GSK plc 20-F/A, filed Apr 17, 2023
GSK plc (GSK)
About this 20-F/A
GSK plc filed this 20-F/A on April 17, 2023, covering the fiscal year ended December 31, 2022.
Table of Contents
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange On Which Registered | ||
Ordinary Shares of Par value 31 1 ⁄4 pence each |
| Accelerated filer ☐ | Non-accelerated filer ☐ |
Emerging growth company |
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
| U.S. GAAP ☐ | |
Other ☐ | ||||||
| by the International Accounting Standards Board | ☒ |
| Item 18 | Financial Statements |
| • | “Consolidated income statement” on page 182; |
| • | “Consolidated statement of comprehensive income” on page 182; |
| • | “Consolidated balance sheet” on page 183; |
| • | “Consolidated statement of changes in equity” on page 184; |
| • | “Consolidated cash flow statement” on page 185; and |
| • | “Notes to the financial statements” on pages 186 to 267 of the GSK Annual Report 2022 is incorporated herein by reference. |
| • | Obtained the Group’s assessment of the key inputs and assumptions used in the forecasts and challenged the reasonableness of these, including through enquiries of key individuals from the senior leadership team, commercial strategy team and key personnel involved in the budgeting and forecasting process, and inspection of supporting evidence; |
| • | Challenged the US volume assumptions made by the Group to estimate sales forecasts. This involved benchmarking forecast market share data against external data, such as total prescription volumes and new patient prescription volumes, in order to assess for any sources of contradictory evidence; |
| • | Challenged the reasonableness of US pricing assumptions by the Group, by comparing the forecasted Returns and Rebates rate by product against the current rate, and assessing the forecasted Returns and Rebates against comparable products considering expected changes in payer policy and healthcare reform implications; |
| • | Considered the results of clinical studies undertaken in the year by the Group and key competitors in order to assess whether these are corroborative or contradictory to assumptions used in the product portfolio sales forecasts in the US; |
| • | Benchmarked the Group’s sales forecasts against those included in reports from nine analysts and considered sales forecasts on both a total ViiV basis and an individual product basis, assessing against identified contradictory data; and |
| • | Tested the controls over the key inputs and assumptions used in the valuation of the contingent consideration liability, including review controls over the sales forecasts of the treatment product portfolio used to value the ViiV CCL. |
| • | The utilisation rate, which is the portion of total sales that will be made into each payer channel, estimated by the Group in recording the accruals. The utilisation assumption is the most challenging of the key assumptions used to derive the accrual given that it is influenced by market demand and other factors outside the control of the Group; and |
| • | The time lag between the point of sale and the point at which exact rebate amounts are known to the Group upon receipt of a claim. Those payer channels with the longest time lag result in a greater accrued period, and therefore, a greater level of estimation uncertainty in estimating the period end accrual. |
| • | Challenged assumptions for a selection of utilisation rates, focusing on certain products where we concluded the accrual is most sensitive to these assumptions. Our challenge included comparison to historical utilisation rates, consideration of historical accuracy and drivers of market changes such as the impact of competition and macroeconomic trends; |
| • | Supplemented this with substantive analytical procedures by developing an independent expectation of the accrual balance for each of the key segments, based on historical claims received adjusted to reflect market changes in the period including an assessment of the time lag between the initial point of sale and the claim receipt. We then compared this independent expectation to those recorded to evaluate the appropriateness of the year ending accrual position; |
| • | Considered the historical accuracy of estimates and evaluated whether forecast assumptions had been appropriately updated in a selection of cases where the actual rebate claims differed to the amount accrued; |
| • | Evaluated the appropriateness of, and completeness of, period-end adjustments to the liability made as part of the ongoing review of the estimated accrual; and |
| • | Tested the key controls over the estimation of RAR accruals including the controls associated with the forecasting of utilisation rates process and the month-end accrual review controls. |
| • | Inquired with the key individuals from the corporate development team, commercial forecasting leads, and key personnel involved in the assets research and development process to discuss and evaluate the Group’s evidence to support the future pricing, volume, sales growth rates and probability of regulatory and technical success; |
| • | Evaluated the key inputs and assumptions applied in estimating sales and profit margin forecasts, including benchmarking of forecasts against external market data. This included independent market research of therapeutic area price points, price growth rates, and anticipated competitor market landscape, currently and at the time of forecast regulatory approval, plus assessment of any sources of contradictory evidence; |
| • | Inspected independent research and literature to consider corroborative and contradictory evidence to assess assumptions on probability of technical and regulatory success; |
| • | Compared the forecast sales and profit margin levels to the Plan data (asset by asset internal forecasts) approved by the GSK Leadership Team and the Board of Directors, where the in-development intangible asset is forecast to launch within the next 3-year period; |
| • | Assessed the historical accuracy of sales forecasts by performing retrospective reviews across marketed assets within the business; |
| • | Considered whether events or transactions that occurred after the balance sheet date but before the reporting date affect the conclusions reached on the carrying values of the assets and associated disclosures; |
| • | Engaged Internal Fair Valuation Specialists (IFVS) to assess the reasonableness of discount rates and valuation methodology; and |
| • | Tested review controls over the key inputs and assumptions used in the valuation of other intangible assets. The controls encompass review of the valuation models, which contain a number of assumptions such as the probability of technical and regulatory success, launch dates plus other revenue and cost assumptions. |
| • | Assessed and challenged provisions for uncertain tax positions through the evaluation of possible outcomes. Our procedures were focused on those jurisdictions where the Group has the greatest potential exposure and where the highest level of judgement is required; |
| • | Assessed the assumptions and judgements that are required to determine the range of possible outcomes for recognition and measurement of uncertain tax positions in compliance with the requirements of IFRIC 23; |
| • | Involved our transfer pricing specialists to evaluate the transfer pricing methodology of the Group and associated approach to provision recognition and measurement; |
| • | Considered evidence such as the actual results from the recent tax authority audits and enquiries, third-party tax advice obtained by the Group and our tax specialists’ own knowledge of market practice in relevant jurisdictions; and |
| • | Tested key controls over preparation, review and reporting of judgmental tax balances and transactions, which include provisions for uncertain tax provisions. |
| • | Consulted with technical accounting specialists to evaluate the entity’s accounting conclusions in respect of the relevant accounting standards for the demerger steps including: |
| • | the presentation of Consumer Healthcare results as a part of discontinued operations; |
| • | the calculation of the gain on demerger; and |
| • | the retained stake upon demerger. |
| • | Recalculated the gain on demerger and the fair value of the Consumer Healthcare business at the demerger date; |
| • | Tested the accuracy and completeness of the perimeters of the demerged business by inspecting legal agreements and recalculating the cumulative exchange differences arising on translation of the foreign currency net assets; |
| • | Engaged tax specialists to assess the impact of the demerger on the Group tax balances; |
| • | Engaged IT specialists to assess the impact on the relevant IT systems prior to the demerger of Consumer Healthcare; and |
| • | Tested key controls over IT and the reporting of the Consumer Healthcare Demerger including the review and approval of the accounting considerations, accuracy and completeness of transactions to the demerger date, the cumulative exchange reserve and the adjustments required in relation to the classification between continued and discontinued operations. |
| • | Whether the outcome will result in a probable outflow, particularly where the outcome of litigation is uncertain and subject to additional court proceedings; |
| • | The determination of a reliable estimate can be made of the amounts of the obligation; and |
| • | Tested the Group’s controls over the completeness of provisions, the robustness of the provision against the requirements of IAS 37, the appropriateness of judgements used to determine a ‘best estimate’ and completeness and accuracy of data used in the process; |
| • | Evaluated the assessment of the provisions, associated probabilities, and potential outcomes in accordance with IAS 37; |
| • | Evaluated the methodology, data and significant judgements and assumptions used in the valuation of the provisions are appropriate in the context of the applicable financial reporting framework; |
| • | Inquired with and inspected correspondence from the Group’s internal and external counsel to assess the litigation matter and evaluate the Group’s significant judgements and assumptions; |
| • | Where no provision was made, we critically evaluated the Group’s conclusion supportive and contradictory evidence and the requirements of IAS 37, particularly with respect to the Zantac matter; |
| • | In respect of the Zantac matter, we inspected the evidence presented in relevant scientific studies and the outcomes of other product liability litigation in the same jurisdictions alongside the entity’s assessment of possible outcomes of each ongoing and future trials; and |
| • | Evaluated whether the disclosures made in the financial statements appropriately reflect the facts and critical accounting judgements. |
Table of Contents
| Item 19 | Exhibits |
| * | Previously filed. Certain of the information included within Exhibit 15.2, which is provided pursuant to Rule 12b-23(a)(3) of the Securities Exchange Act of 1934, as amended, is incorporated by reference in the Form 20-F, as specified in the Form 20-F. With the exception of the items and pages so specified, the GSK Annual Report 2022 is not deemed to be filed as part of the Form 20-F. |
Table of Contents
Signature
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 to the Annual Report on Form 20-F on its behalf.
| GSK plc | ||||||
| Date: April 14, 2023 | By: | /s/ Iain Mackay | ||||
| Iain Mackay | ||||||
| Chief Financial Officer | ||||||
Exhibit 12.1
Section 302 Certificate
Form of Certification Required by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
I, Emma Walmsley, certify that:
| 1. | I have reviewed this Amendment No. 1 to the annual report on Form 20-F of GSK plc; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
| Date: April 14, 2023 |
/s/ Emma Walmsley | |||||
| Emma Walmsley | ||||||
| Chief Executive Officer |
Exhibit 12.2
Section 302 Certificate
Form of Certification Required by Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
I, Iain Mackay, certify that:
| 1. | I have reviewed this Amendment No. 1 to the annual report on Form 20-F of GSK plc; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
| Date: April 14, 2023 |
/s/ Iain Mackay | |||||
| Iain Mackay | ||||||
| Chief Financial Officer |
Exhibit 13.1
Section 906 Certificate
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of GSK plc, a public limited company incorporated under English law (the “company”), does hereby certify, to such officer’s knowledge, that:
Amendment No. 1 to the Annual Report on Form 20-F for the year ended December 31, 2022 (the “Report”) of the company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.
| Date: April 14, 2023 | /s/ Emma Walmsley | |||||
| Emma Walmsley | ||||||
| Chief Executive Officer | ||||||
| Date: April 14, 2023 | /s/ Iain Mackay | |||||
| Iain Mackay | ||||||
| Chief Financial Officer | ||||||
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-254756, 333-254756-01 and 333-254756-02 on Form F-3 of GSK plc, GlaxoSmithKline Capital plc, and GlaxoSmithKline Capital Inc. and Registration Statement Nos. 333-88966, 333-100388, 333-162702, and 333-235651 on Form S-8 of GSK plc, of our reports dated 10 March 2023, relating to the financial statements of GSK plc and the effectiveness of GSK plc’s internal control over financial reporting appearing in this Annual Report on Form 20-F/A for the year ended 31 December 2022.
/s/ Deloitte LLP
London, United Kingdom
14 April 2023