t
o rep
ort t
he
performance of our
business. These measures are
deﬁned
on p
age
s 56 and 5
9 and a r
eco
ncil
iat
ion of A
dju
sted
re
sul
ts to T
ot
al re
sult
s is se
t out o
n pag
e 70.
The information
in
this documen
t does
not constitut
e an
of
fer t
o sell o
r an in
vit
atio
n to buy s
har
es in
Gl
ax
oSm
ith
Kli
ne plc o
r an in
vit
atio
n or in
duc
emen
t to
en
gage i
n any o
ther i
nves
tme
nt act
ivi
tie
s. Pa
st
pe
rf
orm
anc
e can
not be r
eli
ed up
on as a g
uide t
o futu
re
pe
rf
orm
anc
e. Not
hin
g in thi
s Ann
ual R
epo
rt s
houl
d be
co
nst
rue
d as a pr
oﬁt f
orec
as
t.
Assumptions related to 2022
guidance
In o
utl
inin
g the gu
ida
nce f
or 2022
, the G
rou
p has m
ade
certain assumptions about the
healthcare secto
r,
the
di
ffe
ren
t mar
kets i
n whi
ch the G
rou
p ope
rate
s and t
he
de
live
ry o
f reve
nue
s and ﬁ
nanc
ial b
ene
ﬁts f
rom i
ts cu
rre
nt
port
f
olio, pipeli
ne and
restructuring programmes. The
Group also
assumes that
the demerger
of o
ur Consumer
He
alt
hca
re bu
sin
ess w
ill b
e deli
ver
ed in m
id-202
2 and th
is
gu
ida
nce r
elate
s onl
y to new G
SK
.
The Group
has made
planning assumptions
for
2022
that
healthcare systems
will
approach normality as
the y
ear
progresses, and
we
expect sales
of
Specialty Medicines
to gr
ow ap
prox
imat
ely 10% a
t CER a
nd sa
les o
f Gen
era
l
Medicines t
o sho
w a
slight
decrease, pri
marily reﬂectin
g
increased genericisation
of
established Respirat
ory
pr
odu
cts
. V
ac
cin
es sa
les a
re ex
pec
ted to gr
ow at a lo
w
tee
ns pe
rce
nta
ge at C
ER for t
he ye
ar as a w
hol
e. How
ever,
governments
’ prioritisation
of CO
VID
-
1
9 vaccinat
ion
programmes and on
going measures t
o contain
the
pa
nde
mic ar
e exp
ect
ed to re
sul
t in so
me co
ntin
ued
di
sru
ptio
n to adu
lt im
muni
sat
ions
, wi
th the i
mpa
ct
wei
ghte
d to the ﬁ
rs
t hal
f. For
Shi ng
rix
, despite the pot
ential
fo
r shor
t-te
rm pa
nde
mic di
sru
pti
on, we c
ont
inue t
o expe
ct
strong
double-digit
growth and
record
annual
sales based
on s
tro
ng dem
and i
n exi
stin
g mar
kets a
nd ge
ogr
aph
ica
l
ex
pans
ion
. Gui
dan
ce al
so in
clu
des t
he fut
ure b
ene
ﬁt in
royalty income
from the
settlement
and license
agreement
with Gilead announced on
1 February 2022.
These planning
assumptions as w
ell as
operating
proﬁt
guidance an
d dividend
expectat
ions assume
no
material
interruptions
to
supply of
the
Group’
s products,
no ma
terial
mergers, acquisitions or
disposals, no
material
litigation
or
inv
est
igat
ion c
ost
s for th
e com
pan
y (
sav
e for th
ose t
hat ar
e
already recognised
or f
or which
provisions
hav
e been
ma
de) and n
o cha
nge in t
he Gr
oup’s s
har
ehol
din
gs in V
iiV
Healthcare. The assumptions
also assume no
mat
erial
changes in
the healthcare
environment
or une
xpected
signiﬁcant changes in
pricing as
a result
of
government
or
co
mpe
tito
r acti
on. T
he 202
2 guid
anc
e fac
tor
s in all
divestments and product
exits announced t
o date.
The Group’
s
guidance assumes successful deliv
ery of
th
e Gro
up’s inte
gra
tio
n and r
estr
uc
turi
ng pl
ans
. It al
so
assumes that t
he separation
programme t
o deliv
er the
demerger of
the Consumer
Healthcare business is
delivered successfully
. Material
costs for
inv
estment in
new p
rod
uct l
aun
che
s and R&
D have b
een f
acto
red i
nto
the expectations
given.
Given t
he pot
ential de
velopment
options in
the
Group’
s pi
peline, the
outlook
may
be
af
fec
ted by a
ddi
tio
nal da
ta-
dri
ven R&
D inve
stm
ent
de
cis
ions
. Th
e gui
danc
e is gi
ven o
n a con
sta
nt cur
ren
cy
basis.
202
1
-
202
6 outlooks,
203
1 sales
ambition and
202
1
-
202
3 d
ividend expectatio
ns should
be
read t
ogether
with the
section
“Basis of prepara
tion, assumption
s and
ca
uti
onar
y st
ate
ment
s” on pa
ges 5
-
7 of o
ur sto
ck-
exc
han
ge an
noun
cem
ent r
elat
ing to a
n upd
ate to in
ves
tors
da
ted 23 Ju
ne 2021. Al
l outl
ook a
nd am
bit
ion s
tate
ment
s
ar
e give
n on a co
nst
ant c
urr
ency b
as
is and u
se 2021
ac
tual e
xch
ange r
ate
s as a ba
se.
Notice regarding limitat
ions
on
Direc
tor
Liability under English Law
Un
der th
e UK C
omp
ani
es Ac
t 200
6, a sa
fe ha
rbo
ur lim
its
th
e liab
ili
ty of D
ire
cto
rs in r
esp
ect o
f stat
eme
nts in a
nd
omissions from
the Directors
’ Report (
for
which see
page
1
1
7
),
the Stra
tegic report and
the
Remuneration
report.
Un
der E
ngli
sh law t
he Di
rec
tor
s woul
d be li
abl
e to the
co
mpa
ny, but n
ot to any t
hir
d par
ty, if o
ne or m
ore o
f the
se
reports contained errors as
a result
of recklessness or
kn
owi
ng mis
st
atem
ent or d
ish
one
st co
nce
alm
ent of a
ma
teri
al fa
ct, b
ut wou
ld oth
er
wis
e not b
e liab
le. P
age
s 82
to 1
1
8, 154 to 155
, and 275 to 310 inc
lusi
ve co
mpr
ise t
he
Di
rec
tor
s’ Rep
or
t, pag
es 1 to 81 in
clu
sive c
omp
ris
e the
St
rate
gic re
por
t an
d pag
es 1
19 to 152 inc
lus
ive co
mpr
ise
th
e Remu
ner
atio
n rep
or
t, ea
ch of w
hic
h have be
en dr
awn
up and
present
ed in
accordance
with and
in
reliance
upon
En
glis
h com
pan
y law an
d the li
abi
lit
ies o
f the Di
rec
tor
s in
co
nne
cti
on wit
h the
se re
por
ts s
hall b
e sub
jec
t to the
limitations
and restriction
s pro
vided by
such
law
.
Websit
e
GSK’s websit
e www.gsk.com giv
es additional
informa
tion
on t
he Gr
oup. N
ot
with
sta
ndi
ng the r
efe
ren
ces w
e make
in t
his A
nnua
l Rep
or
t to GS
K’s web
sit
e, no
ne of th
e
information
made a
vailable on
the
website
constitutes
pa
rt o
f this A
nnu
al Re
por
t or sh
all b
e dee
med to b
e
incorporated b
y reference
herein.
GlaxoSmithKline plc was incorporated as an English
public limited compan
y on 6 December 1
9
99. W
e were
formed b
y a merger bet
w
een Glaxo W
ellcome plc and
SmithKline Bee
cham plc. GSK a
cquir
ed these t
w
o
English companies on 2
7 December 20
0
0 a
s par
t
of the merger arrangements.
Our shares are listed on the London Stock E
x
change
and the New Y
ork Stock E
xchan
ge.
Re
ad mor
e at
www.gsk
.com
Download PDFs:
An
nual R
epo
rt 20
2
1
Fo
rm 20
-F
Brand names
Brand names
appearing
in italics
througho
ut th
is report
ar
e tra
de mar
ks ei
the
r own
ed by an
d/or li
cen
sed t
o GSK
or associated
companies. All other
trade
marks are
the
propert
y
of
their respective
owners.
Acknowledgements
Printing
Pr
inte
d sus
tai
nab
ly in t
he UK by P
ure
pri
nt, a C
arb
onN
eut
ral
®
company wit
h FSC
®
ch
ain of c
ust
ody a
nd an I
SO 1
40
01
certiﬁed environmental m
anagement s
ystem
recycling
over
99
% of al
l dr
y was
te.
Paper
Pr
inte
d on In
nova
tio
n Pre
mium
, an FS
C cer
ti
ﬁe
d pap
er.
Th
e pul
ps us
ed are Tot
ally C
hlo
rin
e Fre
e and th
e
manufacturing mi
ll has
ISO 1
40
0
1
environmental
management certiﬁcation. The mil
l’s
energy is
produced
from 1
00% biomass
fuels sourced
from local
forestry
an
d no fos
sil f
uel
s are u
sed
. The c
arb
on em
iss
ion
s have
be
en me
asu
red a
nd of
fs
et usi
ng th
e World L
an
d T
rus
t’s
Carbon Balanced
scheme.
About GSK
He
ad O
fﬁ
ce an
d Regi
ste
red O
f
ﬁce
Gla
xoSmithKline plc
980 Gr
eat West R
oad
Brentford, Middlesex TW8 9GS
United
Kingdom
T
e
l: +
44 (0)20 8047 5000
Registered
numb
er:
3888
7
9
2
ww
w
.gsk.com
Sea
rch for us he
re
Front
cov
er
Thi
s image i
s taken f
rom a sho
rt ﬁ
lm
on GS
K’s use o
f human g
eneti
cs and
advanced
techn
ology t
o
increase the
probability of successf
u
l new
medicines.
Click
gskadvancedtech.com
to wat
ch.