As filed with the Securities and Exchange Commission on February 28, 201427, 2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

OR

For the fiscal year ended December 31, 2014

OR

OR

Commission file number 1-15170

GlaxoSmithKline plc

(Exact name of Registrant as specified in its charter)

England

(Jurisdiction of incorporation or organization)

980 Great West Road, Brentford, Middlesex TW8 9GS England

(Address of principal executive offices)

Victoria Whyte

Company Secretary

GlaxoSmithKline plc

980 Great West Road

Brentford, TW8 9GS

England

+44 20 8047 5000

company.secretary@gsk.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

x  Yes    No  ¨   No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

¨  Yes    x   No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x                Accelerated filer  ¨                Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17  ¨    Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨  Yes    x  No

TABLE OF CONTENTS

Pursuant to Rule 12b-23(a) of the Securities Exchange Act of 1934, as amended, the information for the 20132014 Form 20-F of GlaxoSmithKline plc set out below is being incorporated by reference from the “GSK Annual Report 2013”2014” included as exhibit 15.2 to this Form 20-F dated and submitted on February 28, 201427, 2015 (the “GSK Annual Report 2013”2014”).

All references in this Form 20-F to “GlaxoSmithKline,” the “Group,” “GSK,” “we” or “our” mean GlaxoSmithKline plc and its subsidiaries; the “company” means GlaxoSmithKline plc.

References below to major headings include all information under such major headings, including subheadings, unless such reference is a reference to a subheading, in which case such reference includes only the information contained under such subheading.

In addition to the information set out below, the information set forth under the headings “Cautionary statement” on page 1 and the inside frontback cover, “Directors’ Report” on page 95, “Directors’ statement of responsibilities” on pages128pages 130 and 211, “Share buy-back programme” on page242,page 242, “Annual General Meeting 2014”2015” on page 245, “Financial reporting calendar”, “Results announcements” and “Financial reports” on page246,page 246, “Section 13(r) of the US Securities Exchange Act” on page 248, “Registrar” on page249,page 249, “ADR Depositary”, “Glaxo Wellcome and SmithKline Beecham Corporate PEPs”, “Donating shares to Save the Children”, “Contacts”, “Share scam alert”, “Corporate Responsibility Report” and “Contacts”“Responsible Business Supplement” on page250page 250 and “Glossary of terms” on page251page 251 in each case of the GSK Annual Report 20132014 is incorporated by reference.

Notice regarding limitations on Director Liability under English Law

Under the UK Companies Act 2006, a safe harbour limits the liability of Directors in respect of statements in and omissions from certain portions of the GSK Annual Report 20132014 incorporated by reference herein, namely the Directors’ Report (for which see page 95 thereof), the Strategic Report (pages 2 to 7470 thereof, portions of which are incorporated by reference as described below) and the Remuneration Report (pages 96 to 126128 thereof). These reports have been drawn up and presented in accordance with, and in reliance upon, English company law. Under English law, the Directors would be liable to the company, but not to any third party, if these sections of the GSK Annual Report 20132014 contain errors as a result of recklessness or knowing misstatement or dishonest concealment of a material fact, but would not otherwise be liable.

Portions of the GSK Annual Report 20132014 incorporated by reference herein contain references to our website. Information on our website or any other website referenced in the GSK Annual Report 20132014 is not incorporated into this Form 20-F and should not be considered to be part of this Form 20-F. We have included any website as an inactive textual reference only.

PART I

Not applicable.

Not applicable.

The information set forth under the heading:

of the GSK Annual Report 2013

2014 is incorporated herein by reference.

3.B	Capitalization and indebtedness

Not applicable.

Not applicable.

Principal risk factors and uncertainties

The principal risks discussed below are the risks and uncertainties relevant to our business, financial condition and results of operations that may affect our performance and ability to achieve our objectives. The factors below are those that we believe could cause our actual results to differ materially from expected and historical results.

We operate on a global basis in an industry that is both highly competitive and highly regulated. Our competitors may make significant product innovations and technical advances and may intensify price competition. In light of this competitive environment, continued development of commercially viable new products and the development of additional uses for existing products are critical to our ability to maintain or increase overall sales.

Developing new pharmaceutical, vaccine and vaccineconsumer healthcare products is a costly, lengthy and uncertain process, however, and a product candidate may fail at any stage, including after significant Group economic and human resources have been invested. Our competitors’ products or pricing strategies or any failure on our part to develop commercially successful products, or to develop additional uses for existing products, could materially and adversely affect our financial results.

We must also adapt to and comply with a broad range of laws and regulations. These requirements apply to research and development, manufacturing, testing, approval, distribution, sales and marketing of Pharmaceutical, Vaccine and Consumer Healthcare Products, and affect not only the cost of product development but also the time required to reach the market and the uncertainty of successfully doing so.

Moreover, as rules and regulations change, and governmental interpretation of those rules and regulations evolves, the nature of a particular risk may alter.change. Changes to certain regulatory requires, such as the US healthcare system,regimes may be substantial. Any change in, and any failure to comply with, applicable law and regulation could materially and adversely affect our financial results.

Similarly, our business exposes us to litigation and government investigations, including but not limited to product liability litigation, patent and antitrust litigation and sales and marketing litigation. Litigation and government investigations, including related provisions we may make for unfavourable outcomes and increases in related costs such as insurance premiums, could materially and adversely affect our financial results. More detail on the status and various uncertainties involved in the significant unresolved disputes and potential litigation is set out in Note 44,45, ‘Legal proceedings,’ on pages 204206 to 210 of the GSK Annual Report 2013.

The principal risk factors and uncertainties are not listed in order of significance.2014.

Failure to appropriately collect, review, follow up, or report adverse events from all potential sources. This couldsources, and to act on any relevant findings in a timely manner.

Risk impact

The impact of this risk is potentially to compromise our ability to conduct robust safety signal detection and interpretation and to ensure that appropriate decisions are taken with respect to the risk/benefit profile of our products, including the completeness and accuracy of product labels and the pursuit of additional studies/analyses, as appropriate.

Risk impact

The impacts of the risk include This could lead to potential harm to patients, reputational damage, product liability claims or other litigation, governmental investigation, regulatory action such as fines, penalties or loss of product authorisation.

Context

Pre-clinical and clinical trials are conducted during the development of investigational Pharmaceutical, Vaccine and Consumer Healthcare Products to determine the safety and efficacy of the products for use by humans. Notwithstanding the efforts we make to determine the safety of our products through appropriate pre-clinical and clinical trials, unanticipated side effects may become evident only when products are widely introduced into the marketplace. Questions may be raised not only by our ongoing safety surveillance and post-marketing studies but also by governmental agencies and third-parties whothat may analyse publicly available clinical trial results.

The Group is currently a defendant in a number of product liability lawsuits, including class actions, that involve significant claims for damages related to our products. Litigation, particularly in the US, is inherently unpredictable. Class actions that seek to sweep together all persons who were prescribed our products increase the potential liability. Claims for pain and suffering and punitive damages are frequently asserted in product liability actions and, if allowed, can represent potentially open-ended exposure and thus, could materially and adversely affect the Group’s financial results.

Failure to appropriately secure and protect intellectual property rights.

Risk impact

Any failure to obtain or subsequent loss of patent protection, including reducing the availability or scope of patent rights or compulsory licensing (in which a government forces a manufacturer to license its patents for specific products to a competitor), could materially and adversely affect our financial results in those markets. Absence of adequate patent or data exclusivity protection could limit the opportunity to rely on such markets for future sales growth for our products, which could also materially and adversely affect our financial results.

Context

As an innovative Pharmaceutical, Vaccine and Consumer Healthcare Products company, we seek to obtain appropriate intellectual property protection for our products. Our ability to obtain and enforce patents and other proprietary rights with regard to our products is critical to our business strategy and success. Pharmaceutical and Vaccine products are usually only protected from being copied by generic manufacturers during the period of exclusivity provided by an issued patent or related intellectual property rights such as Regulatory Data Protection or Orphan Drug status. Following expiration of certain intellectual property rights, a generic manufacturer may lawfully produce a generic version of the product but may face technological or regulatory barriers to marketing.product.

We operate in markets where intellectual property laws and patent offices are still developing and where governments may be unwilling to grant or enforce intellectual property rights in a fashion similar to more developed regions such as the EU, Japan and the USA.US. Some developing countries have reduced,limited, or threatened to reduce,limit, effective patent protection for Pharmaceuticalpharmaceutical products generally, or in particular therapeutic areas, in order to facilitate early competition within their markets from generic manufacturers.

We face competition from manufacturers of proprietary and generic pharmaceutical products in all of our major markets. Introduction of generic products, particularly in the USAUS where we have our highest turnover and margins, typically leads to a rapid and dramatic loss of sales and reduces our revenues and margins for our proprietary products. In 2013,2014, we had10had nine Pharmaceutical and Vaccine products with over £500 million in annual global sales. For certain of these products, there is generic competition in the USAUS and some markets in Europe. We may also experience an impact on sales of one of our products due to the expiry or loss of patent protection for a product marketed by a competitor in a similar product class or for treatment of a similar disease condition.

We depend on certain key products for a significant portion of our sales. One such product is our respiratory pharmaceutical product Seretide/Advair which accounts for 18% of Group sales worldwide. The timing and impact of entry in the USA and major markets in EuropeUS for a ‘follow-on’generic product tocontaining the same combination of active substances as Seretide/Advair is uncertain. The US patent for compositions containing the combination of active substances inSeretide/Advair expired during 2010 although the US patent on a component of theAdvair Diskus device continues until August 2016. We are not able to predict whenGeneric products containing the same combination of active substances as Seretide/Advair (in both metered dose inhalers and dry powder inhalers) have been launched by several manufacturers in a generic competitor toSeretide / Advairmay enternumber of European markets. The timing and impact of entry in the US market.and major markets in Europe for a ‘follow-on’ product to Seretide/Advair is uncertain.

Generic drug manufacturers have also exhibited a readiness to market generic versions of many of our most important products prior to the expiration of our patents. Their efforts may involve challenges to the validity or enforceability of a patent or assertions that their generic product does not infringe our patents. As a result, we are and may continue to be involved in legal proceedings involving patent challenges, which may materially and adversely affect our financial results. Moreover, in the USA,US, it has become increasingly common for patent infringement actions to prompt claims that anti-trust laws have been violated during the prosecution of the patent or during litigation involving the defence of that patent. Such claims by direct and indirect purchasers and other payers are typically filed as class actions. The relief sought may include treble damages and restitution claims. Similarly, anti-trust claims may be brought by

government entities or private parties following settlement of patent litigation, alleging that such settlements are anti-competitive and in violation of anti-trust laws. A successful anti-trust claim by a private party or government entity could materially and adversely affect our financial results.

The expiration dates for patents for our major products which may affect the dates on which generic versions of our products may be introduced are set out on pages “Pharmaceutical products, competition and intellectual property” on pages 229 to 231.231 of the GSK Annual Report 2014. Legal proceedings involving patent challenges are set out in Note 44 to the financial statements,45, ‘Legal proceedings’,proceedings,’ on pages 204206 to 206210 of the GSK Annual Report 2013.2014.

Failure to ensurecomply with current Good Manufacturing Practice (cGMP) requirements in commercial manufacture, through the distribution chain, by GSK, its contractors or suppliers; or through inadequate controls and governance of quality through product quality throughout manufacturingdevelopment, and distribution processes resulting in non-compliance with good manufacturing practice (GMP) and regulations.supporting regulated activities.

Risk impact

A failure to ensure product quality could have far reaching implications in terms of the health of patientspatient and customers,consumer safety, delays in launching new products, drug shortages, product recalls, potential damage to our reputation and that of the relevant product, as well as regulatory, legal, and financial consequences, which could materially and adversely affect our reputation and financial results.

Context

Patients, consumers and healthcare professionals trust the quality of our products at the point of use.products. A failure to ensure product quality is an enterprise risk which is applicable across all of our business activities. Product quality may be influenced by many factors including product and process understanding, supply chain security, consistency of manufacturing components, compliance with GMP, accuracy of labelling,labeling, reliability and security of the external supply chain, and the embodiment of an overarching quality culture. The internal and external environment continues to evolve as new products, new markets and new legislation are introduced, particularly around security of supply, good distribution practice and product standards. Inspectional trending from national authorities during 2014 has highlighted a focus on issues relating to data integrity, contamination and the robustness of quality investigations.

Failure to deliver a continuous supply of compliant finished product.

Risk impact

AnyA material interruption of supply or exclusion from healthcare programmes could impact patient access to our products, expose us to litigation or regulatory action and materially and adversely affect our financial results. In particular, the incurring of fines or disgorgement as a result of noncompliance with manufacturing practice regulations could also materially and adversely affect the Group’s financial results and result in reputational damage.

Context

Our supply chain operations are subject to review and approval by various regulatory agencies that effectively provide our licence to operate. Failure by our manufacturing and distribution facilities or by suppliers of key services and materials could lead to litigation or regulatory action such as product recalls and seizures, interruption of supply, delays in the approval of new products, and revocationsuspension of our licence to operatemanufacturing operations pending resolution of manufacturing or logistics issues. In 2014, our Consumer Healthcare business, particularly our Smokers’ Health products, alli and Bactroban, were impacted by various supply issues and our Vaccines business, particularly our hepatitis vaccines and Boostrix, were impacted by supply constraints.

Materials and services provided by third-party suppliers are necessary for the commercial production of our products, including active pharmaceutical ingredients (API), antigens, intermediates, commodities and components necessary for the manufacture and packaging of many of our Pharmaceutical, Vaccine and Consumer Healthcare Products. Some of the third-party services procured, such as services provided by contract manufacturing organizations and clinical research organisations to support development of key products, are important to theensure continuous operation of our businesses. Although we undertake business continuity planning, single sourcing of certain components, bulk API, finished products, and services creates a risk of failure of supply in the event of regulatory non-compliance or physical disruption at the manufacturing sites and to logistics.or logistics system.

The failure of a small number of single-source, third-party suppliers or service providers to fulfilfulfill their contractual obligations in a timely manner or as a result of regulatory non-compliance or physical disruption of logistics and manufacturing sites may result in delays or service interruptions.

Failure to report accurate financial information and material events in compliance with accounting standards and applicable legislation.

Risk impact

Non-compliance with existing or new financial reporting and disclosure requirements, or changes to the recognition of income and expenses, could expose us to litigation and regulatory action and could materially and adversely affect our financial results.

Context

New or revised accounting standards, rules and interpretations issued from time to time by the International Accounting Standards Board could result in changes to the recognition of income and expense that may materially and adversely affect our financial results.

The Group is also required by the laws of various jurisdictions to disclose publicly disclose its financial results and regulatorsevents that could materially affect the financial results of the Group. Regulators routinely review the financial statements of listed companies for compliance with accounting and regulatory requirements. The Group believes that it complies with the appropriate regulatory requirements concerning our financial statements and disclosures.disclosure of material information. However, should we be subject to an investigation into potential non-compliance with accounting and disclosure requirements, there is potential for restatements of previously reported results and we could be subject to significant penalties.

Failure to comply with current tax law, or react to the rapidly evolving tax environment. Incurring significant losses due to treasury activities.

Risk impact

Changes in tax laws or in their application with respect to matters such as transfer pricing, foreign dividends, controlled companies, R&D tax credits, taxation of intellectual property or a restriction in tax relief allowed on the interest on intra-group debt, could impact our effective tax rate. Significant losses may arise from Treasury activities through inconsistent application of Treasury policies, dealing or settlement errors, or counterparty defaults. Any such changes in tax laws or their application, failure to comply with tax law or significant losses due to treasury activities could materially and adversely affect our financial results.

Context

The Group’sOur Treasury group deals in high value transactions, mostly foreign exchange and cash management transactions, on a daily basis.

The Group’s effective tax rate is driven by rates of tax in jurisdictions that are both higher and lower than the UK. In addition, many jurisdictions currently offer regimes that encourage innovation and investment in science by providing tax incentives, such as R&D tax credits and lower tax rates on income derived from patents. Furthermore, as an international business, we face risks associated with intra-group transfer pricing.

The tax charge included in our financial statements is our best estimate of tax liability pending audits by tax authorities. We submit tax returns according to statutory time limits and engage tax authorities to help ensure our tax affairs are current. In exceptional cases where matters cannot be settled by agreement with tax authorities, we may have to resolve disputes through formal appeals or other proceedings. As an international business, we are also subject to a range of other duties and taxes carrying similar types of risk.

There is an increased focus on the tax position of multinational businesses, as a consequence of the challenging economic environment and the priority placed by the G20 on addressing allegations of unlawful tax avoidance. We have seen some increase in audits as governments seek to raise revenues, both from corporate taxes and above the line taxes such as customs duties. Such audits regardless of their merit or outcomes can be costly, divert management attention and may adversely impact our reputation. In addition, there are an increasing number of changes to the international tax framework which could lead to an increase or decrease in our tax costs.

There is a risk that GSK personnel, or third parties acting on our behalf, seek to induce improper performance of someone’s role in order to gain or retain GSK a business advantage through the offer, promise or giving of a bribe. This goes against our ethical standards and is contrary to the laws by which we are bound.

Failure to foster a culture within the Group in which bribery and corruption are unacceptable; adopt measures and embed procedures to prevent bribery and corruption by employees, complementary workers and through third party interactions; investigate allegations of bribery and corruption and remediate issues identified; and comply with applicable anti-bribery and corruption (ABAC) legislation.

Risk impact

Failure to comply with applicable local and international ABAC legislationmitigate this risk could expose the Group and associated persons to governmental investigation, regulatory action and civil and criminal liability, as well as damage the Group’s reputation, shareholder value, and our licence to operate in particular jurisdictions, all of which could materially and adversely affect our financial results.

Context

Like other large organisations, the Group faces the risk of fraud by members of staff. The nature, scale and geography of our international business activities increase the possibility of this bribery and corruption risk. Additionally, the healthcare industry is highly regulated, and some of our overseas markets, such as our operations in emerging markets,We are more susceptibleexposed to bribery and corruption risks.risk through our global business operations. In some markets, the government structure and the rule of law are less developed, and this has a bearing on our bribery and corruption risk exposure. In addition to the global nature of our business, the healthcare sector is highly competitive and subject to regulation. This increases the instances where we are exposed to activities and interactions with bribery and corruption risk.

As has previously been disclosed, the Group in 2014 has been subject to regulatory action and media focus with regard to bribery investigations in China and other markets. On 19 September 2014, the Group announced that the Changsha Intermediate People’s Court in Hunan Province, China ruled that, according to Chinese law, GSK China Investment Co. Ltd (“GSKCI”), had offered money or property to non-government personnel in order to obtain improper commercial gains, and been found guilty of bribing non-government personnel. The verdict followed investigations initiated by China’s Ministry of Public Security in June 2013. As a result of the Court’s verdict, GSKCI has paid a fine of RMB 3 billion (£301 million) to the Chinese government.

The US and UK authorities are leading extra-territorial ABAC inquires into certain of the Group’s operations. These investigations are further discussed in Note 45, ‘Legal proceedings,’ on pages 206 to 210 of the GSK Annual Report 2014.

Failure to engage in commercial and/or scientific activities that are consistent with the letter and spirit of legal, industry, or the Group’s requirements relating to marketing and communications about our medicines and associated therapeutic areas; appropriate interactions with healthcare professionals (HCPs) and patients; and legitimate and transparent transfer of value.

Risk impact

Failure to comply with applicable laws, rules and regulations may result in governmental investigation, regulatory action and legal proceedings brought against the Group by governmental and private plaintiffs. Failure to provide accurate and complete information related to our products may result in incomplete awareness of the benefit: risk profile of our medicines and possibly suboptimal treatment of patients. Any of these consequences could materially and adversely affect our financial results. Any practices that are found to be misaligned with our values could also result in reputational damage and dilute trust established with key stakeholders. In 2012, we paid $3 billion to resolve government investigations in the US focused in large part on promotional practices.

Context

We are committed to legitimate Scientific Engagement and the ethical and responsible commercialisation of medicines to support our mission to improve the quality of human life by enabling people to do more, feel better, and live longer. To accomplish this mission, we engage the healthcare community in various ways to advance our scientific knowledge as well as to provide important information about our medicines.

The Group disseminates information about its products through both promotion and non-promotional Scientific Engagement.Engagement and promotional activities. The latterformer is the interaction and exchange of information between the Group and partners and external communities in order to advance scientific and medical understanding including the appropriate development and use of our products; the management of disease; and patient care. It is distinct from promotional activities which may take place only after authorisation of a new product or indication, and must be conducted strictly in accordance with promotional laws, codes and the Group’s Policy.

TherePromotion of approved medicines helps ensure that HCPs globally have access to information they need, that patients have access to the medicines they need and that medicines are prescribed and used in a manner that provides the maximum healthcare benefit to patients. We are committed to communicating information related to our approved products in a responsible, legal, regulatory, financial and reputational risksethical manner.

At times, researchers, HCPs, healthcare organisations (HCOs) and other external experts that we engage may be compensated for the Group if these activities are,services and expertise provided. However, payments must not be excessive and must never be or arebe perceived to be exceeding their proper boundariesan inducement or inappropriately influencing HCPs. In 2012, we paid $3 billion to resolvereward for prescribing our products. Consistent with our ABAC policies, they also must comply with a market’s ABAC laws if the recipient of any payment is a government investigations in the USA focused in large part on promotional practices.official.

Failure adequately to protect and inform patients involved in human clinical trial research; conduct objective, ethical preclinical and clinical trials using sound scientific principles; guarantee the integrity of discovery, preclinical, and clinical development data; manage human biological samples according to established ethical standards and regulatory expectations; treat animals ethically and practice good animal welfare; appropriately disclose human subject research for medicinal products; and ensure the integrity of our regulatory filings and of the data that we publish.

Risk impact

The impacts of the risk include harm to patients, reputational damage, failure to obtain the necessary regulatory approvals for our products, governmental investigation, legal proceedings (product liability suits and claims for damages), and regulatory action such as fines, penalties or loss of product authorisation, which could materially and adversely affect our financial results.

Context

Research relating to animals and humans can raise ethical concerns. While we attempt to proactively address this, animal studies remain a vital part of our research. In many cases, they are the only method that can be used to investigate the effects of a potential new medicine in a living body before it is tested in humans, which isand they are generally mandated by regulators and ethically imperative. Animal research can also provide critical information about the causes of diseases and how they develop. Some countries require additional animal testing even when medicines have been approved for use elsewhere.

Clinical trials in healthy volunteers and patients are used to assess and demonstrate an investigational product’s efficacy and safety or further evaluate the product once it has been approved for marketing. We also work with human biological samples. These samples are fundamental to the discovery, development and safety monitoring of our products.

The integrity of our data is essential to success in all stages of the research data lifecycle: design, generation, recording and management, analysis, reporting and storage and retrieval. Our research data is governed by legislation and regulatory requirements.

Research data and supporting documents are core components at various stages of pipeline progression decision-making and also form the content of regulatory submissions. Poor data integrity can compromise our research efforts.

There are innate complexities and interdependencies required for regulatory filings, particularly given our global research and development footprint. Currently, rapidRapid changes in submission requirements in developing countries are increasingcontinue to increase the complexity of meeting regulatory requirements.

worldwide product registration.

Failure to ethically manage environment, health and safety and sustainability (EHSS) risks consistent with the Group’s ethics, objectives, policies and relevant laws and regulations.

Risk impact

Failure to manage EHSS risks could lead to significant harm to people, the environment and communities in which we operate, fines, failure to meet stakeholder expectations and regulatory requirements, litigation or regulatory action, and damage to the Group’s reputation and could materially and adversely affect our financial results.

Context

The Group is subject to health, safety and environmental laws of various jurisdictions. These laws impose actualduties to protect people, the environment and the communities in which we operate as well as potential obligations to remediate contaminated sites. We have also been identified as a potentially responsible party under the US Comprehensive Environmental Response Compensation and Liability Act at a number of sites for remediation costs relating to our use or ownership of such sites.

Failure to manage these environmental risks properly could result in litigation, regulatory action and additional remedial costs that may materially and adversely affect our financial results. See Note 4445 to the financial statements, ‘Legal proceedings’, on pages 204 to 210 of the GSK Annual Report 2013, for a discussion of the environmental related proceedings in which we are involved. We routinely accrue amounts related to our liabilities for such matters.

Risk to the Group’s business activity if critical or sensitive computer systems or information are not available when needed, are accessed by those not authorised, or are deliberately changed or corrupted.

Risk impact

Failure to adequately protect critical and sensitive systems and information may result in our inability to maintain patent rights, loss of commercial or strategic advantage, damage to our reputation or business disruption including litigation or regulatory sanction and fines, which could materially and adversely affect our financial results.

Context

We rely on critical and sensitive systems and data, such as corporate strategic plans, sensitive personally identifiable information, intellectual property, manufacturing systems and trade secrets. There is the potential that malicious or careless actions expose our computer systems or information to misuse or unauthorised disclosure.

Inability to recover and sustain critical operations following a disruption or to respond to a crisis incident in a timely manner regardless of cause.manner.

Risk impact

Failure to manage crisis and continuity management (CCM) effectively can lead to prolonged business disruption, greater damage to the Group’s assets, and risk of a medicine’s supply disruption to patients andof a medicine, any of which could materially and adversely affect our financial results. Delays to R&Doperational activities and delivery of our products to consumers and patients who rely on them could also expose us to litigation or regulatory action, materially and adversely affect our financial results and lead to reputational damage.

Context

Patients, consumers and healthcare professionals rely on our products being readily available when needed even in the event of a crisis. OurThe Group’s international operations, and those of ourits partners, maintain a vast global footprint exposing our people,workforce, facilities, operations and information technology to potential disruption resulting from a natural event (eg(e.g., storm or earthquake), a man-made event (eg(e.g., civil unrest, terrorism), or a global emergency (eg global(e.g., Ebola outbreak, Flu pandemic). Through effective crisis management and business continuity planning we are committed to providing for the health and safety of our people, minimising damage and impact to the Group, and maintaining functional operations following a natural or man-made disaster, or a public health emergency).emergency.

Failure to maintain adequate governance and oversight over third-party relationships; failure of third-parties to meet their contractual, regulatory, confidentiality or other obligations; failure of third-parties to comply with the law or appropriately manage their respective operations to mitigate the Principal Risks to the Group outlined above.

Risk impact

Failure to adequately manage third-party relationships could result in business interruption and exposure to risk ranging from sub-optimal contractual terms and conditions, to severe business sanctions and/or significant reputational damage. Any of these consequences could materially and adversely affect our business operations and financial results.

Context

Third parties are critical to our business delivery and are an integral part of the solution to improve our productivity, quality, service and innovation. We rely on third-parties, including suppliers, distributors, individual contractors, licensees, and other pharmaceutical and biotechnology collaboration partners for discovery, manufacture, and marketing of our products and important business processes.

However, these business relationships present a material risk. For example, we share critical and sensitive information such as marketing plans, clinical data, and employee data with specific third parties who are conducting the relevant outsourced business operations. Inadequate protection or misuse of this information by third parties could have significant business impact. Similarly, we use distributors and agents in a range of activities such as promotion and tendering which have inherent risks such as inappropriate promotion or corruption. Insufficient internal compliance and controls by the distributors could affect our reputation. These risks are further increased by the complexities of working with large numbers of third parties.

Item 4.

Information on the Company

The information set forth under the heading:

of the GSK Annual Report 20132014 is incorporated herein by reference.

In addition, the information set forth under the headings:

of the GSK Annual Report 20132014 is incorporated herein by reference.

The information set forth under the heading:

of the GSK Annual Report 20132014 is incorporated herein by reference.

The information set forth under the headings:

of the GSK Annual Report 20132014 is incorporated herein by reference.

Not applicable.

The information set forth under the headings:

of the GSK Annual Report 20132014 is incorporated herein by reference.

The following tables reconcile total results to core results. References in the GSK Annual Report 20132014 to the reconciliations on page65page 61 of that report should be read to refer to the information in these tables.

Core results reconciliation – 31 December 2012 (restated)
		Core results £m				Intangible amortisation £m				Intangible impairment £m				Major restructuring £m				Legal charges £m				Acquisition accounting and other £m				Total results £m
Gross profit			19,322				(378	)			(309	)			(128	)							(1	)			18,506
Operating profit			8,238				(477	)			(693	)			(557	)			(436	)			1,225				7,300
Profit before taxation			7,543				(477	)			(693	)			(558	)			(436	)			1,221				6,600
Profit after taxation			5,705				(332	)			(497	)			(843	)			(286	)			931				4,678
Earnings per share			111.4p				(6.8	)p			(7.3	)p			(17.4	)p			(5.8	)p			17.5p				91.6p
Weighted average number of shares (millions)			4,912																								4,912
The following adjustments are made in arriving at core gross profit
Cost of sales			(7,109	)			(378	)			(309	)			(128	)							(1	)			(7,925	)
The following adjustments are made in arriving at core operating profit
Selling, general and administration			(7,905	)											(418	)			(436	)			(30	)			(8,789	)
Research and development			(3,485	)			(99	)			(384	)			(11	)											(3,979	)
Other operating income																							1,256				1,256
The following adjustments are made in arriving at core profit before tax
Net finance costs			(724	)											(1	)							(4	)			(729	)
The following adjustments are made in arriving at core profit after tax
Taxation			(1,838	)			145				196				(285	)			150				(290	)			(1,922	)

Core results reconciliation – 31 December 2012
		Core results £ m				Intangible amortisation £ m				Intangible impairment £ m				Major restructuring £ m				Legal charges £ m				Acquisition accounting and other £ m				Total results £ m
Gross profit			19,322				(378	)			(309	)			(128	)							(1	)			18,506
Operating profit			8,238				(477	)			(693	)			(557	)			(436	)			1,225				7,300
Profit before taxation			7,543				(477	)			(693	)			(558	)			(436	)			1,221				6,600
Profit after taxation			5,705				(332	)			(497	)			(843	)			(286	)			931				4,678
Earnings per share			111.4p				(6.8	)p			(7.3	)p			(17.4	)p			(5.8	)p			17.5p				91.6
Weighted average number of shares (millions)			4,912																								4,912
The following adjustments are made in arriving at core gross profit
Cost of sales			(7,109	)			(378	)			(309	)			(128	)							(1	)			(7,925	)
The following adjustments are made in arriving at core operating profit
Selling, general and administration			(7,905	)											(418	)			(436	)			(30	)			(8,789	)
Research and development			(3,485	)			(99	)			(384	)			(11	)											(3,979	)
Other operating income																							1,256				1,256
The following adjustments are made in arriving at core profit before tax
Net finance costs			(724	)											(1	)							(4	)			(729	)
The following adjustments are made in arriving at core profit after tax
Taxation			(1,838	)			145				196				(285	)			150				(290	)			(1,922	)

Financial Review – 2012review 2014

The Financial review summarises the performance of the Group for the year, in comparison with the results of the previous year. The Financial review also sets out the balance sheet position of the Group at 31 December 2013.

Group performance

The following discussion compares results forOur financial review discusses the year to 31 December 2012 withoperating and financial performance of the Group, the financial outlook and our financial resources. We compare the results for each year primarily with results of the preceding year to 31 December 2011.and on a CER basis. In this review we discuss the results on both a core basis and a total basis.

All growth rates included in the financial reviewthis Report are at constant exchange rates (CER) unless otherwise stated. CER growth is discussed below.

Financial review 2013

The discussion that follows on page 58 of the GSK Annual Report 2013 under the heading “CER growth”. The information set forth under this headingmovements in turnover is incorporated by reference herein.

IAS 19 (Revised) has been implemented by GSK from 1 Januarypresented excluding divestments completed in 2013. The main effect is that the expected returns on pension scheme assets are no longer recognised in the income statement. Expected returns are replaced by income calculated using the same discount rate as that used to measure the pension obligations. This discount rate is based on market rates for high quality corporate bonds. As a consequence, pension scheme costs are higher under IAS 19 (Revised). The effect of the change, on 2012 results, is to reduce core operating profit for the year by £92 million and core EPS by 1.3p to 111.4p. The effect of the change, on 2011 results, is to reduce core operating profit for the year by £73 million and core EPS by 1.0p to 114.5p. The results for 2012 and 2011turnover analyses have been restated accordingly.presented on a comparable basis.

Several minor product reclassifications between the Pharmaceuticals and Consumer Healthcare segments have been made with effect from 1 January 2013. The results for 2012 and 2011 have been restated accordingly.

Group turnover by business

Total Group turnover for 20122013 was broadly£26,505 million, up 1%. Excluding the impact of divestments completed in line with 2011 (down 1% to £26,431 million), with a2013, turnover increased 2% decline in. Pharmaceuticals and Vaccines turnover partlygrew 1%. Pharmaceuticals turnover grew 1% and, as growth in the US, Japan and Emerging Markets was partially offset by flat reported turnover in Consumer Healthcare. Pharmaceuticals turnover was down 2%, primarily as a result of the increased pressure from austerity measurescontinued pricing pressures and generic competition in Europe. ViiV Healthcare turnover for 2013 was flat. Vaccines turnover declinedgrew 2%, reflectingdespite the impact of loweradverse comparison with strongCervarix sales ofin Japan in 2012. ExcludingCervarix in Japan, (2012 – £132 million; 2011 – £344 million) followingVaccines sales grew 5%, reflecting the completionstrong growth in the US ofInfanrix/Pediarix andBoostrix, both of which benefited from competitor supply issues, andFluarix/FluLaval, which benefited from the launch of the 2011 HPV vaccination catch-up programme. ExcludingCervarix, Vaccines turnover increased 4%. Reportednew Quadrivalent formulation, as well as a better performance by the business in Europe. Consumer Healthcare turnover was flat at £5,170 million, but excluding the non-core OTC brands divested in early 2012, Consumer Healthcare turnover grew 6%.

Group turnover by geographic region

Group sales outside the USA and Europe accounted for 40% of total turnover and reported growth of 2%, adversely impacted by sales declines in China.

Group turnover by segment

Pharmaceuticals turnover

Respiratory

Respiratory sales increased 1%in 2013 grew 4% to £7,289 million, with the US up 7%, with growth in the USA, EMAPEurope down 2%, Emerging Markets up 4% and Japan offsetup 10%.Seretide/Advair sales were up 4% to £5,274 million, largely driven by a decline in Europe. Total sales ofSeretide/Advair grew 1% to £5,046 million,Ventolin sales increased 6% to £631 million whilestrong US performance.Flixotide/Flovent sales fell 4%increased 2% to £779£796 million, andVentolin sales grew 2% to £642 million.Xyzal sales, almost exclusively made in Japan, doubledgrew 26% to £129 million.£137 million, reflecting a strong allergy season.

In the USA,US, Respiratory sales ofgrew 7%, withAdvair were £2,533up 8% to £2,769 million, up 1% compared with 2%6% estimated underlying growth for the year (5% volume decline more than offset by a 7%an 11% positive impact of price and mix).Flovent sales declined 1%were up 6% to £448£482 million compared with estimated underlying growth of 3%for the year up 6% (4% volume increase partlydecrease offset by a 1% negative10% positive impact of price and mix).Ventolin grew 14%4% to £277£291 million, whilewith estimated underlying growth was 11%,of 8% driven mostly by volume.improved price realisation in the first half of the year. The launch ofBreo Ellipta began in Q4 2013 with £5 million of sales recorded in the quarter.

European Respiratory sales were down 5%2% reflecting the impact of ongoing austerity measures.increased competition in many markets.Seretide sales were down 2% to £1,458 million, with a 2% volume decrease and no net impact of price and mix.

Respiratory sales in Emerging Markets grew 4%, but 9% excluding China, led bySeretide, which grew 4% to £1,447£429 million as price cuts more than offset volume(12% excluding China).Seretide continued to deliver strong growth of approximatelyacross many Emerging Markets markets.Veramyst, grew 16% to £71 million andVentolin increased 2%. to £171 million.

In EMAP,Japan, Respiratory sales grew 13%, with growth across most products in the portfolio.Seretide grew 12%10% to £417£554 million, with strong growth in Chinafrom bothXyzal and Latin America offsetting the impact of some price reductions, principally in Turkey.VentolinVeramyst.Adoair sales increased 10%grew 8% to £171£277 million.Relvar Ellipta was launched in December 2013, recording sales of £3 million.

Anti-viralsOncology

The 11% decline in Anti-viralsOncology sales largely resulted from generic competition toValtrex, which was down 25% to £252 million.

Central nervous system (CNS)

Declines inSeroxat/Paxil sales of 14% to £374 million andRequip sales ofgrew 22% to £164£969 million, primarily as a resultmarking the second consecutive year of generic competition, were only partially offset by the 14%double digit percentage growth ofLamictal to £610 million.

In the USA, theLamictal franchise increased 18% to £332 million as strong growth ofLamictal XR, approximately 45% of the US franchise, more than offset the impact of generic competition to the immediate release (twice a day) formulation. Generic competition toLamictal XR began during the first quarter of 2013. In Japan, sales ofLamictal IR grew 88% to £78 million, in part due to sales for the recently launched bipolar indication.

Cardiovascular and urogenital

Sales in the categorybusiness. US sales were flat as the net benefit of the conclusion of theVesicare co-promotion agreement combinedup 17% with growth in sales ofstrong performances byAvodartVotrient,Promacta andLovazaArzerra were offset by the impact of generic competition toArixtra andCoreg.

TheAvodart franchise grew 7% to £790 million with growth driven by strong, but also contributions from the recent launches of the combination producttwo new metastatic melanoma productsDuodart/JalynTafinlar andMekinist. Sales in Europe grew 28% and ofEmerging Markets grew 18%.Avodart in Japan. In the USA, the decline inAvodartVotrient sales in part duegrew 80% to the impact of labelling changes implemented in 2011 and the availability of a generic competitor in the same class, was partially offset by growth in£331 million,JalynPromacta, and combined sales fell 5%.

Lovaza grew 5% to £607 million primarily reflecting the benefit of improved pricing.Lovaza continued to hold broadly flat market share in a market which has declined approximately 7% compared with 2011, as economic pressures resulted in fewer doctor visits and reduced testing for asymptomatic conditions such as very high triglycerides.

Metabolic

The decline in Metabolic product sales continued to reflect the loss of sales ofAvandia, and the impact of declining sales ofBonviva in Europe following the change in the deal structure.

Anti-bacterials

Anti-bacterials sales grew 5% in EMAP, primarily fromAugmentin, but this was more than offset by the impact of austerity measures in Europe, which encouraged pharmacy-level generic substitution, and generic competition in both Europe and the USA.

Oncology and emesis

Three new products,Votrient (up 88%46% to £183 million),Promacta (up 76% to £130 million)£186 million andArzerra (up 36%sales grew 23% to £60 million) all continued to grow strongly in the USA, Europe and EMAP.£75 million.Tykerb/Tyverb also grew (up 6%sales fell 13% to £239 million), with growth in the USA, EMAP and Japan offsetting a small decline in Europe.£207 million due to increased competition. BothHycamtin in Europe and argatrobanEmerging Markets and Argatroban in the USA wereUS continued to be adversely affected by generic competition.

In the USA,US, there were continued strong growth contributions fromVotrient (up 59%, up 56% to £91 million)£144 million, andPromacta, up 33% to £73 million, which benefited from the launch of a new indication for thrombocytopenia associated with Hepatitis C received during Q4 2012.Arzerra grew 18% to £46 million. The US performance also reflects contributions totalling £21 million fromTafinlar andMekinist, which were both launched in Q2 2013 as monotherapy treatments and achieved strong uptake in the BRAF V600 melanoma market during the first few months on the market. In January 2014,Tafinlar andMekinist were approved by the FDA for combination use.

In Europe, sales grew 28% to £339 million, led by sales ofVotrient, which increased by 91% to £130 million, as it continued to build market share in many markets.Revolade received approval in Europe for use in advanced soft-tissue sarcoma. Salesthrombocytopenia associated with Hepatitis C at the end of Q3 2013 and sales in the year increased by 47% to £55 million.Tafinlar was launched in Q3 2013 in certain markets and has achieved strong uptake in these early launch markets.

Emerging Markets sales grew 18% to £149 million led by strong growth ofVotrient (up 77% to £37 million) andPromacta grew 66%(up 92% to £54£22 million). In the regionTykerb was down 9% to £47 million, reflecting the continued effect of longer-term use data thatandHycamtin was addeddown 36% to the label in 2011.£7 million.

DermatologyCardiovascular, metabolic and urology

Sales in the category fell 5% primarily as a result of the impact of the conclusion of the Vesicare co-promotion agreement in Q1 2012.

TheAvodart franchise grew 10% to £857 million with 31% growth in sales ofDuodart/Jalyn.Avodart sales grew 5% to £648 million.

The increase in Metabolic product sales primarily reflected higher sales ofProlia in Europe and EMAP.

Other pharmaceuticals

Sales of Anti-virals more than doubled reflecting tender shipments ofRelenza in Japan.

Augmentin sales grew 5% to £630 million with strong growth in Emerging Markets, reflecting, in part, a comparison with some supply interruptions in 2012.Zinnat sales were flat at £169 million, andZinacef sales fell 14% to £55 million.

Dermatology sales declined 2%5% to £850£631 million, primarily as a result of the decline in the USA (down 14%US, down 37% to £228 million)£115 million, which sufferedcontinued to suffer from the impact of generic competition, particularly toEvoclinBactroban,ExtinaDuac andDuacSoriatane. European sales (up 5% to £156 million) benefited from, together with the acquisition ofToctino in the second halfeffect of the year. EMAPdisposal of a number of tail brands in Q2 2013. Emerging Markets sales grew 7%8% to £388£289 million, reflecting strong growth in the promoted brands ofBactroban,Dermovate andBactrobanDuac.

Rare diseases particularly in Middle East/Africa and Latin America. European sales grew 6% to £170 million.

Volibris grew 35%, up 21% to £127£147 million, led by a strong performance in Japan.andMepron sales increased 26%, up 8% to £93£101 million, primarily as a resultwere the main drivers of a favourable adjustment to US accruals for returns and rebates recordedthe 7% growth in the fourth quarter.Rare diseases category.Flolan sales fell 25%16% to £135£103 million, largelyprimarily as a result of the biennial price reduction in Japan in Q2 2012 and continued generic competition in the US and Europe.

Immuno-inflammation

In August 2012, we acquired Human Genome Sciences, Inc. (‘HGS’) and from that time recorded all sales ofBenlysta. Prior to acquisition, in the USA we recorded as turnover our share of gross profit under the co-promotion agreement with HGS. ReportedBenlysta turnover was £70 million, of which £65 million arose in the USA.year was £146 million, with £134 million in the US. Total in-market sales ofBenlysta in the USA for the yearUS in 2012 were £96 million.

ViiV Healthcare (HIV)

ViiV Healthcare sales declined by 10%, withof £1,386 million were flat as sales in the USA down 22%US were up 5%, Europe down 3%, and EMAP up 3%Emerging Markets down 12%. Sales growth inEpzicom/Kivexa (upsales increased 14% to £763 million andSelzentry was up 10% to £665 million)£143 million.Tivicay recorded sales of £19 million from the early stages of its launch in the US, which started in August 2013.Tivicay was approved in Europe in January 2014 andSelzentry (up 20% to £128 million) launches are planned in several markets throughout 2014. Growth contributions within this business were more than offset by declines in the mature portion of the portfolio, mainlyCombivir, down 36% to £116 million

Established Products

Established Products declined 8% to £3,874 million as sales of Lovaza fell 5% to £584 million as a 30%result of increased competition and the decline in the mature portfolio,non-statin dyslipidemia prescription market. Declines in Zeffix and Hepsera reflected the sales decline in China.

Serevent sales were down 10%. Seroxat/Paxil sales fell 16% to £285 million, primarily due to generic competition in Japan and Europe andRequip sales fell 18% to £125 million reflecting generic competition in the US and Europe.Lamictal sales fell 7% to £557 million, primarily as a result of generic competition toLamictal XRin the USAUS, which started in Q1 2013. Sales of theLamictal franchise in the US fell 18% toCombivir andEpivir. £276 million.

Vaccines turnover

Performance of the Vaccines business improved towards the end of the year, with a significant increase in tender sales in the fourthlast quarter. The 2% overall declineincrease in Vaccines sales was primarilyprincipally attributable to the growth ofInfanrix/Pediarix,Fluarix/FluLaval andBoostrix, which was largely offset by the decline ofCervarix in Japan, reflecting the suspension of the recommendations for the use of HPV vaccines in Japan, together with an adverse comparison with strongCervarix sales in 2011,2012, which benefited from the final stages of the HPV vaccination catch-up programme in Japan, now complete.Japan.Cervarix sales declined 46%37% to £270£172 million. ExcludingCervarix, in Japan, Vaccines sales increased by 4%5%.

Infanrix/Pediarix sales increased 9% to £862 million, with the growth primarily reflecting stronger tender shipments in Europe and Emerging Markets as well as the benefit in the US of a competitor supply shortage.Boostrix sales, which also benefited from a competitor supply issue in the US, grew 19% to £288 million.

The previously announced Japanese Vaccines joint venture between GSK and Daiichi Sankyo Co., Ltd started operations on 2 July. The JV holdsSales of hepatitis vaccines fell 4% to £629 million, primarily reflecting lower sales in the development and commercial rights for existing preventativeUS as a result of the return of competing vaccines from both parent companies. We sell vaccines intoto the JV at an agreed upon price, and this is reflected in turnover inmarket during the second half of 2012, which was reducedtogether with declines in Europe and China.

Synflorix sales increased 2% to £405 million, helped by approximately £12strong tender sales in Middle East/Africa and Latin America.

Rotarix sales grew 5% to £375 million, with strong growth in Middle East/Africa and Europe partially offset by the changeimpact of increased competition in structure. Both companies have an equal stakeJapan.

Fluarix, FluLaval sales increased 25% to £251 million, following the launch of the Quadrivalent formulation in the joint venture and share the profits equally.US.

Consumer Healthcare turnover

Consumer Healthcare turnover was flat forgrew 2% in the year. Excluding the non-core OTC brands that were divested in early 2012, turnover increased by 6%, reflecting strong growth in Rest of World markets (47% of 2012 sales) of 12%, while the USA, excluding the non-core OTC brands, grew 2% for the year and Europe was flat.

Total wellnessWellness

Total wellness sales, were down 9% to £2,057 million, but excluding the non-core OTC brands that were divested in H1 2012, fell 5%. In both the US and Europealli reported strong growth, in large part due to being out of stock for much of 2012. A severe cold and flu season in early 2012, the category delivered 3%2013 helped drive growth despite a number of supply interruptions. Gastro-intestinal health,several respiratory brands includingTumsColdrex,Beechams andEnoPanadol Cold and Flu. This growth was partly offset by a 57% reduction in sales in China ofContac, led category growth at 11%. Pain Management, includingdue to new shelving requirements, andPanadolFenbid, also registered strong growthdown 31%, in advance of 8% driven by growth in emerging markets. The Smoking reduction and cessation and Respiratory health categories both delivered 4% growth. Sales ofalli declined by 72% as a result of the supply interruption that was not resolved until late in the third quarter of 2012.mandatory price reductions.

Oral care

Strong growth in Oral care sales grew 8% to £1,806 million. Thewas led by growth in Specialist oral health, withSensodyne Sensitivity &and Acid Erosion was the strongest performing brand, with saleserosion up 15% to £706 million. Strong results from Dentureand denture care products also helped to offset a 2% decline inbrands up 9%, butAquafresh sales.was down 12%.

Nutrition

Nutrition sales grew 8%. Family nutrition (Horlicks) grew 14% due to12% with strong growth in India. TheRest of World markets, led byMaxinutritionHorlicks, up 14%, andBoost adult nutrition business delivered 21% sales growth forin India and key expansion markets in the year. Strong emerging market growth ofLucozade offset declines in Europe.sub-continent.

Skin health

Skin health sales grew 6%, led byAbreva in the US.

Regional performance

US sales grew 1%, led by strong contributions from Oral care brands,alli andAbreva. This was partially offset by declines in Gastro-intestinal products, reflecting increased competitor activity, and Smoking control products impacted by supply disruptions. In Europe, sales declined 2% helped by sales ofalli and strong growth in products for Respiratory health and Pain.

Oral care sales in Europe were flat, at £257 million. StrongBactrobanas strong growth in ChinaSensodyne and solid results in Lipdenture care (includingAbreva) werebrands was offset by a decline inAquafresh, due in part to supply issues in Q4 2013. Rest of World markets grew 5%, reflecting growth across most categories and markets, particularly in India, partially offset by a 23% reduction of sales in China, mainly due to the reduction in sales ofHindsContac in Mexico.

Core results

Core results exclude the following items from total results: amortisation and impairment of intangible assets (excluding computer software) and goodwill; major restructuring costs, including those costs following material acquisitions; legal charges (net of insurance recoveries) and expenses on the settlement of litigation and government investigations; other operating income other than royalty income; disposals of associates, products and businesses, and acquisition accounting adjustments for material acquisitions, together with the tax effects of all of these items. The analyses that follow do not exclude divestments completed in 2013.

We useMajor restructuring costs charged in arriving at operating profit include costs arising under the Operational Excellence restructuring programme, initiated in 2007 and expanded in 2009, 2010 and 2011, the Major Change restructuring programme initiated in 2013 and restructuring costs following the acquisitions of Human Genome Sciences, Inc. in August 2012 and Stiefel Laboratories, Inc. in July 2009.

Reconciliations of core results to total results are presented on page 65.

Core results reporting basis to managealigns business performance reporting around the underlying trading performance of the Group and its primary growth drivers by removing the definitionvolatility inherent in many of the non-core items.

Core results reporting is utilised as the basis for internal performance reporting and the core results is set out on page 58are presented and discussed in this Financial review as we believe that this approach provides investors with a clearer view of the GSK Annual Report 2013 under the heading “Core results reporting”. The information set forth under this heading is incorporated by reference herein. A reviewunderlying trading performance of the Group. We also believe that this approach should make the Group’s results more comparable with the majority of our peers, many of which use similar forms of underlying performance reporting to discuss their results, although the precise calculations may differ. The Financial review also presents and discusses the total results is set out on pages 22 to 25. The reconciliation of total results to core results is presented on page 14.the Group.

Cost of sales

Core cost of sales increased to 26.9%was 28.5% of turnover (2011 – 26.6%). This primarily reflectedcompared with 26.9% in 2012. Net of currency effects of 0.3 percentage points and the impact of lowera 0.3 percentage point reduction to the 2012 cost of sales lower volumespercentage due to the settlement in early 2012 of a royalty agreement and the conclusion of the Vesicare agreement, the cost of sales percentage increased 1.0 percentage points. This reflected the expected impact of the unwinding of costs of manufacturing volume shortfalls, adverse regionalmix and product mixthe impact of preparing for the launches of new pipeline products, partially offset by ongoing cost management, better price realisation and one-off royalty and pension adjustments.restructuring benefits.

Selling, general and administration

Core SG&A costs as a percentage of sales were 29.9% compared with 29.2% in 2011 reflecting, flat costs on a turnover decline2012, as the net favourable year-on-year benefits of 1%. Investmentsthe Group’s restructuring programmes and ongoing cost management efforts funded investments in growth businesses and preparations for new product launches as well as additional HGS costs were funded by ongoing cost management and one-off benefits.launches.

Advertising and promotion expenses decreased 4%2%, sellingSelling and distribution was flatdecreased 1% and general administration increased 5%6%.

Research and development

Core R&D expenditure declined 5%3% to £3,400 million (12.8% of turnover) compared with £3,485 million (13.2% of turnover) compared with £3,689 million in 2011 (13.5%2012. This reflected the completion of turnover). Ongoinga number of large trials, the phasing of ongoing project spending as well as continuing cost management, including one-off benefits,management.

We remain focused on delivering an improved return on our investment in R&D. Sales contribution, reduced attrition and some beneficial phasing effects, more than funded additional HGS costs.cost reduction are all important drivers of an improving internal rate of return. R&D expenditure is not determined as a percentage of sales, but instead capital is allocated using strict returns based criteria.

The operations of Pharmaceuticals R&D are broadly split into Discovery activities (up to the completion of phase IIa trials) and Development work (from phase IIb onwards).

The table below analyses core R&D expenditure by these categories: