Glaxosmsc 5.25% Regulatory News (AG99)

Publication of GlaxoSmithKline Capital plc'sAnnual Report 2011

Today, 24 April 2012, GlaxoSmithKline Capital plc published on the GlaxoSmithKline Group website, www.gsk.com, its Annual Report in respect of the year ended 31 December 2011.

Copies of GlaxoSmithKline Capital plc's 2011 Annual Report, have been submitted to the UK Listing Authority's National Storage Mechanism and will shortly be available for inspection at http:/www.morningstar.co.uk/UK/NSM

In accordance with the requirements of Rule 4.1 of the Disclosure and Transparency Rules of the UK Financial Services Authority which apply in respect of accounting periods commencing after 20 January 2007, Appendix A to this announcement contains GlaxoSmithKline Capital plc's 2011 Annual Report, which includes a description of principal risks and uncertainties together with a responsibility statement.

V A Whyte

Company Secretary

24 April 2012

Cautionary statement regarding forward-looking statements

Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, GSK and the company caution investors that any forward-looking statements or projections made by GSK and the company, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect the Group's and the company's operations are described under 'Principal risks and uncertainties' in Appendix A of this announcement and under 'Risk factors' in the 'Financial review & risk' section in the GlaxoSmithKline plc Annual Report 2011 included as exhibit 15.2 to the GlaxoSmithKline plc Annual Report on Form 20-F for 2011.

Appendix A

GlaxoSmithKline Capital plc

(Registered number: 2258699)

Directors' report and financial statements

for the year ended 31 December 2011

Registered office address:

980 Great West Road

Brentford

Middlesex

TW8 9GS

GlaxoSmithKline Capital plc

Directors' report and financial statements

for the year ended 31 December 2011

Pages

Directors' report

1-4

Independent auditors' report

5-6

Profit and loss account

7

Statement of total recognised gains and losses

8

Balance sheet

9

Notes to the financial statements

10-19

The Directors submit their report and the audited financial statements for the year ended 31 December 2011.

Principal activities

GlaxoSmithKline Capital plc ('the Company') issues European Medium Term Notes and provides financial services to fellow subsidiaries of the GlaxoSmithKline Group of companies ('the Group'). The Directors do not envisage any change to the nature of the business in the foreseeable future.

Review of business

The Company made a profit for the financial year of £2,650,000 (2010: profit of £2,476,000). The Directors are of the opinion that the current level of activity and the year-end financial position are satisfactory and will remain so in the foreseeable future.

The profit for the financial year of £2,650,000 will be transferred to reserves (2010: profit for the financial year of £2,476,000 transferred to reserves).

All European Medium Term Notes in issue pay interest on a fixed rate basis. No new issuances were made during the year ended 31 December 2011.

Principal risks and uncertainties

The Directors of GlaxoSmithKline plc manage the risks of the Group at a group level, rather than at an individual business unit level. For this reason, the Company's Directors believe that a discussion of the Group's risks would not be appropriate for an understanding of the development, performance or position of the Company's business. The principal risks and uncertainties of the Group, which include those of the Company, are discussed in the Group's 2011 Annual Report which does not form part of this report.

In addition to the Financial Risk Management disclosed in the Treasury Policy Note on pages 11 and 12 (Note 2), at a Company level, the principal risks and uncertainties relevant to the Group and the Company's business and financial condition and results would include risks from Global and Political Economic Conditions, Reliance on Information Technology, and the potential impact of new or revised Accounting Standards.

Global and Political Economic Conditions

Many of the world's largest economies, including the major markets in which the Group operates, and financial institutions have in the recent past faced extreme financial difficulty, including a decline in asset prices, liquidity problems and limited availability of credit. The economic uncertainty continued in 2011, with multiple downgrades of sovereign credit ratings, particularly in the Eurozone. High levels of sovereign debt are negatively impacting growth in the global economy. It is uncertain how long these effects will last, or whether economic and financial trends will worsen or improve. The Group has no control over changes in inflation, interest rates, foreign currency exchange rates and controls or other economic factors that may affect it or the Company, or the possibility of legal and regulatory changes in jurisdictions in which the Group or the Company operates.

Reliance on Information Technology

The Group is increasingly dependent on information technology systems, including Internet-based systems, for internal communication as well as communication with financial counterparties. Any significant disruption of these systems, whether due to computer viruses or other outside incursions, could materially and adversely affect the Group's and Company's operations.

Impact of New or Revised Accounting Standards

New or revised accounting standards, rules and interpretations circulated from time to time by the standard setting board could result in changes to the recognition of income and expense that may adversely impact the Group's and the Company's reported financial results. The Group believes that it complies with the appropriate regulatory requirements concerning their financial statements and disclosures.

Key performance indicators (KPIs)

The Directors of GlaxoSmithKline plc manage the Group's operations on a business sector basis. For this reason, the Company's Directors believe that analysis using key performance indicators for the Company is not necessary or appropriate for an understanding of the development, performance or position of the Company's business. The development, performance and position of the Group are discussed in the Group's 2011 Annual Report which does not form part of this report.

Results and dividends

The Company's results for the financial year are shown in the profit and loss account on page 7.

No dividend is proposed to the holders of Ordinary Shares in respect of the year ended 31 December 2011 (2010: £nil).

Directors and their interests

The Directors of the Company who were in office during the year and up to the date of signing the financial statements were as follows:

Edinburgh Pharmaceutical Industries Limited

Glaxo Group Limited

Mr J S Heslop

Resigned on 31 March 2011

Mr S P Dingemans

Appointed on 1 April 2011

No Director had, during the year or at the end of the year, any material interest in any contract of significance to the Company's business, with the exception of the Corporate Directors, where such an interest may arise in the ordinary course of business.

The following interests of the Directors in office at the year-end in the shares of the ultimate parent undertaking, GlaxoSmithKline plc, have been notified to the Company.

Name

Ordinary sharesAt 31.12.11

Mr S P Dingemans

40,171

Performance Share Plan awards

At 31.12.11

Mr S P Dingemans

200,716

All share awards are over Ordinary Shares of GlaxoSmithKline plc.

The details of the above-mentioned Plans are disclosed in the 2011 Annual Report of GlaxoSmithKline plc.

Directors' indemnity

Each of the Directors benefits from an indemnity given by the Company under its articles of association. This indemnity is in respect of liabilities incurred by the Director in the execution and discharge of its duties.

In addition, each of the Directors who is an individual benefits from an indemnity given by another Group company, GlaxoSmithKline Services Unlimited. This indemnity is in respect of liabilities arising out of third party proceedings to which the Director is a party by reason of his engagement in the business of the Company.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year.

In preparing these financial statements, the Directors are required to:

l

Select suitable accounting policies and then apply them consistently;

l

Make judgements and estimates that are reasonable and prudent; and

l

State whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditors

As far as each of the Directors are aware, there is no relevant audit information of which the Company's auditors are unaware, and the Directors have taken all the steps that ought to have been taken to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Going concern

The Directors believe that preparing the financial statements on the going concern basis is appropriate due to the continued financial support of the intermediate parent company GlaxoSmithKline Finance plc. The Directors have received confirmation that GlaxoSmithKline Finance plc intends to support the Company for at least one year after these financial statements are signed. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Independent Auditors

PricewaterhouseCoopers LLP are willing to continue in office as auditors and resolutions dealing with their reappointment and remuneration will be proposed at a General Meeting of the Company.

By order of the Board

P Blackburn

For and on behalf of Glaxo Group Limited

Corporate Director

19 April 2012

Independent auditors' report to the members of GlaxoSmithKline Capital plc

We have audited the financial statements of GlaxoSmithKline Capital plc for the year ended 31 December 2011 which comprise the Profit and Loss Account, the Statement of Total Recognised Gains and Losses, the Balance Sheet and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page 3, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Directors' Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

l

give a true and fair view, of the state of the Company's affairs as at 31 December 2011 and its profit for the year then ended;

l

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

l

have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matters prescribed by the companies Act 2006

In our opinion the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

l

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

l

the financial statements are not in agreement with the accounting records and returns: or

l

certain disclosures of directors' remuneration specified by law are not made; or

l

we have not received all the information and explanations we require for our audit.

The Company has passed a resolution in accordance with Section 506 of the Companies Act 2006 that the auditor's name should not be stated.

PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

19 April 2012

Profit and loss account

for the year ended 31 December 2011

2011

2010

Notes

£'000

£'000

Operating (loss)/profit

3

(403)

476 

Interest receivable and similar income

4

418,846 

409,623 

Interest payable and similar charges

5

(414,791)

(406,631)

Net interest receivable

4,055 

2,992 

Profit on ordinary activities before taxation

3,652 

3,468 

Tax on profit on ordinary activities

6

(1,002)

(992)

Profit for the financial year

11

2,650 

2,476 

The results disclosed above relate entirely to continuing operations.

There is no difference between the profit on ordinary activities before taxation and the profit for the financial year stated above and their historical cost equivalents.

Statement of total recognised gains and losses

for the year ended 31 December 2011

2011

2010

Note

£'000

£'000

Profit for the financial year

2,650

2,476

Cash flow hedge reserve recycled to profit and loss account

11

194

411

Total recognised gains relating to the year

2,844

2,887

Balance Sheet

As at 31 December 2011

2011

2010

Notes

£'000

£'000

Debtors: amounts due after one year

7

5,619,158 

8,262,755 

Debtors: amounts due within one year

7

2,651,519 

136,617 

Debtors

7

8,270,677 

8,399,372 

Cash at bank and in hand

4 

4 

Current assets

8,270,681 

8,399,376 

Creditors: amounts falling due within one year

8

(2,633,323)

(134,716)

Net current assets

5,637,358 

8,264,660 

Total assets less current liabilities

5,637,358 

8,264,660 

Creditors: amounts falling due after more than one year

8

(5,640,562)

(8,270,708)

Net liabilities

(3,204)

(6,048)

Capital and reserves

Called up share capital

10

100 

100 

Profit and loss account

11

3,725 

1,075 

Cash flow hedge reserve

11

(7,029)

(7,223)

Total shareholders' deficit

12

(3,204)

(6,048)

The financial statements on pages 7 to 19 were approved by the Board of Directors on 19 April 2012 and were signed on its behalf by:

P Blackburn

For and on behalf of Glaxo Group Limited

Corporate Director

1

Accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below. In addition, the Company has taken advantage of the exemption within FRS 29, 'Financial Instruments: Disclosure' from the disclosure requirements of this standard on the basis that the Company's results are included in the publicly available consolidated financial statements of the Group, which include disclosures that comply with IFRS 7, 'Financial Instruments: Disclosures', which is equivalent to FRS 29.

(a)

Basis of accounting

These financial statements have been prepared on the going concern basis due to ongoing support from the intermediate parent undertaking GlaxoSmithKline Finance plc, under the historical cost convention, the accounting policies set out below, which have been applied consistently, and in accordance with the Companies Act 2006 and applicable UK Accounting Standards.

(b)

Foreign currency transactions

Foreign currency transactions are booked in local currency at the foreign exchange rate ruling on the date of the transaction, or at the foreign exchange forward rate if hedged by a foreign exchange forward contract. Foreign currency monetary assets and liabilities are translated into local currency at foreign exchange rates ruling at the balance sheet date, or at the forward rate. Foreign exchange differences are included in operating profit or loss.

(c)

Dividends paid and received

Interim dividends paid and received are included in the profit and loss account in the year in which the related dividend is actually paid or received. Final dividends are recorded in the profit and loss account upon shareholder approval.

(d)

Interest

Interest receivable and similar income and interest payable and similar charges are recognised on an accruals basis.

(e)

Bond expenses

Bond expenses are included as a component of the debt principal and are amortised using the effective interest rate over the term of the debt.

(f)

Expenditure

Expenditure is recognised in respect of goods and services received when supplied in accordance with contractual terms. Provision is made when an obligation exists for a future liability in respect of a past event and where the amount of the obligation can be reliably estimated.

(g)

Debt instruments

Debt instruments are stated at the amount of net proceeds adjusted to amortise the finance cost of debt using the effective interest rate method over the term of the debt, and for movements in the fair value of the bond, where hedge accounting is applicable.

(h)

Taxation

Current tax is provided at the amounts expected to be paid, applying tax rates that have been enacted or substantively enacted by the balance sheet date.

The Company accounts for taxation which is deferred or accelerated by reason of timing differences which have originated but not reversed by the balance sheet date. Deferred tax assets are recognised as recoverable when it is regarded as more likely than not that there will be suitable taxable profits against which to recover the deferred tax assets.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse. Deferred tax liabilities and assets are not discounted.

2

Treasury Policy

Corporate Treasury policies noted below are those operated by GlaxoSmithKline Capital plc.

The Company's role in managing the Group's objectives is primarily to manage the Group's external funding requirements and the resulting financial risk.

(a)

Treasury

The Company's ultimate parent undertaking, GlaxoSmithKline plc, is a UK-based business, reporting in Sterling and paying dividends out of Sterling profits.

The role of Corporate Treasury in the Group is to manage and monitor the Group's external and internal funding requirements and financial risks in support of the Group's strategic objectives. Treasury activities are governed by policies and procedures approved by the Board of Directors of GlaxoSmithKline plc (most recently on 14 July 2011) and monitored by the Treasury Management Group (TMG), chaired by the Chief Financial Officer. The Group maintains Treasury control systems and procedures to monitor foreign exchange, interest rate, liquidity, credit and other financial risks.

(b)

Liquidity

The Group centrally manages cash reserves in order to meet anticipated funding requirements. The cash flow forecast and funding requirements are monitored by the TMG on a monthly basis. During 2011, the Group's cash balances relative to the net debt portfolio was reviewed, including the sources of debt in order to improve the efficiency of the Group's balance sheet. The Group's aim is to reduce the effective cost of funding by maintaining lower levels of cash and diversifying the sources of funding under the current low interest rate environment.

(c)

Treasury operations

The objective of Treasury activity is to manage the post-tax net cost/income of financial operations to the benefit of Group earnings. The Company does not operate as a profit centre.

The Group uses a variety of financial instruments, including derivatives, to finance its operations and to manage market risks from those operations. These derivative instruments, principally comprising forward foreign currency contracts, interest rate and currency swaps, are used by Corporate Treasury to swap borrowings and liquid assets into the currencies required for Group purposes and to manage exposure to funding risks from changes in foreign exchange rates and interest rates.

The Group balances the use of borrowings and liquid assets having regard to:

l

the cash flow from operating activities and the currencies in which it is earned;

l

the tax cost of intra-group distributions;

l

the currencies in which business assets are denominated; and

l

the post-tax cost of borrowings compared to the post-tax return on liquid assets.

Liquid assets surplus to the immediate operating requirements of Group companies are invested and managed centrally by Corporate Treasury. Requirements of Group companies for operating finance are met whenever possible from central resources.

External borrowings are managed by Corporate Treasury which comprise a portfolio of long and medium-term instruments in addition to short-term finance.

The Group does not hold or issue derivative financial instruments for trading purposes and the Group's Treasury Policies specifically prohibit such activity. All transactions in financial instruments are undertaken to manage the risks arising from underlying business activities, not for speculation.

(d)

Counterparty and Maturity risk

The Group's policy on counterparty risk management is to work with a select group of relationship banks. Counterparty limits are assigned to each of the Group's banking and investment counterparties based in long-term credit ratings from Moody's and Standard and Poor's, which are monitored daily and independently by the Corporate Compliance Officer (CCO). A full counterparty analysis is presented to the TMG annually for approval.

The Group manages its net borrowing requirement through a portfolio of long and medium-term borrowings, including bonds and have also used short-term finance through a US commercial paper programme.

The Group has a Euro Medium Term Note programme of £15 billion, of which £8.2 billion was in issue as at 31 December 2011 and a US shelf registration statement, of which $10 billion (£6.5 billion) was in issue as at 31 December 2011. The TMG monitors the cash flow forecast and funding requirement of the Group on a monthly basis. The Group's borrowings mature at dates between 2012 and 2042.

(e)

Interest rate risk management

The Group's policy on interest rate risk management requires that the amount of net borrowings at fixed rates increases with the ratio of forecast net interest payable to Group trading profit. At 31 December 2011, £nil (31 December 2010: £nil) of the Company's net borrowings were exposed to floating interest rates after the effects of hedging.

(f)

Foreign exchange risk management

The Group seeks to denominate borrowings in the currencies of its principal assets and cash flows. These are primarily denominated in US dollars, Euros and Sterling. Certain borrowings are swapped into other currencies as required for Group purposes.

(g)

Capital management

The Group's capital structure is managed through an appropriate mix of debt and equity aimed to maximise returns to shareholders, whilst monitoring credit ratings that ensure flexibility and access to debt capital markets on attractive terms.

3

Operating (loss)/profit

2011

2010

£'000

£'000

The following item has been charged in operating (loss)/profit:

Exchange (losses)/gains on foreign currency transactions

(293)

511 

Management fee

(41)

(35)

GlaxoSmithKline Services Unlimited provides various services and facilities to the Company including finance and administrative services for which a management fee is charged. Included in the management fee is a charge for auditor remuneration of £31,006 (2010: £30,103). In 2010 foreign exchange differences were included in Note 4. To ensure compliance with Note 1(b), £293,000 relating to foreign exchange losses (2010: £511,000) foreign exchange profit is now shown in the above table.

4

Interest receivable and similar income

2011

2010

£'000

£'000

On loans with Group undertakings

418,846 

409,623 

In 2010 foreign exchange differences were included in Note 4. To ensure compliance with Note 1(b), £293,000 relating to foreign exchange losses (2010: £511,000) foreign exchange profit is shown in Note 3.

5

Interest payable and similar charges

2011

2010

£'000

£'000

Cash flow hedge recycling from equity

(194)

(411)

Interest on European Medium Term Notes

(406,699)

(398,159)

Amortisation of bond expenses

(7,898)

(8,061)

(414,791)

(406,631)

6

Tax on profit on ordinary activities

2011

2010

Tax charge based on profits for the financial year

£'000

£'000

Current tax:

UK corporation tax at 26.5% (2010: 28%)

853 

850 

Over provision in previous years

- 

(1)

Total current tax

853 

849 

Deferred tax:

Origination and reversal of timing differences

106 

121 

Change in tax rate - impact on deferred tax

43 

22 

Total deferred tax

149 

143 

Tax on profit on ordinary activities

1,002 

992 

The tax assessed for the year is lower (2010: lower) than the standard rate of corporation tax in the UK for the year ended 31 December 2011 of 26.5% (2010: 28%). The differences are explained below:

Reconciliation of current tax charge

£'000

£'000

Profit on ordinary activities at the UK statutory rate 26.5% (2010: 28%)

968 

971 

Effects of:

Permanent Disallowables - interest treated as paid by ultimate parent

109,891 

113,857 

Permanent Deductions - Group relief received for no payment

(109,891)

(113,857)

Adjustments to tax charge in respect of previous years

- 

(1)

Other timing differences

(115)

(121)

Current tax charge for the year

853 

849 

The main rate of UK corporation tax reduced from 28% to 26% with effect from 1 April 2011. Legislation to further reduce the main rate of corporation tax from 26% to 25% from 1 April 2012 was included in the Finance Act 2011. These tax changes became substantively enacted on 29 March 2011 and 5 July 2011 respectively, and hence the effect of the changes on the deferred tax balances has been included in the figures above.

On 21 March 2012 the Chancellor announced a further reduction in the main rate of UK corporation tax to 24 per cent with effect from 1 April 2012. This change became substantively enacted on 26 March 2012. The effect of the change would create an additional reduction in the deferred tax asset at 31 December 2011 of approximately £17,000. This has not been reflected in the figures above as the rate change was not substantively enacted at the balance sheet date.

The Chancellor also proposed changes to further reduce the main rate of corporation tax by one per cent per annum to 22 per cent by 1 April 2014. These changes have not yet been substantively enacted and are not reflected in the figures above. The effect of the further reductions from 24 per cent to 22 per cent, if these were applied to the deferred tax balance at 31 December 2011, would be to reduce the deferred tax asset by approximately £35,000.

7

Debtors

2011

2010

£'000

£'000

Amounts due within one year

Amounts owed by Group undertakings

2,651,088

136,037

Deferred tax (see Note 9)

431

580

2,651,519

136,617

Amounts due after more than one year

Amounts owed by Group undertakings

5,619,158

8,262,755

8,270,677

8,399,372

Amounts owed by Group undertakings include net proceeds of bond issuances that have been advanced as loans totalling £8,089,205,000 (2010: £8,228,764,000) these are unsecured with interest charged at between 3.2% and 6.5% per annum and repayable at maturity dates between 2012 and 2042.

8

Creditors

2011

2010

£'000

£'000

Amounts falling due within one year

Amounts owed to Group undertakings

2,574

-

Tax

853

850

Accruals and deferred income

132,129

133,866

European Medium Term Notes

2,497,767

-

2,633,323

134,716

Amounts falling due after one year

European Medium Term Notes

5,640,562

8,270,708

8,273,885

8,405,424

The tax creditor contains amounts which will be paid to fellow Group companies.

Accruals and deferred income relates to accrued interest payable on European Medium Term Notes.

Debt is unsecured and there are no debt covenants in relation thereto.

Loans due after one year are repayable over various periods as follows:

2011

2010

£'000

£'000

Between one and two years

-

2,558,872 

Between two and five years

1,326,270

1,358,208 

After five years

4,314,292

4,353,628 

5,640,562

8,270,708 

The loan repayable between two and five years carries an interest rate of 3.875% (EUR) with a repayment date of 6 July 2015.

Loans repayable in Euros after five years have an interest rate of 5.625% and 4%, with repayment dates of 13 December 2017 and 16 June 2025 respectively. Sterling loans repayable after five years have an interest rate of 5.25%, 6.375% and 5.25% with repayment dates of 19 December 2033, 9 March 2039 and 10 April 2042 respectively.

The loans due after 5 years are repayable other than by instalments.

9

Deferred tax asset

2011

2010

£'000

£'000

Short term timing differences

431

580 

431

580 

Deferred tax asset

Total

£'000

At 1 January 2011

580 

Charge for the year

(106)

Change in tax rate - impact on deferred tax

(43)

At 31 December 2011

431 

10

Called up share capital

2011

2010

2011

2010

Number ofshares

Number ofshares

£'000

£'000

Authorised

Ordinary Shares of £1 each (2010: £1 each)

100,000

100,000

100

100

Issued and fully paid

Ordinary Shares of £1 each (2010: £1 each)

100,000

100,000

100

100

11

Reserves

Profit and Loss Account

Cash Flow Hedge Reserve

TotalReserves

£'000

£'000

£'000

At 1 January 2011

1,075

(7,223)

(6,148)

Profit for the financial year

2,650

- 

2,650 

Movement in cash flow hedge reserve

-

194 

194 

At 31 December 2011

3,725

(7,029)

(3,304)

The cash flow hedge reserve relates to the cumulative fair value changes of derivatives representing pre-hedging of debt-issuances. The reserve is amortised over the life of the subsequently issued bonds.

12

Reconciliation of movements in shareholders' deficit

2011

2010

£'000

£'000

Profit for the financial year

2,650 

2,476 

Movement in cash flow hedge reserve

194 

411 

Net deduction in shareholders' deficit

2,844 

2,887 

Opening shareholders' deficit