reckitt benckiser group plc ‘rb’  
annual report and financial statements 2013
enabling 
healthier lives
the global leader in consumer
health and hygiene strategic report
chairman’s statement 1
results highlights 2
chief executive’s statement 3
operational detail 9
governance  remuneration
board of directors and executive committee 20
report of the directors 21
chairman’s statement on corporate  
governance 24
corporate governance report 26
statement of directors’ responsibilities 33
directors’ remuneration report 34
financial statements
independent auditors’ report to the 
members of reckitt benckiser group plc  47
group income statement 50
group statement of comprehensive income 50
group balance sheet 51
group statement of changes in equity 52
group cash flow statement  53
notes to the financial statements 54
fiveyear summary 85
parent company independent auditors’  
report to the members of reckitt benckiser  
group plc  86
parent company balance sheet 87
notes to the parent company financial  
statements 88
our relationships and  
principal risks 93
shareholder information 104
contents
rb refers to entities in the reckitt benckiser group plc group of companies
‘rb – the global leader in consumer health and hygiene’ global claim based on rb’s definition of combined consumer health 
and hygiene sales data sources consumer health otc nicholas hall condomsdevices acnielsen footcare acnielsen – 
select markets only hygiene rb select categories euromonitor rb annual report 2013 1
strategic report   chairman’s statement
will update shareholders on the review’s 
progress during 2014 
cash and dividend
the strong growth produced strong 
cash flow allowing the company to pay 
down more of its debt the company is 
in strong financial health and your board 
is proposing a final dividend of 77p per 
share this brings the dividend for the 
year to 137p per share an increase of 
2 over 2012 
corporate social responsibility
in addition to being a financial 
contributor to society the company  
is also a contributor to environmental 
and humanitarian needs of society  
the company was proud to announce 
a major new global initiative with save 
the children a longstanding partner to 
address the scourge of child deaths from 
diarrhoea which is highly preventable 
through better health and hygiene 
corporate governance
the detailed corporate governance 
statement and report on pages 24 
to 32 reflects the board’s recognition 
of the importance of our governance 
responsibilities 
the board conducted regular reviews 
of the performance of the business 
its strategy brands human resources 
corporate responsibility and reputation 
and business risks it was decided 
to change the trading name of the 
company to ‘rb’ moving away from  
the harder to say spell and search 
‘reckitt benckiser’ there are no  
changes to legal entity names
board of directors
it was with great regret that i accepted 
in june the resignation due to ill health 
of graham mackay our then senior 
independent director graham sadly 
passed away in december he delivered 
great service to your company over 
his eight years on the board and will 
be missed andré lacroix has been 
appointed senior independent director
on behalf of the board i have 
pleasure in reporting that your 
company delivered strong  
results ahead of targets for  
2013 net revenue excluding  
rb pharmaceuticals grew 7 
operating profit adjusted
1
 excluding 
rb pharmaceuticals grew 7 and 
adjusted
1
 net income grew at 2  
all at constant exchange rates 
the company’s twin strategy is to  
focus on growing the health and 
hygiene brands of its core portfolio and 
to achieve a stronger emerging market 
penetration to better balance its historic 
developed market strength 
at the end of 2013 health and hygiene 
brands represented 72 of the core 
portfolio and the emerging market  
areas represented 43 this progress  
is pleasing but equally so were the  
results in europe and north america 
which achieved growth in every  
quarter of the year our acquisitions  
more fully reported elsewhere in  
this report contributed materially to 
these achievements 
rb pharmaceuticals
after the entry of generic us  
competition to rb pharmaceuticals’ 
suboxone and the stable performance  
of the film alternative your board 
announced a strategic review of this  
part of the company the review will 
recommend the optimal future for  
rb pharmaceuticals and the company 
new purposeinspired strategy 
delivers strong performance
in december we appointed  
nicandro durante as an independent 
nonexecutive director nicandro an 
italianbrazilian and ceo of bat brings 
significant consumer goods industry and 
emerging markets experience also in 
december richard cousins advised me 
that he would not be available to stand 
for reelection to the board i thank 
richard for his contributions to our 
company judith sprieser and kenneth 
hydon will step down as chairs of the 
remuneration and audit committees 
respectively in 2014 they have both 
been extraordinarily effective chairs of 
the committees
your nominations committee is 
actively involved in a project to appoint 
additional nonexecutive directors 
annual general meeting resolutions
the resolutions to be voted on at our 
agm on 7 may 2014 are explained in 
the notice of meeting including the 
new requirement to offer shareholders 
a binding vote on our remuneration 
policy the details of which are set out in 
the directors’ remuneration report on 
pages 34 to 46 we believe this policy 
has served the company well and hope 
shareholders will endorse it 
thanks 
on behalf of the board i thank our 
ceo rakesh kapoor his executive 
management team and our employees 
globally for their commitment to 
delivering strong performance the board 
is often reminded that an enduring 
differentiator of the company is its 
people and their positive performance
minded culture my thanks go also to 
my board colleagues for their continued 
support and guidance 
the board thanks you our shareholders 
for your ongoing confidence in the 
company 
adrian bellamy chairman
1
   adjusted to exclude the impact of exceptional items 2 rb annual report 2013
after dividends acquisitions  
 restructuring
strong cash flow took  
net debt to
£2096m
strategic report   results highlights
2014 targets 
•	 	 net	r evenue	gr owth	of	45	at	 
constant exchange rates excluding  
rb pharmaceuticals including the 
immaterial residual impact of the  
bristolmyers squibb bms collaboration
•	 	 flat	to	moderate	operating	margin
3 
expansion excluding rb pharmaceuticals
mediumterm kpis key 
performance indicators
•	 	 health	and	hygiene	r evenues	to	incr ease	
as a percentage of core
4
 net revenue by 
1 per annum going forward
•	 	 lap ac
2
 and rumea
2
 combined to be 
equal in net revenue size to ena
2
 by end 
of 2015
•	 	 achieve	200	bps	per	annum	of	net	
revenue growth on average above  
our market growth excluding  
rb pharmaceuticals
•	 	 achieve	moderate	operating	margin
3
 
expansion
1   excluding rb pharmaceuticals at constant  
exchange rates
2  latin america north asia south east asia and 
australia and new zealand lapac russia and cis 
middle east north africa turkey and subsaharan 
africa rumea north america central europe 
northern europe southern europe and western 
europe ena
3   adjusted to exclude the impact of exceptional 
items and excluding rb pharmaceuticals
4   core includes health hygiene home and  
portfolio brands
rb delivers another 
strong year in 2013
68 
volume share of the
us market
suboxone film maintained
adjusted net income up 2 
2 constant 
2698p
adjusted 
diluted 
earnings  
per share
these results give us 
confidence that we have 
the right business strategy 
the right organisation the 
right platforms and the right 
culture to deliver sustained 
growth and outperformance
operating 
margins
3
 up
exceeding target
20 
bps 
health  hygiene 
powerbrands
durex mucinex strepsils 
dettol lysol harpic  finish 
led the growth
rumea
2
 lapac
2
strong growth in
emerging market areas
greater speed  
and scale
ena
2
4 
total 
growth 
at constant  
exchange rates
total net revenue
£10bn
total 
growth
1 7  rb annual report 2013 3
strategic report   chief executive’s statement
at the end of the second year of our new strategy it is 
appropriate to reflect on the progress we have made 
the achievements have been many building on the successful 
traditions of the company we are creating something unique 
and powerful we are creating a new force in consumer health 
across the globe rb is building capabilities to provide innovative 
solutions for healthier lives 
global health trends are changing 
profoundly people are living longer 
and are increasingly aware of the 
need to look after themselves as they 
seek to prolong and enjoy their lives 
families are better educated about 
health issues and are increasingly keen 
to take control of their own wellbeing 
the emergent middle class has become 
far more health conscious as the links 
between health and prosperity become 
clearer governments also want citizens 
to take on responsibility for their  
everyday ailments as they strive to 
reduce the economic burden of rising 
health care costs and to focus limited 
resources on more complex diseases
our vision and our purpose are to 
support consumers as they make their 
choices for their own households and 
their own families to put them in 
control and give them the power to  
do what is right for them
creating a new global 
force in consumer health
rakesh kapoor chief executive
powerbrands  
focus on health hygiene and home
powermarkets  
powermarkets prioritised on  
growth potential and where we  
have capabilities to win
organisation  
informed by consumer clusters  
lapac rumea and ena 
margins  
drive margins to fund investment and 
profit growth and convert to cash
our strategy
our vision is a world where people  
are healthier and live better
our purpose is to make a difference by 
giving people innovative solutions for 
healthier lives and happier homes
health hygiene home 4 rb annual report 2013
strategic report   chief executive’s statement
as the global leader in consumer health and 
hygiene rb’s reputation for being ‘the health  
care brand for health care professionals’ hcps  
is growing amongst many online schemes we’re 
piloting an online consumer health care portal 
‘rbforhealth’ in the uk and italy giving hcps 
access to interactive training modules and a 
collection of essential resources 
our business model continues to 
develop to support this strategy we 
remain focused on powermarkets and 
powerbrands where we believe the 
opportunities are greatest our new 
geographic structure has paid dividends 
as we have significantly expanded our 
presence in emerging markets and our 
renewed focus on health and hygiene 
has seen us boost our presence in key 
consumer health segments that we 
believe will deliver benefits to all our 
stakeholders in the future 
we have done this through focused 
investment in our people and financial 
resources and through a series 
of strategic acquisitions that have 
demonstrated our intent to develop 
further in areas where we see the  
most potential
consumers are at the centre of  
our vision
rb owns brands that consumers love 
and trust they know our products 
can make a difference and help 
them live healthier lives but our 
strategy is different from traditional 
pharmaceutical consumer health 
companies our deep expertise as a 
consumercentric company means we 
can continuously provide highly relevant 
products and benefits based on what 
consumers want informed with robust 
science and medical support 
we continue to invest in this strategy 
we have increased our spending on key 
partnerships across the world so we can 
understand better where the emerging 
opportunities and needs lie in whatever 
demographic or geography they exist 
trusted powerbrands for 
self health care
our 19 powerbrands 
good health is the key to happiness
hygiene is the foundation of  
healthy living
home is the centre of family life 
food is run as a standalone 
business
helping uk pharmacists 
help their patients
building trust with health care professionals rb annual report 2013 5
strategic report   chief executive’s statement
acquisitions reinforce  
our position 
strengthening our health platform
in may 2013 we significantly 
strengthened our health platform in 
latin america where historically we 
have had less ontheground ability  
to execute than in other regions  
our collaboration with bristolmyers 
squibb brought into our portfolio a 
number of important overthecounter 
brands that have leading positions 
in key segments such as cold and flu 
and pain relief in the rapidly growing 
markets of brazil and mexico in china 
we acquired the leading traditional sore 
throat brand manyanshuning which 
has already shown strong growth in the 
first year of our ownership beyond this 
it is helping to build a consumer health 
platform in one of the world’s largest 
consumer markets 
vitamins minerals and  
supplements vms
we have also broadened our category 
portfolio with the purchase of schiff 
at the end of 2012 this provided us 
with a meaningful position in the fast
growing area of vitamins minerals and 
supplements the category is worth 
£29bn globally and is growing at an 
annual rate of 45  
as more and more people become 
aware of the potential benefits of 
supplements as part of a holistic 
approach to health and wellbeing 
this category goes from strength to 
strength as an example many people 
want to eat a balanced diet with the 
right nutrients but are unable to do so 
supplementing diet is one way vms 
fulfils an important role
in each of these cases we have used 
our operational expertise to integrate 
the acquisitions rapidly and we are 
confident that each will deliver lasting 
value for shareholders collectively 
these transactions will contribute to 
our strategy of creating a unique global 
health and hygiene focused company 
with broad category coverage across a 
host of fast growing segments including 
analgesics cold and flu gastrointestinal 
maladies and vms they have also 
expanded our geographic capabilities 
ensuring we are better positioned than 
ever to meet our targets
strategic acquisitions  
and partnerships
guilong medicine
strategic acquisition of the traditional 
chinese medicine brand manyanshuning – 
the no1 sore throat remedy in china
bristolmyers squibb
boosting our strength in latin america  
in overthecounter brands
acquiring schiff has given rb a leading 
position in the large and rapidly growing 
vitamins minerals and supplements category 
effectively doubling the value of the global 
health markets we are now in to £60bn
a key brand in this category is megared – 
made from krill oil instead of fish oil this 
gives our consumers the same 
benefits for their heart and 
health but with a much more 
palatable fishfree taste
megared launches into over  
20 new european and asian 
markets in 2014
heart health is key to the 
enjoyment of life
diving into the vast vitamins minerals 
and supplements category 6 rb annual report 2013
strategic report   chief executive’s statement 
focus on the right categories and 
the right geographies
these acquisitions add to our 
considerable progress on the first 
pillar of our strategy to focus on the 
faster growing higher margin and 
better consumer loyalty of health and 
hygiene brands our kpi which we 
had already accelerated to 2015 to 
achieve 72 of our core net revenue 
from these two categories has been 
achieved two years early 
the second pillar of our strategy is a 
particular focus on 16 powermarkets 
where the opportunity to grow and 
outperform is greatest such as in brazil 
russia india and china this is why we 
created two emerging market areas 
our third pillar lapac and rumea 
to enhance our focus capabilities and 
brand penetration programme our kpi 
is to make these emerging market areas  
50 of our core net revenue by 2015 
we also made the unconventional 
but breakthrough step of combining 
europe and north america as one 
organisation this has enabled ena to 
become a leaner faster organisation 
with the ability to enhance the scale of 
our innovations across both sides of the 
atlantic and deliver very good growth
our final pillar of margin 
improvement remains key and is 
a focus for every business in every 
market every day it is what generates 
the fuel to invest in our brands and 
ultimately to generate excellent returns 
for our shareholders
expanding powermarkets 
lapac
north asia  south east asia   
australia  new zealand  latin america
rumea
russia  cis  middle east north africa  
 turkey  subsaharan africa
ena
north america  central europe   
northern europe  southern europe  
western europe
areas
gil baek jiyoung  
shin seunghoon  kang ta  
judges on the voice of korea 
an innovative collaboration saw strepsils sponsoring 
the popular national talent tv show the voice of 
korea the strepsils brand was embedded into all 
aspects of the show contestants even used strepsils 
during the shows to keep their throats feeling great 
this helped strepsils’ distribution into 16 cities 14000 
pharmacies and 30000 points of sale sales doubled
boosting strepsils sales in 
south korea rb annual report 2013 7
strategic report   chief executive’s statement
gaining a million views in just two weeks 
and becoming australia’s no1 video ever 
facebook ‘likes’ increased 4000  
there was a 351 return on advertising 
revenue and a silver lion advertising award 
at cannes
strategic review of rb 
pharmaceuticals 
as part of our constant commitment  
to drive shareholder value during 
the year we announced a strategic 
review of rb pharmaceuticals we have 
consistently said that once generic 
competition to rb pharmaceuticals’ 
suboxone had been on the market in 
the us for a number of months we 
would examine all the options for what 
is a very valuable asset that review 
is ongoing and we will update our 
shareholders during 2014
our responsibility
our purpose to provide innovative 
solutions for healthier lives and happier 
homes inspires our business strategy 
but it is a determination that is also at 
the heart of our social purpose we 
take the same innovative approach 
to our responsibility and sustainability 
initiatives as we do to our business  
and brands
environmental performance
we take our environmental 
performance equally seriously and 
are targeting a onethird reduction 
in carbon emissions across the entire 
lifecycle of our products by 2020 in the 
past five years we have already reduced 
carbon emissions per dose of product 
by 25 leading to our recognition 
as a leader in this area by the carbon 
disclosure project 
we have adopted a similar approach 
to our use of water which is becoming 
an increasingly scarce resource in many 
parts of the world yet is critical to our 
business and to consumers
innovating to outperform
1   core includes health hygiene home and 
portfolio brands
nick  dani australia 
‘fundawear’ testers on 
viral youtube video
geographic kpi
43

achieved
core
1
 company 
net revenues from 
lapac and rumea 
to be equal to ena 
by end of 2015
category kpi
72

achieved
core
1
 company 
net revenues from 
health and hygiene 
to increase by  
1 per annum
durex is about great and safe sex as the 
global no1 sexual wellbeing brand it is 
reaching new consumers in very innovative 
ways a series of ‘durexperiments’  
included creating ‘fundawear’ – vibrating 
underwear activated by your partner via a 
smart phone app
this innovative idea was launched in 
australia the youtube video went viral 
fun with durexperiments 8 rb annual report 2013
strategic report   chief executive’s statement
this illness is preventable 
through better hygiene 
and health and our 
goal together is to 
radically reduce the 
global death rate  
by 2020 
we have set a onethird target for water 
reduction and are designing innovative 
new products that reduce both the 
volumes of water required for their 
manufacture as well as in their use for 
instance our new dettol touch of foam 
requires far less water than conventional 
hand wash products as it does not 
require water to create a lather in 
addition we have a target to achieve 
onethird of our net revenue from more 
sustainable products by 2020
healthier lives
we have launched a groundbreaking 
initiative with save the children to 
tackle the causes of diarrhoea which 
kills 800000 children under five every 
year – that’s more than a child a minute 
working with governmental ngo  
and business partners we aim to 
remove it as the no2 cause of death  
in young children 
our people
the success of these initiatives and  
of the business as a whole lies with 
our employees rb people are different 
they have unmatched passion and 
commitment and live for results once 
again i would like to thank them for all 
their efforts
healthier business 
healthier world
e v e r y m i n u t e
save a child
help stop deaths 
from diarrhoea
in partnership with
making a difference in 
ethiopia bangladesh and 
many more countries
it will shock many people to learn that 
diarrhoea is the second biggest killer 
worldwide of children under five claiming 
around 800000 lives per year that’s 90 
young lives every hour rb is on a mission 
with save the children to change this
taking a stand against preventable disease  
– save a child every minute 
there is little doubt that 2014 will be another challenging 
year our actions in 2013 mean that we believe we can 
still look forward to another period of outperformance 
rakesh kapoor chief executive
photo credits  above save the children 
below lucia zoro  save the children rb annual report 2013 9
strategic report   operational detail
mucinex fast max in the wider cold and  
flu category in 20112012 and then 
subsequently into the sinus category in 2013 
and for 2014 we have now announced our 
entry into the allergy category with our  
new mucinex fast max allergy tablets a 
nondrowsy antihistamine with 24hour relief 
from indoor and outdoor allergies
•	 geographic roll outs our global consumer 
health infrastructure and gotomarket 
capability will facilitate further geographic 
expansion of our existing brands we have 
already had significant success with gaviscon 
a longstanding brand in our portfolio we 
have also recently announced the launch of 
our newly acquired megared brand in over 
20 countries during 2014
hygiene – 43 of core net revenue 
good hygiene is the foundation of healthy 
living and we believe it is important to educate 
consumers about good hygienic practices our 
powerbrands are positioned with this in mind 
and we have a number of large and market
leading powerbrands in hygiene
•	 	 no1	worldwide	in	antiseptic	liquids	with	the	
powerbrand dettol
•	 	 no1	worldwide	in	disinfectant	cleaners	
products which both clean and disinfect 
surfaces killing 999 of germs with the 
powerbrand lysol in north america and the 
surface care products in the dettol range 
outside north america
•	 	 no1	worldwide	in	automatic	dishwashing	
products used in automatic dishwashers 
with the powerbrand finish
•	 	 no1	worldwide	in	the	overall	surface	car e	
category due to leading positions across 
disinfectant cleaners nondisinfectant 
multipurpose cleaners lavatory care 
speciality cleaners and polisheswaxes
•	 	 no1	worldwide	in	depilatories	with	the	
powerbrand veet
•	 	 no2	worldwide	in	lavatory	car e	with	l ysol	in	
north america and the powerbrand harpic 
across europe and developing markets
•	 	 no1	worldwide	in	upper	gastr ointestinal	
products with the powerbrand gaviscon
•	 	 leading	position	in	analgesics	in	eur ope	and	
australia with the powerbrand nurofen
•	 	 leading	positions	in	footcar e	in	many	
markets outside north america and latin 
america with the powerbrand scholl
attractive features of consumer health
attractive demographics such as an emerging 
middle class keen to manage their health  
and an ageing population with greater needs 
governments keen to encourage consumers  
to selfmedicate on symptom management  
as more complex diseases make ever greater 
calls on their funds health brands have higher 
consumer trust and loyalty brands have 
superior gross margins and finally there is  
a fragmented market place dominated by 
prescription pharmaceutical companies with 
typically less focus on and expertise in 
consumer marketing 
rb positioning and ability to win
our consumercentric and innovationled 
mindset puts the consumers’ needs first  
we have built a global consumer health 
infrastructure and are present in all of the major 
consumer health categories the combination 
of our consumer focused and innovationled 
mindset our rd and regulatory capabilities 
and our global infrastructure positions us well 
for continued growth and outperformance 
growth drivers
growth will be driven by three core 
components
•	 sciencebased innovations our rd 
department sits firmly alongside our category 
organisation and is core to the development 
of scientifically driven and consumerfocused 
innovation we don’t discover new molecules 
rather we mine the wealth of existing science 
and use our technical expertise and capability 
to deliver products using that science which 
consumers find relevant convenient know 
and trust for example when you have a 
headache your number one priority is to get 
rid of pain quickly so we developed nurofen 
express a patented combination of ibuprofen 
and sodium which speeds up the release of 
the active ingredient and so targets pain 
twice as quickly as an ibuprofenonly product
•	 brand extensions trust is important within 
consumer health and we build on the trust 
and loyalty we have created within our 
brands to create opportunities in adjacent 
segments take for example mucinex our 
marketleading cough and congestion 
product in the us we have built on the 
equity we created in this brand to launch 
our strategy for growth and 
outperformance
our vision is a world where people are healthier 
and live better our purpose is to make a 
difference by giving people innovative solutions 
for healthier lives and happier homes
our strategy for growth and outperformance  
to deliver our vision centres around four  
key pillars
1  powerbrands – a disproportionate focus on 
our 19 powerbrands in the health hygiene 
and home categories
2  powermarkets – a disproportionate  
focus on our 16 powermarkets a  
significant number of which are in emerging 
markets and which have higher absolute 
growth potential
3  organisation – we have organised our 
business around seven major consumer 
clusters each of which has powermarkets 
within it
4  margins – we undertake continuous 
initiatives aimed at freeing resource to invest 
in the business and driving moderate margin 
expansion over the mediumterm
powerbrands – strategic pillar 1
our powerbrands are carefully selected for their 
high growth and margin potential and we 
invest disproportionately behind these brands 
to drive superior performance we have 19 
powerbrands all bar one of which are classified 
into our three core categories of health 
hygiene and home
health – 29 of core net revenue 
consumer health has a number of attractive 
features as a category and we have built the 
skill set to win in these categories 
 
•	 	 no1	worldwide	in	condoms	for	both	 
safe and more pleasurable sex with the 
powerbrand durex
•	 	 no1	worldwide	in	cough	with	the	
powerbrand mucinex
•	 	 no1	worldwide	in	medicated	sor e	thr oat	
products with the powerbrand strepsils
a detailed look at our strategy
good health is the key to happiness
hygiene is the foundation of  
healthy living 10 rb annual report 2013
strategic report   operational detail
lapac north asia south east asia  
australia  new zealand latin america
rumea russia  cis middle east north africa 
 turkey subsaharan africa
ena north america central europe  
northern europe southern europe western 
europe
margins – strategic pillar 4
the fourth pillar of our strategy is margin 
increasing gross margin is a key priority it is at 
the forefront of our ‘virtuous’ earnings model 
gross margin is an indicator of our ability to 
drive topline growth over time with the key 
drivers being the following
•	 improving the mix we focus on categories 
where we can add real value for consumers 
and earn a corresponding significant and 
sustainable margin 
•	 	 cost	optimisation	pr ogrammes this is a 
continual process in our business and not a 
stopstart effort now called ‘project fuel’ 
we are continually looking for greater 
efficiencies and savings within our supply 
chain we also look at our products with a 
relentless focus on doing things at a cheaper 
cost and enhancing quality and the 
consumer experience
•	 	 pricing we look to take price increases 
where appropriate
gross margin increased by 150 bps to 594  
in 2013 due to a combination of the above 
factors and positive mix arising from the 
discontinuation of our private label business 
during 2012 
gross margin expansion to fund more 
investment in our brands
our gross margin growth funds investment 
behind our brands which we have defined as 
bei brand equity investment bei encompasses 
tv and print social and digital media and 
consumer and medical marketing it is a key 
metric for us and represents a combination of 
category and penetration building activities as 
well as consumer and doctor awareness and 
education programmes
in 2013 bei was 130 an increase of  
30 bps over the prior year and helped drive 
total net revenue growth of 7 constant  
ex rb pharmaceuticals a strong 
outperformance versus market growth  
 
particularly tough stains the tip exchange has 
proved a great success and we have already 
seen encouraging penetration improvements in 
vanish during the year 
mediumterm kpi 
our prime portfolio focus is on health and 
hygiene and we had a mediumterm kpi that 
72 of our core revenue will come from health 
and hygiene brands by 2015 at the end of 
2013 we actually achieved this kpi due to our 
strong organic growth supplemented by 
acquisitions we are now targeting to increase 
this 	 by 	 1 	 per 	 annum 	 going 	 forwar d	
portfolio brands
we have a number of local brands which do 
not fit with our health hygiene and home 
focus these are managed with a focus on local 
scale and cash generation
powermarkets and organisation  
– strategic pillars 2  3
the second pillar of our strategy is ‘a focus on 
powermarkets’ our brands are marketed and 
sold in nearly 200 markets across the world 
but we know that the vast majority of our 
global growth will come from a few key areas 
we have identified 16 powermarkets in both 
developed and emerging countries these are 
markets where we see exceptional potential for 
growth and where we have an ability to win
the third pillar of our strategy is organisation 
where we seek a balance of emerging markets 
and developed markets we take a consumer
centric view of the world and see seven major 
consumer clusters around which we organise 
ourselves each cluster has one or more 
powermarkets within it consumers within 
these clusters have significant similarities in 
how they use choose and buy our categories 
of consumer goods and so it makes sense to 
group them together 
the first three of these consumer clusters are 
the consumers of latin america north asia  
and south asia which together with australia 
and new zealand we group together into one 
organisational structure named lapac the 
next three clusters are russia and cis middle 
east north africa and turkey and subsaharan 
africa and we group these three together into 
one organisational structure called rumea the 
seventh consumer cluster comprises europe and 
north america ena across these two markets 
there are many similarities in behaviours in 
brand development and in how the retail trade 
is organised hence ena forms the third 
geographic organisational structure
mediumterm kpi 
our mediumterm goal is to grow the emerging 
market areas of lapac and rumea faster so 
that by 2015 they together represent 50 of 
our core revenues equal in size to ena at the 
end of 2013 they represented 43 in 2013 
our progress was impacted by adverse currency 
movements in a number of emerging markets 
by weaker performance in rumea and by our 
schiff acquisition within ena
 
•	 	 no2	worldwide	in	pest	contr ol	with	 
the powerbrand mortein the group’s 
international brand supported by local brand 
franchises like dcon in north america
•	 	 no3	worldwide	in	acne	tr eatment	with	the	
powerbrand clearasil
the hygiene category is spearheaded by our 
dettollysol powerbrands ‘trusted champions 
of health everyday’ we undertake many 
campaigns to help educate consumers on good 
hygienic practices in emerging markets such as 
‘new mums’ hospital visit initiatives we visit 
new mums in hospital and educate them about 
the importance of healthy habits around their 
home when they take their new child home for 
the first time we also visit schools as part of 
our ‘healthy hands’ campaign and teach 
children the importance of washing their 
hands and how to do it properly 
these are just a few examples of where we 
believe we have a significant opportunity to 
grow awareness and penetration of our brands 
through consumer targeted education coupled 
with the right innovations for healthy living
home – 22 of core net revenue 
home will always be the centre of a family’s 
world and our marketleading home care 
powerbrands are positioned to create  
happier homes
•	 	 no1	worldwide	in	fabric	tr eatment	pr oducts	
to remove stains from clothes carpets and 
upholstery with the powerbrand vanish 
around the globe and resolvespray ‘n wash 
in north america
•	 	 no2	worldwide	in	air	car e	with	the	
powerbrand air wick
•	 	 no1	worldwide	in	water	softeners	 
products to prevent limescale buildup on 
washing machines and laundry with the 
powerbrand calgon
•	 	 no2	worldwide	in	garment	car e	laundry	
cleaning products for delicate garments with 
the powerbrand woolite
we have a proven track record of bringing 
innovation that consumers love a good 
example of our innovative approach to this 
category is our new vanish ‘superbar’ it has 
been designed specifically for emerging 
markets and has made vanish more affordable 
to consumers where price remains a barrier and 
where people don’t have washing machines for 
their clothes we also set up the online ‘vanish 
tip exchange’ during the year this was a 
business development initiative aimed at 
creating an online community for consumers  
to discuss how they use vanish to get rid of 
home is the centre of family life  rb annual report 2013 11
strategic report   operational detail
our culture is underpinned by a highly  
geared performancedriven remuneration 
structure applied universally to our top400 
global leaders 
a robust supply of talented staff for the  
group is attributable to the group’s 
commitment to provide challenging global 
careers for confident high achievers supported 
by a highly leveraged performancecontingent 
compensation policy our executive leadership 
team has extensive experience in the fmcg 
and health care sectors the members of our 
executive committee have been with us for  
an average of 12 years 
the group believes its ability to attract and 
retain the excellent management needed  
relies on continuing to offer diverse global 
experiences coupled with performancedriven 
remuneration the group trains and develops 
its middle and senior management pipeline 
through formal training programmes focusing 
on three areas – leadership skills functional 
skills and general skills – and through a 
deliberate policy of training on the job  
the group has a number of formal training 
modules for top400 
during 2013 the group ran over 46 courses 
across these modules providing approximately 
450 trainings of the top400 management is 
international and is trained through rotation  
in international postings both in countries and 
in the group’s central functions succession 
planning is a critical management discipline  
and is reviewed annually at least by the  
full board and quarterly at least by the 
executive committee
the group closely monitors and tracks its 
top400 this is the core management team of 
the business and is a diverse group consisting 
of over 55 nationalities over 62 of the 
top400 is working in a country that is not their 
original domicile consistent with the group’s 
policy to develop a multinational management 
team turnover within this top400 group in 
2013 was 11 of which 7 was involuntary 
which the group considers excellent retention 
balanced with the need to refresh the team 
with new talent 2013 saw 46 promotions  
63 moves and 29 external recruits the group 
ended the year with a low level of vacancies 
within the top400 of 11 or around 3 of the 
measured group
food
the group owns a largely north american food 
business the principal brands of which are the 
powerbrand french’s mustard the no1 
mustard and frank’s red hot sauce the no1 
hot sauce and wing sauce in north america 
mergers and acquisitions ma
we believe opportunities will continue to  
arise to augment our organic growth via ma 
over time the consumer health segment is a 
fragmented market and rb is well positioned to 
take advantage of consolidation opportunities 
which may arise we require a number of 
criteria to be fulfilled before considering  
any inorganic opportunities they must be 
strategically compelling able to perform better 
under the ownership of rb fit within a part of 
the business where we have the managerial 
depth to integrate them quickly and effectively 
and must be value accretive
generating shareholder value
a faster growing pl and market 
outperformance
our core business under the four pillars of our 
strategy is aimed at positioning rb in faster 
growing markets and faster growing and 
higher margin categories with relentless focus 
on gross margin and investing virtuously we 
seek to generate shareholder value through 
sustainable top line growth and moderate 
margin expansion in the mediumterm 
strong focus on net working capital and 
cash conversion
we continue to target operational management 
on net working capital and in 2013 achieved 
110 cash conversion of our net income by 
emphasising working capital management  
we are able to convert a high proportion of 
operating profit into cash further our tight 
control over net capital expenditure purchases 
less disposals of property plant and equipment 
and intangible assets means that we are able 
to convert a high proportion of our net cash 
generated from operating activities into free 
cash flow ie net cash generated from 
operating activities less net capital expenditure 
sustainable returns to shareholders
our dividend payout ratio has been maintained 
at 50 of adjusted net income and this year’s 
dividend of 137p represents a 2 increase  
over the prior year we have also undertaken  
a modest share buy back programme of  
around £280m which broadly equals the  
level of new share issuance for employee 
incentive programmes 
our resources
the principal resource is management and 
employees the other major resources required 
by the business are an adequate supply of the 
raw and packaging materials consumed by the 
group’s products and the necessary funds for 
developing new products and reinvestment in 
advertising and promoting those brands 
talented global employees
our strategy is delivered by highly talented  
and driven people from around the world 
diverse backgrounds and experiences foster a  
culture of entrepreneurism and achievement 
brand equity investment 
 of net revenue ex rb pharmaceuticals
2012 2011 2010 2009 2008
declared dividend per share pence
90 60 30 0 150 120
0
3
6
9
12
15
adjusted to exclude the impact of exceptional items and 
  tax effects thereon
1340
1250
0
3
6
9
12
15
2013 2012 2011
9
6
3
0
15
12 127
120
130
our gross margin growth also funds our 
investment in the capabilities we need in  
order to continuously bring new innovation  
to our consumers we have strengthened our 
consumer health capabilities by increasing our 
investment behind clinical medical regulatory 
and compliance we have also increased 
investment in our emerging market areas of 
rumea and lapac as we implement our 
strategy of further resource allocation to  
these markets 
we have invested more than £200m 
incrementally over the past two years as we 
prioritise the longterm sustainable growth of 
our brands
aiming for moderate operating margin 
expansion over the mediumterm
the combination of our focus on gross margin 
expansion and relentless cost containment 
funds both investment in our business and 
moderate operating margin expansion over the 
mediumterm
in 2013 we increased adjusted margins by  
20 bps ex rb pharmaceuticals ahead of our 
ingoing target
noncore businesses
rb pharmaceuticals 
rb pharmaceuticals is a pioneer in the field of 
innovative prescription treatments for chronic 
diseases of addiction it is responsible for the 
development of the group’s subutex and 
suboxone prescription drug business both 
products are based on buprenorphine for 
treatment of opiate dependence in the us 
suboxone lost the exclusivity afforded by its 
orphan drug status on 8 october 2009  
on 31 august 2010 the group announced 
that it had received approval from the us food 
and drug administration for its application to 
manufacture and market suboxone sublingual 
film suboxone sublingual film has been 
developed through an exclusive agreement 
with monosol rx utilising its proprietary 
pharmfilm® technology to deliver suboxone  
in a fastdissolving sublingual film 
in october 2013 we announced our decision  
to undertake a strategic review of this business 
this review is underway and we will update our 
shareholders during the course of 2014
medical journals are endorsing the 
science behind gaviscon proving  
how it resolves the pain of the acid 
pocket caused after eating 
food rb health professionals 
have been spreading the  
news at leading gastro
intestinal symposia from 
shanghai to berlin
gaviscon – it’s about 
the science 12 rb annual report 2013
strategic report   operational detail
our industry market and 
competitive environment
the health hygiene and home care industry  
is generally characterised by steady growth  
in demand with some variation due to 
macroeconomic factors some emerging 
markets exhibit more volatile demand in 
reaction to macroeconomic factors the 
principal drivers of market growth in all markets 
are the rate of household formation growth in 
the level of disposable income and demand for 
new products that offer improved performance 
or greater convenience
the industry is intensely competitive the 
group’s competitors differ in various segments 
of the industry the group competes with 
numerous wellestablished local regional 
national and international companies some  
of which are very large and have significant 
resources with which to establish and defend 
their products market shares and brands 
principal multinational competitors include 
pharmaceutical companies such as bayer 
glaxosmithkline johnson  johnson and 
novartis and fmcg companies like clorox 
colgatepalmolive henkel procter  gamble 
sc johnson and unilever there are also a 
number of strong local industry companies
rb competes in strongly branded segments  
by focusing on its leading positions in higher 
growth categories it is typically the market 
leader or a close follower a position obtained 
through its ability to introduce new products 
whether improved or newly developed 
supported by a rising and substantial level of 
marketing and media investment a lot of 
competition in the industry focuses on 
competing claims for product performance  
for this reason failure to introduce new 
products and gain acceptance may significantly 
impact the group’s operating results the 
group must also defend itself against 
challenges to its leadership positions in 
markets this requires significant marketing 
expenditure and promotional activity
the group’s products also compete with private 
label products sold by major retail companies 
the group does this by focusing on delivering 
innovative new products with real consumer 
benefits which private label typically does  
not do consistent marketing investment 
communicates the benefits of the group’s 
brands directly to consumers
technological change and product 
improvement can be a key determinant of the 
group’s success rb’s success in introducing 
new and improved products stems from its 
heavy focus on developing a pipeline of 
product innovation the group maintains a 
large category development organisation 
including market and consumer research rd 
and regulatory to fuel the innovation pipeline 
and share category success factors and 
learnings the group invested £199m in rd in 
2013 2012 £171m rd is a key contributor 
to innovative new products but the group 
does not believe that rd spend is the 
dominant performance indicator for innovation 
generation and success understanding of and 
insights into consumer behaviour and needs 
and building its brands is a significant 
competitive advantage
supply constraints do exist in the group’s 
supply chain from time to time these normally 
arise due to unexpected additional demand for 
products or the time delay involved in stepping 
up production of new items to the levels 
required internationally the group’s supply 
chain is deliberately relatively well spread in 
terms of geography and technology such that 
the reliance on any one facility is reduced 
however there are a number of facilities that 
remain critical to the group’s supply chain 
where major interruption to normal working 
could involve disruption to supply the group’s 
suppliers are similarly deliberately well spread  
in terms of geography and supplied items but 
there are nonetheless some risks to continuity 
of supply arising from some specialised 
suppliers both of raw materials and of third 
party manufactured items
our structure
the group structures its business through a 
matrix of a centralised category development 
global sales supply and support functions 
finance human resources and information 
services combined with three area 
organisations ena lapac and rumea plus 
food and rb pharmaceuticals the central 
category development function is responsible 
for powerbrand strategies brand equity 
programmes and best practices and new 
product development including research  
and development rd and consumer and 
market research for implementation by the 
area organisations
our rd facilities are located at 28 different 
sites many of which are situated in or 
alongside our production facilities our main 
rd facilities are located in hull england 
montvale new jersey us dongguan china 
salt lake city us ludwigshafen germany 
gurgaon india mira italy and bangkok 
thailand
technological change and product 
improvement is a key determinant of our 
success we believe that our success in 
introducing new and improved products comes 
from our focus on developing a pipeline of 
product innovation through consumerfocused 
approaches we maintain a large category 
development organisation including market 
and consumer research rd and marketing 
and sales best practice to fuel the innovation 
pipeline and share category success factors  
and learning we undertake rd to support 
the development and commercialisation of  
new and improved products in all of our 
product categories and for increased 
manufacturing efficiencies
the global supply function is responsible for all 
procurement raw and packaging materials and 
services production and logistics globally and 
is directly responsible for the operation of the 
group’s 48 production facilities worldwide 
facilities are located in europe 15 facilities and 
north america six asia 18 latin america 
five and africa middle east fourthere are a 
small number of facilities in higher risk labour 
and social environments
the percentages of female members in the 
group’s director senior manager and all 
employee populations are 10 14 and  
41 respectively
the group has designated the members of  
its top40 population as rb’s ‘senior managers’ 
for the purposes of the gender split disclosure 
required by s414c of companies act 2006
the total number of employees to which the 
split relates is 24514 this figure is different 
from the total employee numbers reported  
as it excludes seasonal labour which varies 
significantly during the year and for which 
gender identifiers are not recorded
there is a comprehensive set of policies 
governing employment and employees to 
ensure that the group remains an attractive 
employer the group is committed to the 
principle of equal opportunity in employment 
no applicant or employee receives less 
favourable treatment on the grounds of 
nationality age gender religion or disability 
it is essential to the continued improvement in 
efficiency and productivity that each employee 
understands the group’s strategies policies and 
procedures open and regular communication 
with employees at all levels is an essential  
part of the management process the board 
encourages employees to become shareholders 
and participate in the employee share 
ownership schemes
the group relies on its brands brand names 
and intellectual property the group’s major 
brand names are protected by internationally 
registered trademarks the group also 
maintains patents or other protection for its 
significant product formulations designs and 
processing methods the group aggressively 
monitors these protections and pursues any 
apparent infringements
our supply chain
the group considers that its primary raw 
materials such as bulk chemicals including a 
number of petrochemicals plastics pulp metal 
cans etc are generally in adequate global 
supply the cost of these items fluctuates from 
time to time but not at levels that seriously 
impinge on the ability of the group to supply 
its products or generate profit the group is 
profitable and cash generative the group 
believes that its ability to reinvest in supporting 
durex can reach people and with mtv 
it reached 900 million people across 
36 countries through the internet and 
live music with its someonelikeme 
campaign to promote 
great sex safe from 
transmission of hiv  
and other diseases 
durex  mtv  
someonelikeme rb annual report 2013 13
strategic report   operational detail
performances scholl strepsils and nurofen in 
particular performed well behind innovations 
such as the new scholl express pedi for hard 
skin and nurofen for children 
north america delivered another strong 
performance driven by mucinex brand 
extensions improved instore execution  
and targeted digital and traditional media 
campaigns lysol also produced an excellent 
result behind innovations such as ‘power and 
free’ and our recently launched ‘healthing’ 
campaign to strengthen our core equity of 
germ protection we successfully integrated 
schiff in the us over achievement of synergies 
allowed for increased reinvestment behind  
the brands to drive penetration distribution 
improved instore activities and shelf presence 
the combination of europe and north america 
under one organisation is bringing greater 
speed and scale to our innovations such as the 
launch of megared in europe just one year 
after acquisition 
adjusted operating profit was £1321m an 
incr ease	of	12	at	constant	the	adjusted	
operating	margin	incr eased	160	bps
lapac 2013 total net revenue increased to 
£2511m	with	likefor like	gr owth	of	10	
china experienced strong growth as we 
executed our ‘power city’ roll out plans and 
increased distribution on a category basis 
durex had a strong performance driven by 
innovation and targeted digital and social 
media campaigns in hygiene dettol grew 
strongly behind innovations in antibacterial 
soaps shower gels and antiseptics and our 
new dettol kitchen gel underpinned by our 
‘healthing’ campaign for new mums and kids 
in home vanish had a strong year as we 
refocused on winning penetration through  
our successful online ‘vanish tip exchange’ 
programme in a number of countries 
adjusted	operating	pr ofit	incr eased	12	 
to £495m adjusted operating margin was  
30 bps lower at 197 the margin was 
reduced due to the amortisation of the bms 
collaboration agreement which commenced  
in may 2013 
rumea 2013 net revenue was £1356m with 
likefor like	gr owth	of	5	gr owth	has	been	
impacted by socioeconomic issues in parts of 
the area we are also experiencing operational 
issues in turkey and south africa a number of 
corrective actions have been put in place and 
are showing modest early results 
however a further slowing of market 
conditions in russia impacted growth in q4 
which	was	3	on	a	likefor like	basis	in	 
spite of the slowing environment nurofen 
experienced strong growth in q4 as we have 
now lapped the upscheduling in russia in 
hygiene veet dettol and mortein had a good 
quarter to complete a year of strong growth 
adjusted operating profit declined by 2 to 
£284m a 120 bps decline in the adjusted 
operating margin to 209 gross margin 
enhancement from improved mix and pricing 
was more than offset by increased investment 
in bei and capabilities to support future growth 
adverse transactional fx and employeerelated 
to total growth with our acquisitions of schiff 
and guilong and our collaboration with bms  
in latin america latam all performing 
strongly and ahead of ingoing expectations  
rb pharmaceuticals net revenue declined by 
8 at constant rates due to the loss of our 
higher margin tablet sales in the us following 
our voluntary withdrawal of suboxone tablets 
however market share of suboxone film in the 
us was sustained at around 68 despite the 
launch of generic tablets in march
gr oss	margin	incr eased	by	150	bps	to	594	
this was due to a combination of improved 
mix modest price increases cost optimisation 
programmes ‘project fuel’ and the non
recurring impact of our withdrawal from the 
private label business these improvements 
were not as strong in the second half which 
also saw adverse currency movements and a 
stronger comparative 
we raised investment behind our brands as 
defined	by	our	bei	metric	by	30	bps	to	
130 of net revenue ex rb pharmaceuticals 
equating to an incremental £100m investment 
over the prior year at constant rates the 
increase in brand equity investment is focused 
on powerbrands powermarkets and new 
initiatives as well as our newly acquired brands 
we also increased investment behind 
capabilities important to our future growth – in 
particular in the areas of consumer health and 
emerging markets
operating profit as reported was £2345m 
4 versus 2012 4 constant reflecting the 
impact of an exceptional pretax charge of 
£271m 2012 £135m details of the 
exceptional charge are set out in note 3 and 
relate to a provision for historic regulatory 
issues principally competition law restructuring 
costs in relation to the new organisation and 
acquisition and integration costs on an 
adjusted basis operating profit was ahead 
2	1	constant	to	£2616m	the	adjusted	
operating margin decreased by 90 bps to 
260 excluding rb pharmaceuticals the 
adjusted operating margin increased by  
20	bps	to	236	
net finance expense was £31m 2012 £34m 
the tax rate was 25 after deducting  
the exceptional charge and 24 for  
adjusted profit 
net income as reported was £1739m a 
decrease of 5 5 constant versus 2012 
on	an	adjusted	basis	net	income	r ose	2	
2	constant	diluted	ear nings	per	shar e	of	
2385p was 4 lower on a reported basis on 
an	adjusted	basis	the	gr owth	was	2	 
to 2698p 
segmental performance at constant 
exchange rates
the three geographical areas are responsible  
for local execution of marketing and sales 
programmes
ena total net revenue was £5074m with 
likefor like	gr owth	of	3	and	total	gr owth	 
of	4	2013	was	a	str ong	year	for	ena	with	
growth returning to most parts of europe with 
the exception of southern europe all of our 
consumer health powerbrands delivered strong 
ability to prioritise and focus effort and speed 
of implementation and reaction are also critical
international operations and 
regulatory position
the health and hygiene industries are heavily 
regulated by inter alia the european union 
eu and individual country governments 
around the world the home care industry has 
regulation but to a lesser extent ingredients 
manufacturing standards labour standards 
product safety marketing and advertising 
claims are all subject to detailed and  
developing regulation
the group has a comprehensive set of policies 
and procedures designed to govern its business 
methods and practices and protect its 
reputation these cover inter alia a 
comprehensive code of conduct an 
environment policy a global manufacturing 
standard a product safety policy including 
compliance with regulatory and product  
quality requirements internal controls on 
environmental social and governance esg 
matters and reputational risk are further 
outlined in pages 15 to 19 of this report
we take compliance extremely seriously and 
have committed resource and management 
attention to these matters additionally the 
group maintains and continues to improve  
a robust compliance training programme 
ensuring that all senior managers sign an 
annual disclosure and executive management 
sign additionally a reporting document 
certifying compliance with the group’s code  
of conduct
our performance in 2013
the results include the business of schiff from 
14 december 2012 guilong from 8 january 
2013 and bms from 8 may 2013 the dates of 
acquisitionstart of the collaboration where 
appropriate the term ‘likeforlike’ describes 
the performance of the business on a 
comparable basis excluding the impact of 
acquisitions disposals discontinued operations 
and translational foreign exchange movements 
where appropriate the term ‘base business’ 
includes ena lapac rumea and food base 
business excludes rb pharmaceuticals where 
appropriate the term ‘core’ includes health 
hygiene home and portfolio brands and 
excludes rb pharmaceuticals and food where 
appropriate the term ‘adjusted’ excludes the 
impact of exceptional items
total net revenue was £10043m an increase 
of	7	at	constant	exchange	rates	excluding	
rb	pharmaceuticals	or	5	likefor like	ex	 
rb pharmaceuticals our likeforlike growth 
was health and hygiene led as we continue  
to focus on and invest disproportionately in 
these categories delivering sciencebased 
innovations brand extensions and geographic 
roll outs mucinex durex dettol and lysol 
performed particularly well in 2013 from a 
geographic perspective over twothirds of the 
contribution to likeforlike growth came from 
our emerging market areas of lapac and 
rumea our developed market area of ena 
deliver ed	likefor like	gr owth	of	3	a	very	
strong performance in challenging market 
conditions	the	impact	of	net	ma	added	2	 14 rb annual report 2013
strategic report   operational detail
emerging market areas driven by the continued 
success of lysoldettol hand wash foam in the 
us germany korea and china
harpic continued its strong momentum behind 
penetration programmes and the launch of our 
allin1 line extension in india
home
net revenue increased to £1974m a likefor
like	gr owth	rate	of	2	v anish	had	a	very	
strong final quarter as we refocused the 
strategy on penetration underpinned by the 
launch of our successful online ‘vanish tip 
exchange’ campaign in europe and a number 
of our emerging market countries 
portfolio
net revenue decreased to £499m with a 
likeforlike decline of 12 this was due 
principally to actions taken in the european 
footwear business and continued weakness  
in laundry detergents and fabric softeners in 
southern europe 
financial review
basis of preparation the financial 
information is prepared in accordance with 
ifrss as endorsed by the eu and ifrss as issued 
by the international accounting standards 
board with applicable parts of the 2006 
companies act and with the accounting 
policies set out in note 1 on pages 54 to 57
constant exchange movements in exchange 
rates relative to sterling affect actual results as 
reported the constant exchange rate basis 
adjusts the comparative to exclude such 
movements to show the underlying growth  
of the group
net revenue net revenue was £10043m 
2012	£9567m	an	incr ease	of	5
net finance expense net finance expense 
was £31m 2012 £34m 
tax the effective tax rate was 25 2012 
24 this increase was primarily due to the 
nondeductability of the exceptional items  
the adjusted tax rate was 24
net working capital net working capital 
inventories trade and other receivables and 
trade and other payables was minus £863m 
2012 minus £700m 
cash flow cash generated from operations 
was £2756m 2012 £2423m and net cash 
generated from operating activities was 
£2121m 2012 £1888m net interest paid 
was £24m 2012 £7m and tax payments were 
£611m 2012 £528m capital expenditure 
was higher than the prior year at £225m 2012 
£177m acquisition of businesses of £418m 
related to the acquisition of guilong and 
collaboration agreement with bms 
net debt at the end of the year net debt  
was £2096m 2012 £2426m this reflected 
strong free cash flow generation offset by the 
payment of two dividends totalling £992m  
and the acquisition of businesses for £418m 
the group regularly reviews its banking 
arrangements and currently has adequate 
facilities available to it the group issued two 
bonds in september 2013
currently undertreated markets we also have 
a strong pipeline as we look to deliver to 
patients the next generation products for 
opioid addiction these longerterm prospects 
will be tempered with shortterm volatility we 
continue to expect erosion of film share with 
some more price sensitive patients and payors 
switching to cheaper alternatives we are 
pleased to announce that we have recently 
appointed a new chairman howard pien who 
will play an important part in the next stage of 
rb pharmaceuticals’ evolution
the strategic review we announced in october 
of last year is underway we will provide further 
information on this review during the course 
of 2014
category performance
health
net revenue increased to £2633m with 
likefor like	gr owth	of	10	it	was	a	very	
strong year for our consumer health category 
which had an excellent start innovationled 
growth was driven by mucinex with its further 
expansion beyond cough and congestion into 
sinus and cold  flu and aided by a long and 
strong season during the first half these 
successes provide a firm base on which to 
launch a further category extension within the 
mucinex franchise with the roll out of mucinex 
allergy – 24hour relief from indoor and 
outdoor allergies in 2014
our consumer health acquisitions are 
performing strongly in respect of schiff in the 
us the over achievement of synergies allowed 
for increased reinvestment behind the brands 
improved shelf presence and distribution in 
china our manyanshuning sore throat brand 
which came with the guilong acquisition  
has had a strong year and we are seeing 
encouraging results from our collaboration 
agreement with bms in latam 
hygiene
net revenue increased to £3835m with 
likefor like	gr owth	of	7	the	performance	
was driven by strong growth in the dettollysol 
franchise across all three of our areas our 
‘healthing’ campaign combined with the 
continued expansion and success of the power 
 free portfolio drove growth across ena in 
emerging market areas we continue to focus 
on driving brand equity building initiatives such 
as our new mums hospital visit and schools 
programmes our successful category extension 
of dettol kitchen gel has driven strong growth 
in india for both q4 and the full year hand 
wash was strong in both developed and 
costs from management changes as we address 
the operational issues 
the volatility in several of rumea’s markets  
is likely to remain in the near term however  
we remain confident that the organisational 
and operational changes being put in place 
together with our focus and strategy to drive 
the penetration of our brands should improve 
performance in the future 
the group’s two noncore businesses food 
and rb pharmaceuticals performed as follows
food 2013 net revenue was £325m a flat 
performance versus the prior year and also  
in the fourth quarter macro conditions 
surrounding the food category remain 
unchanged with weaker markets and  
lower inflation 
rb pharmaceuticals 2013 net revenue was 
£777m a decrease of 8 our volume market 
share for film in the us exited the year at 
68 broadly maintained since the entry of 
generic tablets the underlying volume growth 
in prescriptions in the us continues to be low 
double digit growth this growth is offset by 
the loss of our higher margin tablet sales in 
the us following our voluntary withdrawal of 
suboxone tablets in march and the entry of 
generic tablets now competing with our film 
our nonus business was impacted by 
government imposed price reductions in a 
number of european markets
operating profit decreased 21 to £428m 
the operating margin was down 890 bps to 
551 in line with earlier guidance the main 
drivers of the margin decline are negative 
leverage from the revenue decline negative mix 
of the lower margin albeit more sustainable 
film and increased rd investment in our 
clinical pipeline we expect this increase in rd 
investment to continue into 2014 and beyond 
as we continue to build a strong sustainable 
growth business 
there have been no further material 
developments in the three hatchwaxman 
challenges to the film patents in us we expect 
the litigation to follow the typical timelines  
for hatchwaxman litigation and believe the 
formulation and process patent protection to 
be strong 
rb pharmaceuticals is a strong sustainable 
business with good longterm prospects it  
has a marketleading physician and patient 
preferred product in the us with strong patent 
protection up until 2030 the business outside 
of the us has much potential in what are 
2013 results excluding rb pharmaceuticals
in light of the announcement of generic competition to suboxone in the us the group provides  
the following information relating to the performance of the business in 2013 excluding  
rb pharmaceuticals
     rb ex rb     rb 
 pharmaceuticals pharmaceuticals total rb
 £m  £m   £m  
net	r evenue	 9266	 5	 777	 8	 10043	 4
adjusted	operating	pr ofit	 2188	 7	 428	 21	 2616	 1
adjusted	operating	margin	 	 236	 	 551	 	 260
	likefor like	at	constant	exchange	rates		at	constant	exchange	rates rb annual report 2013 15
strategic report   operational detail
the board regularly considers and takes 
account of the significance of sustainability 
matters their potential risks to the business of 
the group and the opportunities to enhance 
value that may arise from an appropriate 
response including risks relating to 
environmental impacts employees society  
and communities as well as reputational risks 
the board undertakes a formal review of 
sustainability matters at least annually this 
includes providing oversight to ensure that the 
group has in place effective policies systems 
and procedures for managing sustainability 
matters and mitigating significant sustainability 
risks the board believes that it receives 
adequate information and training on 
sustainability matters and their potential risks 
and opportunities to the business of the group 
additionally the audit committee regularly 
reviews the arrangements for and effectiveness 
of risk management and internal audit 
including the full range of risks facing the 
group such as risks relating to sustainability 
matters reputational risks and risks relating  
to employees 
the ceo has specific responsibility for 
sustainability as part of established 
management processes which include 
performance management systems and 
appropriate remuneration incentives senior 
management reports directly to the ceo on 
sustainability matters on a regular basis on the 
executive committee ec the evp category 
development has operational accountability  
for the implementation of sustainability bar 
charitable giving in partnership with the evp 
supply and supported by the rest of the ec 
within their respective areas and functions
full year dividend of 137p per share 2012 
134p	an	overall	incr ease	of	2	the	
dividend if approved by shareholders at the 
agm on 7 may 2014 will be paid on 29 may 
to shareholders on the register at the record 
date of 21 february the exdividend date was 
19 february and the last date for election for 
the share alternative to the dividend is 7 may 
the final dividend will be accrued once 
approved by shareholders
contingent liabilities the group is involved 
in a number of investigations by government 
authorities and has made provisions for such 
investigations where appropriate where it is 
too early to determine the likely outcome of 
these matters or to make a reliable estimate 
the directors have made no provision for such 
potential liabilities 
the group from time to time is involved in 
discussions in relation to ongoing tax matters  
in a number of jurisdictions around the world 
where appropriate the directors make 
provisions based on their assessment of  
each case
our sustainability strategy  
 performance
in line with the requirements of the 2006 
companies act a rationale has been developed 
and a review undertaken to determine what 
information to include in this report as 
necessary for an understanding of the 
development performance and position of the 
business of the group relating to environmental 
matters including the impact of the group’s 
business on the environment its employees 
and social and community issues – referred to 
in this report as sustainability matters 
exceptional items a total pretax exceptional 
charge of £271m has been incurred during the 
year in respect of the following 
•	 	 £225m	charge	for	historic	r egulatory	issues	
principally competition law and
•	 	 £46m	r estructuring	costs	in	r elation	to	 
the new organisation acquisition and  
integration costs
these costs have previously been disclosed by 
the company in 2012 an exceptional pretax 
charge of £135m was incurred 
balance sheet at the end of 2013 the group 
had total equity of £6336m 2012 £5922m 
an	incr ease	of	7	net	debt	was	£2096m	
2012 £2426m and total capital employed in 
the business was £8432m 2012 £8348m
this finances noncurrent assets of £12248m 
2012 £12009m of which £761m 2012 
£736m is property plant and equipment the 
remainder being goodwill other intangible 
assets deferred tax available for sale financial 
assets retirement benefit surplus and other 
receivables the group has net working capital 
of minus £863m 2012 minus £700m current 
provisions of £215m 2012 £104m and 
longterm liabilities other than borrowings  
of £2554m 2012 £2678m
the group’s financial ratios remain strong 
return on shareholders’ funds net income 
divided by total shareholders’ funds was 
275 on a reported basis and 311 on an 
adjusted basis 2012 308 on a reported 
basis and 327 on an adjusted basis
dividends the board recommends a final 
dividend of 77p per share 2012 78p to give a 
annual key performance indicators kpis
the board and the executive committee have identified a number of kpis that are most relevant to the group and are used to measure performance
kpi 2013 2012 comments
net	r evenue	gr owth	excl	rb	pharmaceuticals	 5	 5	 measur es	the	incr ease	in	sales	of	the	gr oup	 
 likeforlike growth of net revenue   excl rb pharmaceuticals 
at constant exchange rates 
powerbrands 71  70 measures the growth and importance of the 
 of total net revenue from 19 powerbrands   group’s flagship brands
gross margin   594 579 measures the resources available for reinvestment 
gross profit as  of total net revenue    or profit growth
brand equity investment bei 130  127 measures the rate of reinvestment in the 
bei as  of total net revenue excl rb pharmaceuticals   group’s brands excl rb pharmaceuticals
operating	margin	 	 excl	rb	pharmaceuticals	 236	 234	 measur es	the	pr ofitability	of	the	gr oup 
    excl rb pharmaceuticals
adjusted	net	income	 2	 6	 measur es	the	overall	pr ofitability	of	the	gr oup
ear nings	per	shar e	fully	diluted 	 2698p	 2633p
1
 measures the increase in profit per share of the group 
	change	in	ear nings	per	shar e	fully	diluted 	 2	 7
net cash flow from operations £1930m £1735m measures how the group converts its profits into cash 
	 	 11	 10
net working capital £863m £700m measures the ability of the group to finance 
defined as inventories trade and other receivables and 86 73 its expansion and release cash from working capital 
trade and other payables as  of total net revenue 
management turnover 4 8  of top400 management that have left the group
 
 	 adjusted	to	exclude	the	impact	of	exceptional	items 
1
  restated refer to note 1 for further details 16 rb annual report 2013
strategic report   operational detail
supply chain responsibility and  
human rights
most product component and raw material 
supply chains present a number of potential 
reputational risks relating to labour standards 
health safety and environmental standards 
raw material sourcing and the social ethical 
and environmental performance of third party 
manufacturers and other suppliers the group’s 
global manufacturing standard for responsible 
production gms mandates minimum 
requirements regarding employment 
arrangements labour standards and health 
safety and environmental management in  
line with international guidelines for the 
group’s own manufacturing sites third party 
manufacturers and suppliers management 
processes and controls in place include  
group area and regional monitoring and 
assessment of compliance with the gms  
and other requirements
climate change
the effects of climate change could disrupt the 
group’s supply chain by affecting the group’s 
ability to source raw materials manufacture 
products and distribute products due to the 
group’s industry sectors and product categories 
the ghg emissions originating from energy use 
at its direct operations are of mediumtolow 
impact in comparison to those of other similarly 
sized companies as assessed for example in 
recent reports of the independent carbon 
disclosure project cdp wwwcdprojectnet
under the companies act 2006 strategic and 
directors’ report regulations 2013 quoted 
companies are required to report their annual 
carbon emissions for the period 1 january 
2013 to 31 december 2013 the group’s 
emissions in tonnes of carbon dioxide 
equivalents tco
2
e from 
•	 	 	 combustion	 of	 fuel	 and	 operation	 of	 facilities	
scope 1 were 80806 tco
2
e
•	 	 electricity 	 heat	 steam	 and	 cooling	 pur chased	
for own use scope 2 were 206956 tco
2
e
•	 	 t otal	scope	1	and	scope	2	emissions	wer e	
287762 tco
2
e
the group’s intensity measurement for the 
same period was 00398 tco
2
e	per	unit	of	
production tco
2
e per 1000 cu
	data	assur ed	by	er nst		y oung	
methodology for calculating the annual 
carbon emissions
we have reported on all of the emission sources 
required under the companies act 2006 
strategic and directors’ report regulations 
2013 we report all ghg emissions from 
operations including global manufacturing 
warehouse rd covered by the consolidated 
financial statements for which we have 
operational control with the exception of 
offices’ emissions and medcom fleet 
emissions we will endeavour to include  
office and medcom fleet emissions in 2014 
reporting in the case of acquisitions of 
businesses the emissions are included in  
the first full calendar year of rb ownership  
co
2
e emissions were calculated using 
internationally recognised methodologies from 
potential sustainability risks the issues of 
greatest concern for the group’s stakeholders 
the issues that society has identified as 
important through regulation and international 
standards and those issues covered by our 
existing policies and commitments
key sustainability issues for  
the business
•	 sustainable	pr oduct	innovation	
•	 hygiene	and	illnesspr evention
•	 human	rights
•	 consumer	behaviour	change
•	 responsible	supply	chain
•	 pr oduct	stewar dship	
•	 natural	raw	material	sour cing
•	 	 envir onmental	impact	r eduction	 
– water energy greenhouse gas 
emissions ghg waste
•	 pollution	contaminated	land	
•	 health	and	safety
strategic sustainability priorities
the aspects the group has identified are 
common to many fast moving consumer  
goods fmcg companies with wellknown 
brands and are essentially determined by the 
group’s sectors and the products the group 
manufactures and sells the group’s strategic 
priorities therefore remain 
1  to achieve continual improvement in our 
overall sustainability performance focusing 
on those issues where we can make a 
significant difference including global health 
and hygiene sustainable product innovation 
greenhouse gas ghg emissions and water 
impact and
2  to manage our business in a socially and 
ethically responsible manner
the group’s approach to sustainability in 
support of the group’s vision purpose and 
business strategy includes four key goals  
for 2020
•	 	 onethir d	r eduction	in	carbon	footprint	and	
water impact per dose of product
•	 	 onethir d	of	net	r evenue	fr om	mor e	
sustainable products
•	 	 help	 over	 200	 million	 people	 to	 impr ove	their	
health and hygiene
•	 	 partner	with	save	the	childr en	to	deliver	a	
vision of stopping diarrhoea from being the 
world’s second biggest cause of death of 
children under five
these high level goals are supported by specific 
targets and functional programmes grouped 
under three areas better design better 
production and healthier communities the 
group focuses on a number of specific topics  
to deliver against the strategic priorities these 
include but are not limited to
in the category development organisation  
the category group director – sustainability 
sourcing  consumer sciences manages the 
sustainability programme on a daytoday basis 
our senior vice president svp of corporate 
communication and affairs is responsible for 
the group’s strategic charitable giving the  
rd function includes the global regulatory 
affairs gra group which is responsible for 
ensuring that our products meet regulatory 
requirements and are safe for their intended 
use our svp human resources hr and  
the global hr function manage the group’s 
human resources employee remuneration and 
benefits employment practices organisational 
development training and elements of health 
and safety eg stress management 
key areas of sustainability internal control  
and performance including sustainability 
disclosures are independently reviewed  
and verified by both internal and external 
organisations including internal audit and 
their findings regularly reported to senior 
management the ceo the audit committee 
and the board the board has identified and 
assessed the range of sustainability and 
associated reputational risks and concluded 
that there are limited material risks to the 
group’s long and shortterm value arising from 
sustainability matters other than potential risks 
common to similarly sized businesses operating 
in its industry sectors and with similarly 
wellknown brands
the group has a full set of policies 
programmes and control arrangements 
building on its central code of conduct that 
address the full range of sustainability matters 
and reputational risks the code itself is the 
subject of an annual training and awareness 
programme and is covered by an annual review 
and certification process carried out by internal 
audit and the legal department the code and 
other group policies relating to sustainability 
can be found at wwwrbcom
sustainability focus areas
the group has identified the key sustainability 
issues for the business following 
accountability’s 5part materiality test and the 
gri technical protocol on applying the report 
content principles this process includes an 
assessment of the group’s significant aspects 
americans search online when their 
coughs and colds start rb partnered with 
a us specialist counting who was going 
online where so when 
an area of the us was 
starting to catch a cold 
mucinex was advertising 
right there to tell them 
how it could help
mucinex – when the 
cough starts  rb annual report 2013 17
strategic report   operational detail
the group’s activities expose it to a number  
of risks which while actively managed as 
described above may still adversely impact the 
business and its financials the principal risks 
that in the opinion of the directors pose the 
most significant threat to the delivery of the 
group’s strategic objectives are as follows  
with a more expansive explanation provided  
on pages 93 to 100 of this report the group 
recognises the risks described here and has 
taken measures addressed in this report and  
in previous reports to mitigate these risks
we could be adversely affected by economic 
conditions in and political developments 
affecting the markets in which we operate  
a variety of factors may adversely affect our 
results of operations and financial condition 
during periods of economic uncertainty or 
instability social or labour unrest or political 
upheaval in the markets in which we operate 
such periods may also lead to government 
actions such as imposition of martial law  
trade restrictions foreign ownership 
restrictions capital price or currency controls 
nationalisation or expropriation of property  
or other resources or changes in legal and 
regulatory requirements and taxation regimes 
we may also be unable to access credit markets 
materially adversely affecting our liquidity and 
capital resources or cost of capital 
our powerbrands collectively contribute a 
significant portion of our revenue and any 
material adverse change to demand for existing 
powerbrands or any future products we may 
develop could have a material adverse effect 
on our business 
consumer preferences tastes and habits  
are constantly evolving various factors  
some of which are beyond our control may 
have an adverse impact on demand for our 
powerbrands similarly we may fail to  
respond to changing consumer wants or  
fail to differentiate our powerbrands from 
competitors’ products both of which  
could adversely impact consumer demand  
for our products 
our business financial condition and results of 
operations substantially depend on our ability 
to improve our existing products and 
successfully develop and launch new products 
and technologies 
if we are unable to successfully develop  
launch and market new products that obtain 
consumer interest and acceptance we may be 
unable to compete and maintain or grow our 
market share if we enter new categories or 
geographies in which we have limited 
experience we may be exposed to unexpected 
or greater risks
substantial harm to our reputation or the 
reputation of one or more of our brands may 
materially adversely affect our business  
various factors may adversely impact our 
reputation including product quality 
inconsistencies or contamination resulting in 
recalls reputational risks may also arise from 
our third parties’ labour standards health 
safety and environmental standards raw 
material sourcing and ethical standards we 
may also be the victim of product tampering or 
counterfeiting or grey imports any litigation 
lost working day accident rate between 2012 
and 2013 zero fatalities in 2013
the group’s 2012 sustainability report 
published on 31 may 2013 describes progress 
made in key sustainability topics for example
•	 	 at	the	end	of	2012	the	gr oup	had	achieved	
a 25 reduction in lifecycle carbon 
emissions per dose compared to the 2007 
baseline this was a reduction of 46 
compared to 2011
•	 	 our	continued	support	of	the	inter national	
charity save the children reaching 150000 
children in 2012
the 2013 sustainability report will be published 
in april 2014 and will provide a full update on 
progress towards meeting our new 
sustainability goals and targets
the sustainability and corporate responsibility 
section on the group’s website wwwrbcom
sustainability and its annual sustainability 
reports available at wwwrbcom provide 
further information on its policies systems and 
procedures for managing sustainability matters 
and the risks and opportunities that may arise 
from them including the extent to which it 
complies with those policies systems and 
procedures key performance indicators kpis 
and its sustainability programmes targets and 
progress the group reports in line with the 
global reporting initiative’s sustainability 
reporting guidelines – version 30 gri g3 – 
wwwglobalreportingorg and a content index 
and application level table is provided in the 
sustainability report selected data in the 
annual sustainability report is assured by 
external auditors 
for more information see our 2012 
sustainability report published on 31 may 
2013 at wwwrbcomsustainabilityreport2012 
and also our 2013 sustainability report to be 
published in april 2014 
principal risks
rb operates a major risk assessment process  
to identify assess control mitigate and review 
those risks it considers to be most significant  
to the successful execution of our strategy the 
most senior managers of our business dedicate 
time each year in a facilitated discussion with 
the group risk team to consider the risk 
environment for their particular functional or 
geographic area of responsibility and how their 
emerging or known risks could impact on the 
achievement of the group’s strategic objectives 
similar sessions are held with the group’s 
external advisors the key content from these 
sessions are then synthesised into the group’s 
‘top ten’ risks with each risk having an ec 
owner who is accountable for executing the 
current control strategy and for compiling and 
executing a plan of mitigating actions to 
properly manage the group’s exposure to that 
risk progress is reviewed periodically and the 
full output from the major risk assessment 
process is formally submitted annually by the 
ec to the board for its consideration and 
endorsement through the course of each year 
the ec and board agendas address all of the 
top risks through specific deep dives to ensure 
proper focus and progress with mitigation
the wriwbcsd greenhouse gas protocol and 
international energy authority iea 
the group has taken a leadership position  
with regard to its products’ total carbon 
footprint by seeking to understand measure 
and reduce the ghg emissions generated by  
all stages in the product lifecycle for its global 
product portfolio and including amongst other 
things the raw and packaging materials 
provided by its suppliers the group’s own 
direct manufacturing and other operations 
transportation of both raw materials and 
finished products the retail sale of its  
products consumers’ use of its products and 
the disposalrecycling of those products and 
their packaging 
rb’s global ingredient guidelines gig
rb has been monitoring and reviewing 
ingredients for the past 12 years and has been 
carrying out a range of ingredients removal and 
restriction programmes outlined in our gig 
our objective is to continually improve the 
environmental safety and sustainable profile of 
our products by systematically removing 
specific ingredients from product formulae and 
packaging  device component specifications  
our gig combines regulatory sustainability and 
safety requirements for generic ingredient 
groupings plus specific directions on the use 
or the prohibition of use of specific raw 
materials  ingredients to assist formulators and 
other company employees in the development 
and marketing of products that meet these 
commitments
health and safety management
accidents caused through a failure of the 
group’s safety management systems could 
potentially lead to loss of life for one or more  
of the group’s employees the group maintains 
an external certification to ohsas 18001 for 
the group’s management of heath and  
safety issues and a programme covering 
manufacturing sites warehouses distribution 
centres and laboratories
progress 
the group has a longstanding record of 
measuring and managing sustainability issues 
progress to date includes
•	 	 a	16	r eduction	in	ghg	emissions	 
from manufacturing  warehouse sites 
20002013
•	 	 continuation	of	rb’ s	tr ee	planting	initiative	
for three more years 2012 – 2014 by the 
end of 2013 615 million native trees had 
been planted in canada including 351000 
in 2013 which continues to make rb’s 
manufacturing operations effectively carbon 
neutral 20062014
•	 	 a	52	r eduction	in	manufacturing	and	
warehouse energy per unit of production 
20002013
•	 	 a	43	r eduction	per	unit	of	pr oduction	of	
water use 20002013
•	 	 a	9	r eduction	per	unit	of	pr oduction	of	
waste 20002013
•	 	 a	93	r eduction	in	accident	rates	since	
2001 including over 5 reduction in the  18 rb annual report 2013
strategic report   operational detail
systems in such countries may not be well
established reliable or enforced and there may 
be difficulties in obtaining legal redress 
particularly against the state or stateowned 
entities creating higher operational costs and 
risks to our business 
we could be subject to investigations and 
potential enforcement action which could have 
a material adverse effect on our business  
we could be subject to regulatory investigations 
or potential enforcement action that targets 
ingredients an industry a set of business 
practices or our specific operations regulatory 
authorities and consumer groups may request 
or conduct reviews of the use of certain of our 
ingredients or ingredient legislation may 
change these could result in a need to change 
our formulations which could be costly or may 
not be possible 
historical or future violations of antitrust and 
competition laws may have a material adverse 
impact on our business financial condition and 
results of operations  
failure to comply with applicable antitrust and 
competition laws rules and regulations in any 
jurisdiction may result in civil andor criminal 
legal proceedings as part of the announcement 
of our hy 2013 results we reported a provision 
of £225m principally relating to competition 
matters our ultimate liability for such matters 
could exceed this provision 
we operate in a number of countries in which 
bribery and corruption pose significant risks 
and we may be exposed to liabilities under 
antibribery laws for any violations any 
violation of applicable money laundering laws 
could also have a negative impact on us 
we are subject to the uk bribery act 2010 the 
us foreign corrupt practices act of 1977 as 
amended and similar laws worldwide given 
our extensive international operations we are 
exposed to significant risks particularly with 
respect to parties not subject to our control 
such as agents and joint venture partners and 
also through businesses we acquire 
our business is subject to product  
liability claims  
we may be subject to legal proceedings and 
claims arising out of our products including  
as a result of unanticipated side effects or 
issues that become evident only after products 
are widely introduced into the marketplace  
or additionally claims that our products are 
defective contain contaminants provide 
inadequate warnings or instructions or  
cause personal injury to persons or damage  
to property we may be required to pay 
compensation for losses or injuries or have  
to pay substantial damages and related costs 
or additionally be subject to the imposition of 
civil and criminal sanctions 
legal proceedings in respect of claims outside 
the product liability area could also adversely 
impact our business results of operations and 
financial condition  
outside the product liability area we are 
subject to legal proceedings and other claims 
arising out of the ordinary course of business 
including but not limited to claims alleging 
intellectual property rights infringement breach 
volatility in the price of commodities energy 
and transportation may impact our profitability  
increases in cost or decreases in availability 
could adversely affect our profitability if we are 
unable to pass on the higher costs as price 
increases or achieve cost efficiencies 
we have grown and may continue to grow in 
part through acquisitions joint ventures and 
business alliances which involve various risks  
acquisitions present a range of risks and 
uncertainties in addition to the risk of 
management resource requirements to handle 
the acquisition and the base business 
simultaneously there could be increased debt 
and interest payments to fund larger acquisitions 
which could place pressure on our credit rating 
we may fail in achieving an acquisition yet still 
bear substantial outofpocket expenses we 
may fail to achieve projected benefits of an 
acquisition or we may take on unforeseen 
future liabilities with an acquisition 
we may be unable to attract and retain 
qualified personnel including key  
senior management  
the market for talent is intensely competitive 
and we could face challenges in sourcing 
qualified personnel if we are unable to achieve 
our performance targets our senior management 
would not be entitled to their variable pay 
which may operate as a disincentive for them 
to continue their employment with us 
a disruption to or failure of our information 
technology systems and infrastructure may 
adversely affect our business  
failures or disruptions to our systems or the 
systems of third parties on whom we rely  
due to any number of causes particularly if 
prolonged or if any failure or disruption were 
to impact our backup or disaster recovery plans 
could result in a loss of key data andor affect 
our operations suboptimal implementations 
of new systems could occur our computer 
systems software and networks may be 
vulnerable to unauthorised access computer 
viruses or other malicious code and other cyber 
threats that could have a security impact all  
of these could be costly to remedy and we may 
be subject to litigation
our business is subject to significant 
governmental regulation  
regulation is imposed in respect of but  
not limited to ingredients manufacturing 
standards labour standards product safety  
and quality marketing packaging labelling 
storage distribution advertising imports and 
exports social and environmental responsibility 
and health and safety these regulations can 
change and may become more stringent 
additionally we are required to obtain maintain 
and update licences for some products if we 
are found to be noncompliant with applicable 
laws and regulations we could be subject to 
civil remedies such as fines injunctions or 
product recalls andor criminal sanctions 
the laws and regulations to which we  
are subject may not be transparent may  
be difficult to interpret andor may be  
enforced inconsistently  
emerging markets can pose heightened risks 
with respect to laws and regulations the legal 
disputes on tax matters and pay structures may 
subject us to negative attention in the press 
which can damage reputation 
we could be materially adversely affected by 
the loss of revenue from the sales of suboxone 
and subutex 
our rb pharmaceuticals’ business may face 
price pressure or share loss from the increased 
branded and generic competition that is 
entering the market both in the us and in  
the rest of world leading to a material  
reduction in net revenue from this product 
adversely affecting our overall revenues and 
operating profit
we could be impacted by the fact we compete 
in intensely competitive industries  
we compete with wellestablished local 
regional national and international companies 
including private label and generics some of 
these may have more resources to establish  
and promote their products if we are unable  
to offer products that consumers choose over 
our competitors’ products or maintain 
successful relationships with our trade 
customers who determine access to shelf space 
and promotions or to effectively compete in 
new channels our business and results could 
be materially impacted 
we are exposed to foreign currency exchange 
rate risk  
in fy 2013 93 of our net revenue was 
derived from markets outside the uk the 
sterling value of our revenues profits and cash 
flows from nonuk markets may be reduced or 
our supply costs as measured in sterling in 
those markets may increase additionally 
competitors may benefit if they incur costs in 
weaker currencies relative to sterling we 
currently hedge some of our currency exposures 
using financial instruments but we may not  
be effective 
we are subject to the risk that countries in 
which we operate may impose or increase 
exchange controls or devalue their currency  
we operate in markets which have been known 
to impose exchange controls such controls 
may restrict or make it impossible to repatriate 
earnings borrow on the international markets 
to fund operations in that country or limit our 
ability to import raw materials or finished 
products additionally we operate in markets 
that are prone to currency devaluations which 
can make our products more expensive in local 
currency terms
we face risks of interruptions of our supply 
chain and disruptions in our production 
facilities which could materially adversely affect 
our results of operations  
we may face risks to continuity of supply arising 
from certain specialised suppliers both of raw 
materials and of third party manufactured items 
significant disruptions to our own or our 
suppliers’ operations may affect our ability to 
source raw materials and negatively impact our 
costs suppliers may fail to fulfil their contractual 
obligations replacing suppliers may require 
them to be qualified under industry 
governmental or our standards which could 
require investment and may take time  rb annual report 2013 19
strategic report   operational detail
a going concern and maintain an efficient 
capital structure to optimise the cost of capital 
the group monitors net debt total borrowings 
less cash and cash equivalents shortterm 
available for sale financial assets and financing 
derivative financial instruments and at the year 
end the group had net debt of £2096m  
2012 £2426m the group seeks to pay 
down net debt using cash generated by the 
business to maintain an appropriate level  
of financial flexibility details of numerical 
disclosures relating to the group’s financial risk 
management are included in note 14 to the 
financial statements on pages 70 to 73 
a more detailed explanation of risks is on  
page 93
our prospects
we are targeting
•	 	 net	r evenue	gr owth	of	45
•	 	 flat	to	moderate	operating	margin	
expansion
these targets exclude rb pharmaceuticals
	 	 at	constant	rates	including	the	immaterial	impact	
of the bms collaboration
	 	 adjusted 	 to 	 exclude 	 the 	 impact 	 of 	 exceptional 	 items
post balance sheet event
on 24 february 2014 part of a current wider 
legal case was settled which related to one of 
the current provisions held at the balance sheet 
date the remaining provisions that were held 
in relation to this case at the balance sheet date 
are still considered to be appropriate
cautionary note concerning forward 
looking statements
this document contains forward looking 
statements including statements with respect to 
the financial condition results of operations and 
business of rb and certain of the plans and 
objectives of the company with respect to these 
items these forward looking statements are made 
pursuant to the ‘safe harbor’ provisions of the 
united states private securities litigation reform act 
of 1995 in particular all statements that express 
forecasts expectations and projections with 
respect to future matters including trends in 
results of operations margins growth rates 
overall market trends the impact of interest or 
exchange rates the availability of financing to the 
company anticipated cost savings or synergies 
and the completion of strategic transactions are 
forward looking statements these forward 
looking statements are not guarantees of future 
performance by their nature forward looking 
statements involve known and unknown risk and 
uncertainty and other factors because they relate 
to events and depend on circumstances that will 
occur in the future there are a number of factors 
discussed in this annual report that could cause 
actual results and developments to differ materially 
from those expressed or implied by these forward 
looking statements including many factors outside 
rb’s control past performance cannot be relied 
upon as a guide to future performance each 
forward looking statement speaks as of the date 
of the particular statement
by order of the board
rakesh kapoor ceo
7 march 2014
at 31 december 2013 we had £4350m in 
undrawn commitments if we are not able to 
access the commercial paper market to the 
extent that we require we may need to 
drawdown amounts under our committed 
bilateral credit facilities which accrue interest at 
floating rates increases in such rates could result 
in significantly higher interest expense for us 
we are subject to risks relating to estimates and 
assumptions that we are required to make and 
that may affect the reported amounts in our 
financial statements  
the preparation of our financial statements 
requires management to make some estimates 
and assumptions based on management’s best 
knowledge at the time actual amounts may 
however ultimately differ from those estimates 
we are subject to a range of compliance and 
routine risks as part of everyday business 
in order to manage the more numerous and 
routine risks the group maintains a complete 
and robust governance framework 
we may face risks based on changes to  
market prices 
due to the nature of its business the group is 
exposed to commodity price risk related to the 
production or packaging of finished goods such 
as oilrelated and a diverse range of other raw 
materials this risk is however managed 
primarily through mediumterm contracts with 
certain key suppliers and is not viewed as being 
a material risk the group is not exposed to 
equity securities’ price risk
we are subject to risks related to interest  
rate changes 
the group has both interestbearing and non 
interestbearing assets and liabilities the group 
monitors its interest expense rate exposure on a 
regular basis the group manages its interest 
rate exposure on its gross financial assets by 
using fixed rate term deposits
there is potential for credit risks with financial 
institutions around the globe 
the group has no significant concentrations of 
credit risk financial institution counterparties 
are subject to approval under the group’s 
counterparty risk policy and such approval is 
limited to financial institutions with a bbb 
rating or above the group uses bbb and 
higher rated counterparties to manage risk and 
uses bbb rated counterparties by exception  
the amount of exposure to any individual 
counterparty is subject to a limit defined within 
the counterparty risk policy which is reassessed 
annually by the board
liquidity risk
the group has bilateral credit facilities with 
highquality international banks all of these 
facilities have similar or equivalent terms and 
conditions and have a financial covenant 
which is not expected to restrict the group’s 
future operations the committed borrowing 
facilities together with available uncommitted 
facilities and central cash and investments are 
considered sufficient to meet the group’s 
projected cash requirements 
capital management risk
the group’s objectives for managing capital are 
to safeguard the group’s ability to continue as 
of contract environmental laws and health and 
safety laws and advertising claims significant 
claims or a substantial number of small claims 
may be expensive to defend and may divert 
management time and resources away from 
our operations 
labour disruptions may affect the results of  
our operations  
a substantial portion of our workforce is 
unionised and we are party to collective 
bargaining agreements covering approximately 
onethird of our direct employees our ability  
to negotiate these agreements satisfactorily or 
our relationship with unions including labour 
disputes or work stoppages could have an 
adverse impact on our business 
changes in tax legislation and other 
circumstances that affect tax calculations could 
adversely affect our financial condition and 
results of operations 
we are subject to tax laws and transfer pricing 
regulations in multiple jurisdictions including 
those relating to the flow of funds between rb 
and its subsidiaries our effective tax rate in any 
given financial year reflects a variety of factors 
that may not be present in succeeding financial 
years and may be affected by changes in the 
tax laws of the jurisdictions in which we 
operatetax authorities may challenge our 
arrangements and if material challenges were 
to be successful our effective tax rate may 
increase and we may incur significant costs 
any of the foregoing could materially and 
adversely affect our business 
we may be unable to secure and protect our 
intellectual property rights  
even if obtained these rights may be 
invalidated circumvented or challenged in 
future and third parties may infringe on or 
misappropriate our rights we may fail to 
discover any infringements of our intellectual 
property rights or be unable to successfully 
defend and enforce our rights 
the loss of patent protection ineffective 
protection or expiry of our patents may impact 
our financial condition and results of operations  
patent protection varies in different countries 
and can be substantially weaker in emerging 
markets we may face challenges in enforcing 
or extending our current intellectual property 
protections or any protections we may obtain 
in future in these markets 
we may face challenges to our intellectual 
property rights including allegations of 
infringement of others’ rights  
if we are unable to successfully defend against 
these challenges we may face various 
sanctions including injunctions monetary 
sanctions product recalls alterations to our 
intellectual property products andor 
packaging which could result in significant 
expense and negative publicity 
our business may be adversely affected by our 
funding requirements 
our liquidity needs are driven by our ability to 
generate cash from operations and the level of 
borrowings the level of acquisitions the level 
of share repurchases and dividends disposals 
target ratings for our debt and options available 
to us in the equity and debt markets    20 rb annual report 2013
governance  remuneration   board of directors and executive committee
roberto funari brazilian 
evp  lapac from 1 july 2013 rejoined in 
february 2013 following two years at imperial 
tobacco where he was group marketing 
director and executive committee member  
in his prior 12year career with the group 
roberto held increasingly senior marketing and 
general management roles in both emerging 
and developed markets including brazil 
netherlands south africa and central europe 
his last role was as global category officer for 
fabric and home care 
rob de groot dutch  
evp  ena joined in 1988 after international 
roles in marketing and sales he became general 
manager the netherlands then svp  regional 
director eastern europe and was appointed 
global category officer surface and dish 
before being appointed evp north america  
australia rob is responsible for north america 
northern europe central europe southern 
europe and western europe and is 
headquartered in amsterdam
adrian hennah british 
chief financial officer cfo 
gareth hill south african 
svp  information services joined in 2006 
previously information systems director at 
arcadia group ltd prior to arcadia gareth was 
at ibm uk ltd rex trueform clothing ltd in 
south africa and arthur andersen he is a 
qualified chartered accountant
rakesh kapoor indian  
chief executive officer ceo 
frederic larmuseau belgian 
evp  rumea joined in 2001 as marketing 
director for malaysia  singapore in 2003 he 
became regional marketing director for east 
asia and in 2005 became global category 
director for vanish in 2008 he was appointed 
general manager for brazil and a year later was 
promoted to svp regional director latin 
america in january 2013 frederic was 
appointed to svp regional director north 
america and was appointed evp of rumea in 
june 2013 
simon nash british 
svp  human resources joined in 2009 from 
novartis consumer health where he was 
global head of hr for the consumer health 
division based in switzerland simon started his 
international career with procter  gamble in 
detergent manufacturing before moving into 
hr with mars confectionery he moved to new 
york in 1993 with kraft foods international and 
then on to chicago as hr head of the office 
products subsidiary of fortune brands inc
joined rb in 1987 and served in various 
regional and central marketing roles he  
was appointed evp category development in  
2006 with responsibility for global category 
management rd media market research 
and strategic alliances
andré lacroix fr ench		 
appointed a nonexecutive director in 2008 
and the senior independent director in june 
2013 he is group chief executive of inchcape 
plc and chairman of good restaurants ag  
he was previously chairman and ceo of euro 
disney and has also held positions at burger 
king diageo colgate pepsico and ernst   
young llp 
judith sprieser	american	‡	 
appointed a nonexecutive director in 2003 and 
chair of the remuneration committee in 2004 
she was previously ceo of transora inc and 
executive vice president formerly cfo of sara 
lee corporation she is a director of allstate 
insurance company intercontinental exchange 
inc royal ahold nv and experian plc
warren tucker	british		 
appointed a nonexecutive director in 2010 
he was cfo of cobham plc from 2003 until 
2013 he is a chartered accountant and 
previously held senior finance positions at  
cable  wireless plc and british airways plc  
he is nonexecutive director and chairman
designate of paypoint plc and a nonexecutive 
director of thomas cook group
 member of the audit committee 
‡ member of the remuneration committee 
 member of the nomination committee 
executive committee
heather allen canadian 
evp  category development joined in 1996 
she undertook a number of senior marketing 
roles in eastern europe before becoming 
marketing director us in 1999 she was 
appointed general manager canada in 2003 
and joined the global head office in the uk in 
2006 as global category officer germ 
protection surface and personal care she was 
appointed to her current role in may 2011
amedeo fasano italian 
evp  supply joined in 1997 as supply director 
italy after the reckitt  colman and benckiser 
merger he was appointed manufacturing 
director for central south western and 
southern europe regions in 2002 he became 
regional supply director north america and in 
2003 svp supply north america australia and 
new zealand in 2007 he took over the role of 
svp supply developing markets and in march 
2009 amedeo was appointed as evp supply 
he previously worked for pirelli tyres in multiple 
supply roles in italy turkey argentina and uk
the board of directors
adrian bellamy	british	‡	 
appointed a nonexecutive director in 1999 
and nonexecutive chairman in may 2003  
he is a director of the gap inc and a director 
and chairman of williamssonoma inc  
he was formerly chairman of the body shop 
international plc and a director of various 
companies including gucci group nv and  
the robert mondavi corporation
richard cousins	british	‡	 
appointed a nonexecutive director in 2009 
he is ceo of compass group plc he was ceo 
of bpb plc and nonexecutive director of po 
and hbos richard will not offer himself for 
reelection at the agm in may 2014 and will 
retire from the board after the agm
nicandro durante	brazilianitalian	 
appointed a nonexecutive director in 
december 2013 he is ceo of british american 
tobacco plc bat nicandro has had an 
extensive career at bat and became chief 
operating officer in january 2008 and ceo  
in march 2011 
dr peter harf	german	 
appointed a nonexecutive director in 1999 
and is the deputy chairman he was chairman 
of the remuneration committee until june 
2004 peter is the ceo of parentes holding se 
formerly joh a benckiser and a director of 
coty inc he is also chairman of labelux and 
the nonprofit dkms foundation
adrian hennah british 
appointed cfo designate in january 2013 and 
director and cfo in february 2013 he joined 
following six years at smith  nephew plc as 
cfo he was cfo at invensys for four years and 
spent 18 years at glaxosmithkline plc where 
he held a number of senior management and 
financial roles adrian also worked at pwc in 
audit and consultancy he is a nonexecutive 
director of reed elsevier plc and reed  
elsevier nv
kenneth hydon	british		 
appointed a nonexecutive director in 2003 
and chairman of the audit committee in  
2006 he is a fellow of the chartered institute 
of management accountants the association 
of chartered certified accountants and the 
association of corporate treasurers he was  
the senior independent director between 2005 
and 2006 he retired as cfo of vodafone 
group plc in 2005 and was a nonexecutive 
director of tesco plc from 2004 to 2013 he is 
a nonexecutive director of pearson plc and 
merlin entertainments plc
rakesh kapoor	indian	 
joined the board in september 2011 following 
his appointment as ceo of the company he 
board of directors and  
executive committee rb annual report 2013 21
governance  remuneration   report of the directors
biographical details of the current directors are 
set out on page 20
graham mackay who served on the board as 
nonexecutive director and was the nominated 
senior independent director resigned as a 
director of the company on 12 june 2013 
andré lacroix was designated as the senior 
independent director on 12 june 2013
directors’ interests
a statement of directors’ interests in the share 
capital of the company is shown in table 1 at 
the end of this report
details of directors’ options to subscribe for 
shares in the company are included on  
page 46 in the audited part of the directors’ 
remuneration report
no director had a material interest at any time 
during the year in any derivative or financial 
instrument relating to the company’s shares 
the details of the directors’ remuneration and 
service agreements are set out in the directors’ 
remuneration report on pages 34 to 46
environmental social and governance 
esg matters 
information on esg and related matters is set 
out in the strategic report on pages 15 to 17
disclosure of greenhouse gas ghg 
emissions 
information on the required disclosure of the 
group’s ghg emissions for the year ended  
31 december 2013 is set out in the strategic 
report on pages 16 to 17
sustainability and corporate responsibility
information on the group’s management of 
sustainability and corporate responsibility issues 
is provided in the strategic report on pages 15 
to 17 and in the group’s annual sustainability 
reports which provide information on its 
policies programmes targets and progress in 
this area
political donations
no political donations or expenditure of the 
type requiring disclosure under s366 and s367 
of the companies act 2006 2006 act were 
made in the year ended 31 december 2013 nor 
are any contemplated
takeover directive
the company is required to disclose certain 
additional information required by s992 of the 
2006 act which implemented the eu takeovers 
directive the following sets out disclosures not 
covered elsewhere in this annual report
the articles give the board power to appoint 
directors but also require directors to submit 
themselves for election at the first agm 
following their appointment under the 
articles all directors are required to offer 
themselves for reelection every three years 
the uk the group is committed to the 
principle of equal opportunity in employment 
no applicant or employee receives less 
favourable treatment on the grounds of 
nationality age gender religion race  
ethnicity or disability the group recognises  
its responsibilities to disabled persons and 
endeavours to assist them to make their full 
contribution at work where employees 
become disabled every practical effort is made 
to allow them to continue in their jobs or to 
provide retraining in suitable alternative work
it is essential to the continued improvement  
in efficiency and productivity throughout the 
group that each employee understands the 
group’s strategies policies and procedures 
open and regular communication with 
employees at all levels is an essential part  
of the management process a continuing 
programme of training and development 
reinforces the group’s commitment to 
employee development 
regular departmental meetings are held  
where opinions of employees are sought  
on a variety of issues the group operates 
multidimensional internal communications 
programmes which include the provision of a 
group intranet and the publication of regular 
group newsletters
group incentive schemes reinforce financial and 
economic factors affecting the performance  
of the business employees typically have three  
to five performance objectives which are  
directly linked to their job and their specific 
contribution to the overall performance of the 
group in addition presentations and videos 
are given to employees around the group on 
publication of the group’s financial results  
the board encourages employees to become 
shareholders and to participate in the group’s 
employee share ownership schemes should 
they so wish sharesave schemes covering most 
of the world give employees the opportunity to 
acquire shares in the company by means of 
regular savings
directors
the directors who held office during year and 
those serving at the date of this report are 
adrian bellamy 
richard cousins 
liz doherty resigned 12 february 2013 
nicandro durante appointed 1 december 
2013 
peter harf 
adrian hennah appointed 12 february 2013 
kenneth hydon 
rakesh kapoor  
andré lacroix 
graham mackay resigned 12 june 2013 
judith sprieser 
warren tucker 
the directors submit their annual report 
and audited consolidated financial 
statements of the group for the year 
ended 31 december 2013 to the members 
of the company
future developments
information on the likely future developments 
of the group is set out in the operational detail 
on pages 9 to 19 and in the chief executive’s 
statement on pages 3 to 8 respectively
audited results for the period are set out on 
pages 50 to 84 
in the view of the directors the group’s  
likely future developments will centre on its 
main product categories of health hygiene  
and home 
risk management objectives and policies
the group’s financial risk management 
objectives and policies are set out on pages 17 
to 19 of the strategic report and in note 14 on 
pages 70 to 73
the information referred to above is 
incorporated by reference into and shall be 
deemed to form part of this report this 
report of the directors has been drawn up and 
presented in accordance with and in reliance 
upon applicable uk company law and the 
liabilities of the directors in connection with 
this report shall be subject to the limitations 
and restrictions provided by such law
dividend
in july 2013 the directors resolved to pay an 
interim dividend of 60p per ordinary share 
2012 56p the dividend was paid on  
26 september 2013 the directors are 
recommending a final dividend for the year  
of 77p per share 2012 78p which together 
with the interim dividend makes a total for the 
year of 137p per share 2012 134p the final 
dividend if approved by the shareholders will 
be paid on 29 may 2014 to shareholders on 
the register at the close of business on  
21 february 2014
research and development
the group continues to carry out rd in the 
search for new and improved products in all  
its categories and for increased manufacturing 
efficiencies direct expenditure on rd in 2013 
amounted to £199m 2012 £171m
acquisitions and disposals
information on the company’s acquisition and 
disposal activities during the year and up to the 
date of this report is set out in the strategic 
report on page 5 
employees 
during 2013 the group employed an average 
of 37100 2012 35900 people worldwide of 
whom 3700 2012 3700 were employed in 
report of the directors 22 rb annual report 2013
governance  remuneration   report of the directors 
authority to purchase own shares
shareholders approved a resolution for the 
company to make purchases of its own shares 
at the agm in 2013 the directors announced 
their intention to commence a share repurchase 
programme during 2013 for the repurchase  
of up to 6 million shares for the purpose of 
offsetting the dilutive impact of employee  
share schemes
in accordance with that announcement and the 
authority granted at the agm in 2013 market 
purchases of 6 million of the company’s 
ordinary shares were made during 2013 at a 
total cost of £278705370 including stamp 
duty the authority granted at the agm in 
2013 remains valid until the conclusion of this 
year’s agm on 7 may 2014 and the directors 
will seek to renew the authority to make 
market purchases through a resolution to be 
put to shareholders at this year’s agm this 
authority will be limited to a maximum of  
73 million ordinary shares and sets the 
minimum and maximum prices which may be 
paid the company’s intention would be to 
hold shares acquired under such authority in 
treasury to satisfy outstanding awards under 
employee share incentive plans
annual general meeting
the notice convening the seventh agm of the 
company to be held on wednesday 7 may 
2014 at 1115 am at the london heathrow 
marriott hotel bath road hayes middlesex 
ub3 5an is contained in a separate document 
for shareholders 
in accordance with the shareholder rights’ 
directive directive which came into force  
in august 2009 the company obtained 
shareholder approval at the agm in 2013  
to call meetings other than annual general 
meetings on 14 clear days’ notice prior to the 
implementation of the directive the company 
was able to call meetings other than an agm 
on 14 clear days’ notice without obtaining 
shareholder approval and to preserve this 
ability shareholders will be asked to renew 
their approval by passing resolution 20 at  
the agm 
although article 78 governs the retirement  
of directors by rotation the board has agreed 
that all the directors will submit themselves for 
reelectionelection at this year’s agm and at 
future agms in compliance with the code
by order of the board
elizabeth richardson 
company secretary 
reckitt benckiser group plc 
103105 bath road  
slough berkshire sl1 3uh 
company registration number 6270876
7 march 2014
shares of 10p each with voting rights and 
16732850 ordinary shares of 10p each held  
in treasury details of changes to the ordinary 
shares issued and of options and awards 
granted during the year are set out in note 22 
to the financial statements
the rights and obligations attaching to the 
company’s ordinary shares are set out in  
the articles 
there are no restrictions on the voting rights 
attaching to the company’s ordinary shares or 
the transfer of securities in the company 
except in the case of transfers of securities
•	 	 that	certain	r estrictions	may	fr om	time	to	
time be imposed by laws and regulations  
for example insider trading laws and
•	 	 pursuant	to	the	listing	rules	of	the	united	
kingdom listing authority whereby certain 
employees of the company require the 
approval of the company to deal in the 
company’s ordinary shares
no person holds securities in the company 
which carry special voting rights with regard to 
control of the company the company is not 
aware of any agreements between holders of 
securities that may result in restrictions on the 
transfer of securities or on voting rights
allotment of shares
the directors were granted authority at the  
last agm held in 2013 to allot shares up to  
a nominal amount of £21m that authority  
will apply until the conclusion of this year’s 
agm at this year’s agm on 7 may 2014 
shareholders will be asked to grant an authority 
to make such allotments up to a nominal 
amount representing approximately onethird 
of the company’s issued share capital as at the 
latest practicable date prior to the publication 
of the notice of agm the authority sought 
would if granted expire at the earlier of 30 
june 2015 or at the conclusion of the agm of 
the company held in 2015 excluding richard 
cousins who will retire at the 2014 agm the 
board has confirmed that in accordance with 
the uk corporate governance code code  
all other directors will submit themselves for 
reelectionelection at this year’s agm and at 
future agms
a special resolution will also be proposed to 
renew the directors’ power to make nonpre
emptive issues for cash up to a nominal amount 
representing less than 5 of the company’s 
issued share capital as at the latest practicable 
date prior to the publication of the notice  
of agm 
the board is responsible for the management 
of the business of the company and may 
exercise all the powers of the company subject 
to the provisions of the company’s articles 
the articles contain specific provisions and 
restrictions regarding the company’s power to 
borrow money powers relating to the alteration 
of share capital are also included in the articles 
and shareholders are asked to renew such 
authorities each year at the agm a copy of 
the articles is available from the corporate 
website wwwrbcom or on written request 
from the company secretary or from the uk 
registrar of companies
unless expressly specified to the contrary in  
the articles the company’s articles may be 
amended by a special resolution of the 
company’s shareholders
there are a number of agreements that  
take effect alter or terminate upon a change  
of control of the company following a 
takeover such as commercial contracts bank 
agreements property lease arrangements and 
employee share plans none of these are 
deemed to be significant in terms of their 
potential impact on the business of the group 
as a whole 
there are no significant agreements between 
the company and its directors or employees 
providing for compensation for loss of office or 
employment that occurs because of a takeover 
bid except that provisions of the company’s 
share plans may cause options and awards 
granted under such plans to vest on a takeover
there is no information that the company 
would be required to disclose about persons 
with whom it has contractual or other 
arrangements which are essential to the 
business of the company
corporate governance statement
in compliance with the disclosure and 
transparency rules dtr 721 the disclosures 
required by dtr 722 to 727 are set out  
in this report of the directors and in the 
corporate governance report on pages 26  
to 32 which together with the statement of 
directors’ responsibilities are incorporated by 
reference into this report of the directors
independent auditors
the auditors pricewaterhousecoopers llp  
have indicated their willingness to continue  
in office and a resolution that they be 
reappointed will be proposed at the agm
share capital
as at 31 december 2013 the company’s issued 
share capital consisted of 719802329 ordinary 
substantial shareholdings 
as at 4 march 2014 the company had received the following notices of substantial interests  
3 or more in the total voting rights of the company
   no of
   of total  ordinary nature of 
  voting rights shares holding
jab holdings bv 1065 76659342 indirect
massachusetts financial services company andor its subsidiaries 577 41561763 indirect
invesco limited 406 29255679 indirect rb annual report 2013 23
governance  remuneration   report of the directors 
table 1 – interests in the share capital of the company
the directors in office at the end of the year and those in office at 7 march 2014 had the following beneficial interests unless stated otherwise in the 
ordinary shares of the company 
      7 march 2014 31 december 2013 31 december 2012
adrian bellamy       22813  22813  21966
richard cousins       2429  2429  2262
nicandro durante appointed 1 december 2013     0  0  na
peter harf       4109  4109  3806
adrian hennah appointed 12 february 2013      13629  13629  na
kenneth hydon       5510  5510  5337
rakesh kapoor       317537  317537  281869
andré lacroix       2253  2253  2086
judith sprieser       3809  3809  3631
warren tucker       1694  1694  1527
      
notes
1  no person who was a director or a director’s connected person on 31 december 2013 and at 7 march 2014 had any notifiable share interests in 
any subsidiary
2 the company’s register of directors’ interests which is open to inspection contains full details of directors’ shareholdings and options to subscribe 24 rb annual report 2013
governance  remuneration   chairman’s statement on corporate governance
together with the terms of reference for the 
board committees were reviewed and updated 
so that they continue to reflect the spirit and 
emphasis of the code remain fit for purpose 
and relevant to how rb operates 
board evaluation 
the code recommends that ftse 350 
companies should undertake an external 
evaluation at least once every three years  
the 2009 to 2012 board evaluations were all 
undertaken internally the recent evaluation for 
the year ended 2013 was externally facilitated 
by egon zehnder limited the summary 
outcome applauded the company’s focus on 
shareholder value and the quality of the board’s 
decision making it recognised the board’s 
efficiency and focus but noted certain 
improvement opportunities on governance  
and board succession matters the 
recommendations to move the board’s 
performance from good to great are further 
discussed in the performance evaluation section 
on page 28 of this report
succession planning
succession planning to the board and senior 
management roles remains one of the key  
areas to which the board gives due attention 
progress continues to be made in this area and 
part of that progress is to ensure diversity in 
succession planning and to give members of 
rb’s senior management more exposure to the 
board and externally additional information  
on rb’s succession planning activities at senior 
management levels is within ‘resources’ on 
pages 11 to 12 of the strategic report our 
disclosure includes the new companies act 
2006 requirement to report specifically on the 
gender split for the board senior managers and 
total employee numbers 
annual reelections
all the directors submitted themselves for 
reelection at the 2013 agm and excluding 
richard cousins who is retiring after the agm 
will submit themselves for reelection at the 
2014 agm and at future agms in compliance 
with the code
diversity
the company operates within a corporate 
diversity and inclusion policy framework 
adopted and reviewed by the executive 
committee the davies recommendation for 
boards to have a minimum of 25 female 
representation by 2015 is an aspiration the 
company considers carefully as part of its 
recruitment exercises 
the board reiterates its view that facilitating 
and promoting diversity in its broadest sense 
has helped propel the company’s success to 
date it remains its practice to ensure that the 
company’s top40 executive roles in particular 
the uk corporate governance code code 
issued by the financial reporting council 
frc in september 2012 was applicable to 
the company throughout the financial year 
ended 31 december 2013 
the frc confirmed that the recent changes  
to the code together with changes to the uk 
stewardship code are intended to increase 
director accountability and encourage greater 
stakeholder engagement whilst promoting the 
interest of shareholders through the reports 
on the work of the board and its committees 
the changes provide investors with greater 
insight into the activities of listed companies 
the board takes seriously its responsibility for 
effective corporate governance and delivery of 
longterm shareholder and stakeholder reward 
and its decisions are taken in light of these 
considerations i am pleased to report to you 
directly on rb’s governance activities
rb and governance
the board believes that implementing and 
maintaining high governance standards 
underpin our business objectives and our drive 
to create and maximise shareholder value whilst 
managing the business effectively responsibly 
and with integrity so that we demonstrate 
accountability and maintain the trust of all our 
stakeholders in addition to compliance with 
the best practice advice from regulatory and 
governance bodies the board ensures that  
high ethical standards are reflected in business 
behaviour and culture through rb’s global code 
of conduct which enables management to add 
ethical and behavioural standards to the legal 
and regulatory obligations existing in the areas 
and communities in which we operate all 
employees and contractors are required to 
complete an annual conduct training course 
which includes the review of the global code  
of conduct statistics on employee compliance 
are subject to review by the audit committee  
the company also operates an active 
whistleblowing hotline the reports from which 
are reviewed by the audit committee
we are constantly seeking to develop our 
practices and governance framework to ensure 
that transparency and good governance 
permeate through the group at all levels our 
professional employees are annually required  
to confirm compliance with corporate policies 
and are encouraged to suggest improvements 
this ensures we maintain a dynamic process  
of enhancement which enables our operating 
businesses and group functions to operate with 
an appropriate awareness and recognition of 
their governance and regulatory obligations 
composition of the board
the current and future composition of the 
board remains an issue to which i and the rest 
of the board give our full attention we remain 
mindful of the recommendations of the code 
on length of service and diversity and it is our 
aim to comply with these recommendations 
without compromising the culture that drives 
the success of our business unfortunately our 
senior independent director graham mackay 
had to retire from the board in june 2013 for 
health reasons and sadly passed away on  
18 december 2013 graham brought 
exceptional talents to the board’s activities and 
he will be missed the board on behalf of the 
company and its shareholders is grateful for 
graham‘s significant contributions over the  
past eight years and sends condolences and 
best wishes to his family we have sought to 
strengthen the board with the appointment of 
nicandro durante who brings experience of a 
highly regulated and innovationled industry 
alongside extensive emerging markets’ 
experience having worked in asia africa and 
latin america he adds further international 
diversity to the board we continue to seek to 
recruit additional nonexecutive directors who 
will bring a diverse range of skills experience 
and perspectives to the board’s activities  
we announced at the end of december 2013 
that richard cousins will not offer himself for 
reelection at the 2014 agm and will stand 
down at the close of business of the 2014 
agm after having served as a nonexecutive 
director since october 2009 
the board includes peter harf who as a 
shareholdernominated director was not 
independent on appointment both peter  
and i have served on the board since 1999 in 
addition judith sprieser and kenneth hydon 
have now been on the board for a period 
exceeding ten years the board remains keen to 
ensure compliance with the recommendations 
of the code but recognises that both kenneth 
and judith have been diligent servants of the 
company who continue to add value to the 
activities of the company as a whole to ensure 
continuity and a successful transition the board 
recommends that judith and kenneth be 
reappointed to the board at the 2014 agm  
in recognition of their length of service both 
judith and kenneth will step down as chairs  
of the remuneration and audit committees 
respectively before the end of the year upon 
completion of this year’s exercise to refresh the 
composition of the board
to ensure that the board is able collectively to 
increase its focus on board composition the 
membership of the nomination committee was 
increased in november 2013 to include all the 
nonexecutive directors and the ceo as part 
of the review of the board’s effectiveness the 
documents setting out the matters reserved for 
the board and the delegations to the ceo 
chairman’s statement on  
corporate governance rb annual report 2013 25
governance  remuneration   chairman’s statement on corporate governance 
are open to fresh thinking and must include 
personnel from different global backgrounds 
who bring new ideas to the table the 
company values its freedom to retain a  
group of people who collectively have the 
skills experience and insight to implement  
the company’s global vision and objectives  
and achieve longterm value growth without 
being hindered by a gender quota which  
does not take cognisance of the specific 
situation and culture of the company as  
at 31 december 2013 
•	 	 10	 2012	 10	 of	 the	 boar d	 is	 female	 and	
50 2012 50 are nonuk nationals 
•	 	 11	2012	11	of	the	executive	
committee is female and 78 2012 78 
are nonuk nationals and
•	 	 14	2012	15	of	the	t op40	managers	
are female and 66 2012 70 are 
nonuk nationals 
all rb employees understand their personal 
responsibility for ensuring that diversity policies 
and programmes are actively pursued 
implemented and maintained the company 
does not set specific targets in absolute 
percentage terms to deter artificiality in the 
process it measures progress year on year to 
ensure an improving picture on gender balance 
which it believes contributes to the company’s 
growth and success as at 31 december 2013 
•	 	 42	2012	41	of	the	gr oup’ s	
professional population of 7079 is female 
and
•	 	 17	2012	16	of	the	gr oup’ s	t op400	
population is female
gender balance has improved consistently 
across the professional population 
14 49 and 95 2012 16 44 and 94 
nationalities are represented in the top40 
top400 and professional populations 
respectively 
risk management and appetite
the board monitors the level of risk through 
the group’s major risk assessment process  
we remain committed to building on and 
improving our understanding of the key risks 
facing the group and its business operations 
and we constantly refine our appetite and 
tolerance of such risks 
explanation on areas of noncompliance 
with the code strict interpretation
the board recognises that the objective of the 
code is to facilitate management’s delivery  
of business success in a transparent and 
responsible manner the code does not impose 
a rigid set of rules and recognises that certain 
actions and behaviours do not automatically 
imply poor organisational governance the 
board has authorised an explanation for the 
following areas where a strict interpretation 
might lead to a perception of noncompliance 
with certain areas of the code 
•	 	 i	as	the	chairman	and	peter	harf	the	
deputy chairman and a shareholder
nominated director have both served on  
the board since 1999 and will be offering 
ourselves for reelection at the 2014 agm 
•	 	 kenneth	hydon	and	judith	sprieser	have	
now each been on the board for over ten 
years the company continues to benefit 
from the skills and experience they bring  
to their roles and with continuity in mind 
judith and kenneth have agreed to stand  
for reelection at the agm for a further year 
before stepping down at the agm in may 
2015 by which time they would have served 
on the board for 11 years judith and 
kenneth will step down as chairs of their 
respective committees by the end of the  
year following the outcome of the ongoing 
refresh of the board’s composition 
recognising that it is important that the 
board retains relevant knowledge and 
experience to continue its delivery of 
shareholder value and provide continuity  
and consistency in the development and 
application of the company’s strategic 
objectives the board will continue its efforts 
to refresh the membership of the board in 
the shortterm
•	 	 following	the	r etir ement	of	graham	mackay	
from the board in june 2013 for the period 
from june 2013 until the date of this report 
the remuneration committee was not 
composed of a majority of independent 
nonexecutive directors for the same 
reason the nomination committee was not 
composed of a majority of independent 
nonexecutive directors from june 2013 until 
november 2013 when the board resolved  
to change the terms of reference on 
membership of the nomination committee 
to include all nonexecutive directors and
•	 	 judith	sprieser 	in	her	capacity	as	chair	 
of the remuneration committee was 
unfortunately absent from the 2013 agm 
held on 2 may 2013
the board has instructed me to confirm that 
notwithstanding the foregoing disclosures and 
following the externally facilitated performance 
evaluation undertaken during 2013 each 
director’s independence of thought and actions 
was assured and all decisions were taken to 
promote the success of rb as a whole 
statement of compliance with the code
the corporate governance report on pages  
26 to 32 contains a summary of the company’s 
governance arrangements and the regulatory 
assurances required under the code except as 
explained above the company has complied 
with the code throughout the year ended  
31 december 2013 
adrian bellamy  
chairman
7 march 2014 26 rb annual report 2013
governance  remuneration   corporate governance report
rb at any time on or after 28 july 2009 
benefits from a deed poll of indemnity in 
respect of the costs of defending claims  
against him or her and third party liabilities 
additionally directors’ and officers’ liability 
insurance cover was maintained throughout  
the year at the company’s expense 
a2 division of responsibilities 
there is a clear division of responsibilities 
between the chairman and the ceo  
the chairman is responsible for the overall 
operation leadership and governance of  
the board 
the ceo is responsible for the executive 
management of rb’s business consistent with 
the strategy and commercial objectives agreed 
by the board the ceo chairs the executive 
committee and together with the cfo certain 
group functional heads and area evps he 
appoints to the committee provides the 
daytoday management of the company 
biographical details of the members of the 
executive committee are set out on page 20 
the matters delegated to the ceo by the  
board include
•	 	 power	to	delegate	the	daytoday	
management of the business of the 
company to each of the officers of the 
executive committee acting individually  
or as a group or subcommittee
•	 	 power	to	acquir e	and	dispose	of	businesses	
and to approve unbudgeted capital 
expenditure projects subject in each case  
to a £50m limit and
•	 	 t r easury	policies	and	risk	management	
policies
•	 	 significant	changes	to	borr owing	facilities	or	
foreign currency transactions and
•	 	 review	and	appr oval	of	r ecommendations	
from the committees of the board 
the annual review of this schedule was 
undertaken in november 2013 as part of the 
performance evaluations conducted for the 
2013 financial year 
the principal activities undertaken by the board 
are set out in the strategic report on pages 3 
to 17
meetings 
board meetings are structured to allow open 
discussion the board meets a minimum of  
five times a year and constitutes additional 
meetings including by telephone or written 
resolution to consider specific matters which  
it has reserved to itself for decision 
in 2013 there were five regular board meetings 
plus two additional meetings there were four 
audit committee meetings four remuneration 
committee meetings plus one additional 
meeting and one nomination committee 
meeting the table below sets out the 
attendance by individual directors at scheduled 
board and committee meetings
directors’ insurance and indemnities
the directors benefit from the indemnity 
provision in the company’s articles of 
association each individual who is an officer 
of the company andor of any company within 
report of the board
the company enjoys a premium listing  
on the london stock exchange and is 
therefore required to produce a corporate 
governance statement containing the 
information set out in this report this 
report is prepared with reference to the 
financial reporting council’s uk corporate 
governance code code in effect for the 
financial periods beginning on or after  
1 october 2012 this report sets out how the 
company has applied the main principles of the 
code throughout the year ended 31 december 
2013 and as at the date of this report
a leadership
a1 the role of the board 
the board leads and controls rb’s business  
with a board structure similar to that of its 
principal international competitors the board 
approves strategy carries out an advisory  
and supervisory role and accepts ultimate 
responsibility for the conduct of rb’s business 
the schedule of matters reserved for the 
board’s decision includes
•	 	 t akeover	of fers	and	the	r esponse	to	any	
takeover approach
•	 	 significant	acquisitions	disposals	and	capital	
expenditure projects
•	 	 final	appr oval	of	annual	budgets	and	
corporate plans
•	 	 appr oval	of	financial	statements	and	
shareholder communications
number of scheduled meetings attended during 2013 
   note  board  audit  remuneration  nomination
adrian bellamy     5    4  1
richard cousins     5    4
nicandro durante   a  na      na
peter harf   b  4      1
adrian hennah     4      
kenneth hydon     5  4    1
rakesh kapoor     5      1
andré lacroix     5  4    1
graham mackay   c  1    1  
judith sprieser   b  4    4  1
warren tucker     5  4
notes
a there were no scheduled board meetings in 2013 subsequent to the appointment of nicandro durante 
b peter harf and judith sprieser were unavoidably absent from one meeting each
c graham mackay did not attend any meeting after february 2013 and formally retired from the board due to ill health on 12 june 2013
d liz doherty retired from the board on 12 february 2013 and did not attend the scheduled board meeting on the same date
corporate governance report rb annual report 2013 27
governance  remuneration   corporate governance report 
•	 	 power	to	instruct	advisers	and	to	instigate	
legal proceedings on behalf of the company 
in respect of matters for which no further 
board authority is required
a3 the chairman
the chairman who was independent on 
appointment is responsible for leading the 
board and enabling the directors to operate 
effectively as one unit to determine the 
strategy risk appetite and governance structure 
necessary to deliver shareholder value in a 
transparent and responsible manner his 
responsibilities include
•	 	 chairing	and	ensuring	that	boar d	meetings	
provide a forum that encourages open 
debate and effective contributions from 
individual directors with sufficient time 
allocated to key issues 
•	 	 developing	an	ef fective	working	r elationship	
with the ceo whilst recognising the need  
to maintain the balance between critical 
friendship and executive responsibility
•	 	 finalising	the	boar d	meeting	agenda	
developed by the ceo and the company 
secretary
•	 	 sponsoring	and	pr omoting	gover nance	and	
ethical practices
•	 	 encouraging	dialogue	between	the	 
company and its shareholders and other 
stakeholders and facilitating the board’s 
understanding of shareholders’ and other 
stakeholders’ concerns
•	 	 overseeing	the	induction	information	and	
support provisions for directors and
•	 	 leading	the	annual	performance	evaluation	
of the board and its committees
a4 nonexecutive directors
the nonexecutive directors are independent  
of management and therefore able to provide 
critical input into board decisions through their 
contributions to board discussions and their 
roles on and chairmanship of board 
committees they
•	 	 contribute	inter national	and	operational	
experience and a knowledge and 
understanding of global financial issues the 
sectors in which rb operates and the health 
and safety environmental and community 
challenges it faces
•	 	 monitor	management	performance	against	
strategy and provide reasoned input and 
constructive challenge to ensure objectives 
are met and
•	 	 assess	and	monitor	the	integrity	of	financial	
information and the systems of risk 
management and internal control
the chairman holds a session with other 
nonexecutive directors at the conclusion  
of each formal board meeting without the 
executive directors present
the senior independent director sid  
provides a sounding board for the chairman 
and is available to the other directors and 
shareholders who have concerns that cannot 
be addressed through the chairman ceo  
or cfo
b effectiveness
b1 board composition 
the board comprises the chairman adrian 
bellamy seven nonexecutive directors and two 
executive directors rakesh kapoor ceo and  
liz doherty cfo until 12 february 2013 and 
adrian hennah cfo from 12 february 2013 
information regarding the directors serving at 
the date of this report is set out on page 20 
additional biographical details are available 
from the company’s website
the board identified graham mackay as the sid 
until his retirement in june 2013 when andré 
lacroix succeeded graham as sid the board 
has determined that the majority of non
executive directors excluding the chairman 
are independent as recommended by the code 
the board deemed judith sprieser and kenneth 
hydon as independent notwithstanding that 
they have served over ten years the chairman 
adrian bellamy was independent on 
appointment peter harf the deputy chairman 
is not independent by virtue of being a 
shareholdernominated director the 
shareholder agreement between the company 
and jab holdings bv jab at the time of the 
merger in 1999 entitled jab to nominate board 
directors a holding in excess of 20 or 10 
of the company’s ordinary shares entitles jab  
to nominate two directors or one director 
respectively jab’s current holding is slightly  
in excess of 10 the company announced  
in december 2013 that richard cousins 
nonexecutive director will not offer himself  
for reelection at the 2014 agm
b2 nomination committee and 
board appointments 
nomination committee
until november 2013 the nomination 
committee comprised the chairman who also 
chairs the committee the ceo the deputy 
chairman the sid and the chairs of both  
the audit and remuneration committees 
following its meeting in november 2013  
the board agreed that the composition of the 
nomination committee would be increased  
to include all nonexecutive directors plus the 
ceo the board has delegated authority to the 
committee through its terms of reference a 
copy of which is available on the company’s 
website the primary focus of the committee  
is to make recommendations on
•	 	 the	composition	and	performance	of	the	
board and its committees
•	 	 appointments	and	r eelections	to	the	boar d	
and its committees and
•	 	 succession	plans	for	the	chairman	and	other	
directors
the principal activities of the nomination 
committee during the year were 
•	 	 consideration	of	the	curr ent	and	futur e	
composition of the board and
•	 	 t ogether	with	the	r est	of	the	boar d	the	
appointment of nicandro durante as an 
additional nonexecutive director on  
1 december 2013
board appointments
the process leading up to the appointment  
of nicandro durante commenced with the 
appointment of egon zehnder limited egon 
zehnder who worked with the chairman and 
the board to put together a profile based on 
the board’s consensus of the key attributes 
required in addition the outcomes from the 
interviews undertaken as part of the externally 
facilitated board performance evaluation fed 
into this process to ensure that there was good 
alignment from the board on the profile for 
candidates the board received the cvs of 
approximately ten potential candidates who 
had been short listed following an initial review 
by the chairman and members of the 
nomination committee following feedback 
and recommendations from individual board 
members the chairman met with the 
recommended candidates the deputy 
chairman the ceo the sid and the group 
general counsel also met with nicandro who 
indicated a willingness to accept an offer 
following his own due diligence process the 
board approved the appointment of nicandro 
and delegated authority to the chairman to 
finalise terms and dates
the board reviews the medium and longterm 
succession plans for the executive directors 
annually all nonexecutive directors are kept 
involved in the recruitment process for both 
executive and nonexecutive directors
diversity and business success
the board is confident that diversity contributes 
to the success of any business it enables the 
business to better understand its opportunities 
and risks and to develop robust solutions to 
them the board believes and acts on the  
basis that
•	 	 diversity	is	much	br oader	than	gender	and	
should also not be a board only issue it 
incorporates diversity of race thought 
experience skills understanding perspective 
and age and also requires implementation  
at all management levels 
•	 	 successful	companies	sell	their	goods	and	
services to customers regardless of gender 
race ethnic group or religion and a diverse 
workforce should reflect its customers  
a diverse management is more in touch  
with its customers’ demands investors’ 
expectations and employees’ concerns and 
provides a forum for these different 
report of the nomination committee 28 rb annual report 2013
governance  remuneration   corporate governance report
b6 evaluation 
performance evaluation 
the board maintains an ongoing review of its 
procedures and its effectiveness and those of  
its committees throughout the year from 2009 
to 2012 it carried out a formal and rigorous 
internal evaluation of its committees and of 
individual directors with a view to improving 
the effectiveness of the board and its 
committees and rb’s overall performance  
the evaluation of the board’s performance 
during 2013 was undertaken with support  
from an external facilitator 
2013 evaluation egon zehnder was retained 
to facilitate the 2013 board performance 
evaluation its remit included a focus on board 
performance measured primarily by the growth 
of shareholder value with due cognisance given 
to the board’s focus on the business and its 
strategy particular attention was also given  
to personnel issues and the special and critical 
culture of the company egon zehnder received 
details of the 2011 and 2012 board 
performance evaluations and presented at the 
july and november board meetings 
egon zehnder met with individual directors 
using a precirculated twopage discussion 
guide which enabled them to reflect and  
gather their thoughts ahead of the meeting  
they also met with the company secretary and  
the group general counsel who attend all 
board meetings
the individual discussion covered the strategic 
alignment and the impact of the company’s 
restated vision on board composition and 
future structure other areas in scope included 
board meetings and dynamics reporting to 
shareholders governance and board processes 
business performance information flows risk 
and people related issues two areas of specific 
focus used as case studies of the board’s 
decisionmaking were the refocus of the 
strategic direction of the company into health 
hygiene and home and the acquisitions 
undertaken during 20122013 the key 
objective was to ensure that the board focuses 
on how it adds value to the business and 
captures the learning for future decision
making key recommendations which the 
board will progress include
•	 	 boar d	composition	the	boar d	should	
continue to seek to bolster its numbers  
with up to three additional nonexecutive 
directors
the chairman has overall responsibility  
for ensuring that the directors receive the 
information and training required for their 
roles directors are encouraged to take 
individual responsibility for identifying their 
needs and are expected to take the necessary 
steps to ensure that they are adequately 
informed about rb and their responsibilities  
as directors the board is confident that all  
its members have the knowledge ability and 
experience to perform the functions required  
of a director of a listed company
the company was subject to an fsa now fca 
enquiry during 2012 which is still ongoing as at 
the date of this annual report this related to 
an inadvertent breach of the listing rules and 
the disclosure and transparency rules relating 
to a pledge now redeemed over shares held 
by the ceo acquired when he was an 
executive committee member prior to his 
appointment as ceo and a disposal of 
company shares by a person discharging 
managerial responsibilities without the 
appropriate disclosures being made 
b5 information and support 
all members of the board receive timely reports 
on items arising at meetings of the board to 
enable due consideration of the items in 
advance of meetings directors unable to 
attend a particular meeting during the year had 
the opportunity to review and raise any issues 
on the relevant briefing papers board members 
also have access to a dedicated online team 
room containing relevant company information 
including all board and committee papers 
each director has access to the advice and 
services of the company secretary and a 
procedure exists for directors to take 
independent professional advice at the 
company’s expense in furtherance of  
their duties 
company secretary
the company secretary ensures that the 
company complies with all applicable rules 
regulations and obligations governing the 
company’s operations and is responsible for 
ensuring that the correct board procedures are 
followed she advises the board on corporate 
governance matters all directors have access 
to the company secretary her appointment 
and removal are matters reserved to the board
b3 commitment 
all new nonexecutive directors confirm in 
writing that they are able to allocate sufficient 
time to meet the expectations of the role the 
board has adopted a letter of appointment that 
contains the terms on which nonexecutive 
directors will be appointed including
•	 	 confirmation	that	the	appointment	is	a	
contract for services and details of any 
committee appointments
•	 	 confirmation	of	the	initial	appointment	term	
of three years terminable on one month’s 
written notice and the expectation that the 
appointment will usually last for more than 
one term and
•	 	 the	r equir ement	to	seek	the	agr eement	of	
the chairman before accepting additional 
commitments including other directorships 
and the requirement to disclose any actual  
or potential conflicts of interest
the terms of reference of the nomination 
committee give the committee responsibility 
for ensuring that executive directors do not 
take on more than one nonexecutive 
directorship in a ftse 100 company nor the 
chairmanship of such company 
the externally facilitated evaluation of the 
board’s performance undertaken in 2013 
concluded that the chairman and other 
nonexecutive directors devote sufficient  
time to the company’s business 
b4 development 
induction and training
all new directors are provided with a flexible 
induction programme tailored to accommodate 
individual areas of interest the induction 
covers the provision of core companyrelated 
internal and external documents meetings with 
directors and key senior executives and visits to 
various offices and factories as appropriate
the board holds at least one meeting each year 
at one of the company’s operating units the 
2012 meeting was held in brazil and the 2013 
meeting was held in china the board plans to 
visit its operating unit in salt lake city usa 
during 2014 the board receives updates on 
legal regulatory and governance matters from 
its internal and external advisers as part of  
its investor relations programme the board 
received a detailed presentation on and review 
of the company’s investor relations activities at 
its november meeting 
perspectives to come together in devising 
successful business strategies and
•	 	 diversity	is	a	matter	of	organisational	cultur e	
largely set by example from the top a board 
that actively considers diversity is better able 
to support diversity efforts in the rest of the 
organisation and is equipped to identify the 
organisation’s requirements
as part of the recruitment drive egon zehnder 
was given a specific remit to ensure that more 
female and international candidates were put 
forward for consideration and the committee 
together with the full board considered and 
discussed the cvs of potential candidates at 
their november meetings the chairman and 
the committee are continuing the search to 
refresh the composition of the board with 
highcalibre candidates who will complement 
the group’s strengths and contribute to its 
diversity and business success 
directors’ conflicts of interest
the nomination committee is responsible for 
the company’s procedures for dealing with 
directors’ conflicts of interest and these 
procedures have operated effectively during  
the year a register of directors’ conflicts is 
maintained by the company secretary and 
reviewed by the board at least annually the 
board is aware of the other commitments  
of its directors and any changes to these 
commitments are reported to the board
report of the nomination committee continued rb annual report 2013 29
governance  remuneration   corporate governance report 
the board is satisfied that the financial 
statements report to regulators and price
sensitive reports present a fair balanced and 
understandable assessment of rb’s position  
and prospects 
to assist with financial reporting and the 
preparation of consolidated financial 
statements the finance function has in place  
a series of accounting and treasury policies 
practices and controls which are designed to 
ensure the identification and communication  
of changes in accounting standards and 
reconciliation of core financial systems the 
function consists of consolidation and financial 
accounting teams and technical support which 
comprises senior finance managers who review 
external technical developments and 
accounting policy issues in addition the 
finance function maintains an uptodate 
group finance policy manual and sets formal 
requirements with operating unit finance 
functions which specify the standard reports 
and approvals required by rb
throughout the year rb has had in place an 
ongoing process for evaluating the financial 
reporting process and the preparation of 
consolidated accounts the basis for the 
preparation of consolidated accounts is as set 
out on page 54 under accounting policies 
the board agrees an engagement letter with 
the auditors in respect of the full and halfyear 
results and the auditors’ statement on their 
work and reporting responsibilities is set out  
on pages 47 to 49
information on rb’s business model and 
strategy for generating and preserving 
longerterm growth and delivering on the 
company’s stated objectives is set out in the 
strategic report on pages 9 to 11 
the statement of directors’ responsibilities on 
page 33 details the directors’ responsibility for 
the financial statements for disclosing relevant 
audit information to the auditors and for 
ensuring that the annual report is fair 
balanced and understandable an extra step 
involving an additional review of the draft 
annual report and a teleconference of the 
board was added to the approval process so 
that the full board acting together could 
confirm that the annual report was fair 
balanced and understandable
the going concern statement required by the 
listing rules and the code is set out in the 
statement of directors’ responsibilities on  
page 33
c2 risk management and internal 
control 
the board has established a risk and control 
structure designed to manage the achievement 
of business objectives it has overall 
responsibility for rb’s system of internal control 
and for the effectiveness of such system  
the system complies with the turnbull guidance 
on internal control and risk management  
and provides reasonable but not absolute 
assurance against material misstatement  
or loss
ensure that board information was succinct 
and essential
•	 offsite board meeting the objective was 
to help the board make the most of the 
meeting and use it as an opportunity to meet 
top400 executives in less formal settings  
the offsite meeting in china during 2013 
took place over four days twice the normal 
time previously allocated for such meetings 
this afforded the board an opportunity to 
immerse itself in the china business future 
offsite meetings will follow this more 
detailed programme 
•	 	 people and succession the objective  
was to deliver an increased exposure of the 
top400 to the nonexecutive directors in 
addition to meeting the managers of the 
chinese business the board received 
presentations from the other members of  
the executive committee top40 and top400 
executives during the year 
these outcomes and actions fed into the 
externally facilitated evaluation carried out in 
2013 and will continue to aid benchmarking 
and the measurement of progress in the 
coming years
the 2013 evaluations of the board committees 
were undertaken with the use of detailed 
internally generated questionnaires which 
included a section for additional comments 
the scores and additional comments were 
collated for subsequent discussions 
the evaluation of the chairman’s performance 
was undertaken by the sid with input from his 
fellow nonexecutive directors the ceo and 
the cfo the chairman evaluates each 
director’s performance through onetoone 
discussions with other directors the 
remuneration committee also reviews the 
performance of the executive directors and 
other members of the executive committee 
b7 directors’ reelection
in accordance with code recommendations  
all the directors will submit themselves for 
reelectionelection at the 2014 agm 
excluding richard cousins who will not stand 
for reelection at the 2014 agm each director 
has provided assurance that he or she remains 
committed to his or her role and can dedicate 
the necessary amount of time to attend to the 
company’s business in addition the 
performance evaluation undertaken was 
rigorous and transparent to establish that each 
director remains able to undertake his or her 
duties consequently the board recommends 
that all shareholders vote ‘for’ on each of the 
resolutions to reelectelect the directors at  
the 2014 agm the date each director was 
originally appointed to the board is included  
in the biographical details on page 20
c accountability
c1 financial and business reporting 
the board is responsible for the integrity of  
rb’s consolidated and the company’s financial 
statements and recognises its responsibility to 
present a fair balanced and understandable 
assessment of rb’s position and prospects  
•	 	 chairman	succession	the	nomination	
committee should commence the planning 
process to identify a successor for the 
chairman’s role
•	 	 interaction	with	executive	dir ectors	the	
executive directors were encouraged to share 
their thoughts and plans at an earlier stage 
to encourage debate
•	 	 pr oject	specific	updates	an	incr ease	in	the	
regularity of updates to the board on the 
projects it oversees was recommended
•	 	 appr oach	on	r emuneration	the	
remuneration committee was encouraged 
to discuss the impact of policy and regulatory 
issues with the board to promote board 
alignment on relevant issues and
•	 	 review	of	decisions	noting	that	it	operated	
good postacquisition reviews the board  
was encouraged also to review other key 
decisions on a regular basis
egon zehnder also provides consultancy 
services to the board’s recruitment activities 
the board recognised the benefit of using  
egon zehnder for its performance evaluation 
on the basis that this would provide a better 
understanding of the board and its dynamics 
which would feed into the candidate  
search process
progress update on items from the 2012 
evaluation the 2012 evaluation was 
undertaken internally in a detailed and rigorous 
manner which started with an email from the 
company secretary to all directors inviting their 
comments on the effectiveness of the board 
the responses from which were used to develop 
a framework for the debate at the evaluation 
meeting key actions from the 2012 board 
performance evaluation and progress made 
since then include
•	 corporate strategy the objective was to 
ensure that the nonexecutive directors 
received relevant information well in advance 
of meetings to facilitate their understanding 
of management’s key strategic focus 
strategic issues are discussed at every 
meeting with management sharing their 
thoughts earlier and this enabled both 
management and the board to take swift 
actions on key opportunities
•	 investor relations the objective was for 
additional clarity on the company’s investor 
relations strategy the board was given a 
presentation on the company’s investor 
relations strategy during the year and in 
november 2013 the company held a 
wellreceived twoday strategy event at 
which the investor community met all the 
members of the executive committee 
gaining an understanding of the depth  
and capability of management and the 
company’s consumer health and emerging 
markets’ strategies
•	 	 advance papers to the board the 
improvement in the quality and timing  
of papers to the board was noted 
management was advised to keep a tight 
rein on the quantity of advance material to  30 rb annual report 2013
governance  remuneration   corporate governance report
•	 	 compliance controls – the group 
maintains a compliance control programme 
that includes an independent and 
anonymous whistleblower reporting system 
systematic reviews by the internal audit 
function annual management reviews and 
personal compliance certification as well as 
specialised training in specific areas and 
functions of the business management 
provides the board with regular updates on 
the compliance controls of the group and 
considers recommendations for continuous 
improvement and
•	 	 monitoring – the effectiveness of the 
system of internal control and risk 
management is monitored regularly through 
a combination of management review 
selfassessment independent review through 
quality assurance environment health  
safety and regulatory audits as well as 
independent internal and external audit the 
results of internal and external audit reviews 
are reported to and considered by the audit 
committee and actions are taken to address 
any significant control matters identified  
the audit committee also approves annual 
internal audit plans and is responsible for 
performing the ongoing review of the system 
of internal control and risk management on 
behalf of the board
the board confirms that reviews of the 
appropriateness and effectiveness of the system 
of internal control and risk management 
throughout the financial year and up to the 
date of approval of the annual report and 
accounts have been satisfactorily completed in 
compliance with provision c21 of the code 
the company is compliant with dtr 726 and 
the information is included in the section on 
takeover directive on pages 21 to 22
and processes are embedded in the 
responsibilities of line managers
•	 	 budgeting – there is an annual planning 
process whereby operating budgets for the 
following financial year are prepared and 
reviewed by the board longterm business 
plans are also prepared and reviewed by the 
board on an annual basis
•	 	 management reporting – there is a 
comprehensive system of management 
reporting the financial performance of 
operating units and rb as a whole are 
monitored against budget on a monthly  
basis and are updated by periodic forecasts 
area and functional executives also perform 
regular strategic reviews with their 
management teams which incorporate an 
assessment of key risks and opportunities
•	 	 risk management – as part of the ongoing 
risk and control process operating units 
review and evaluate risks to the achievement 
of business objectives and the board reviews 
those significant risks which might impact  
on the achievement of corporate objectives 
mitigating controls together with any 
necessary actions are identified and 
implemented a summary of the most 
significant risks faced by rb is included in the 
strategic report on pages 17 to 19 and fuller 
details of rb’s relationships and principal risks 
are set out on pages 93 to 100
•	 	 operating unit controls – each operating 
unit maintains a system of internal control 
and risk management which is appropriate to 
its own business environment such controls 
must be in accordance with group policies 
and include management authorisation 
processes to ensure that all commitments  
on behalf of rb are entered into only after 
appropriate approval in particular there is  
a structured process for the appraisal and 
authorisation of all material capital projects 
the board maintains an ongoing process for 
evaluating the system of internal control and 
identifying and managing risk management  
is required to apply judgement in evaluating  
the material risks rb faces in achieving its 
objectives in determining the risks that are 
considered acceptable to bear in assessing the 
likelihood of the risks concerned materialising 
in identifying rb’s ability to reduce the 
incidence and impact on the business of risks 
that do materialise and in ensuring that the 
costs of operating particular controls are 
proportionate to the benefit
rb’s control environment is supported by a 
code of conduct on which employees receive 
training annually and a range of policies on 
corporate responsibility other key elements 
within the internal control structure are 
summarised as follows
•	 	 the board and management – the board 
approves strategy and performs an advisory 
and supervisory role with the daytoday 
management of the company being 
undertaken by the ceo supported by the 
executive committee the ceo and other 
executive committee members have clearly 
communicated rb’s vision strategy 
operating model values and business 
objectives across the group
•	 	 organisational structure – during the year 
ended 31 december 2013 rb operated 
three area organisations covering ena 
lapac and rumea together with rb 
pharmaceuticals and food and centralised 
functions covering category development 
supply sales finance legal information 
services and human resources as well as  
an independent internal audit function 
throughout the organisation the 
achievement of business objectives and  
the establishment of appropriate risk 
management and internal control systems 
c3 audit committee and auditors 
introduction
in 2013 changes were made to the uk 
governance code we reviewed our terms  
of reference and annual plan in the light of 
these changes particularly with respect to 
shareholder information being fair balanced 
and understandable the production of the 
annual report is a complex task which is 
completed in a relatively compressed timeframe 
so we established a robust process for the 
review and approval of its contents in 
accordance with the new requirements
the committee recognises that independent 
and effective auditors are essential the internal 
audit plan is risk based and the head of 
internal audit has dual reporting lines to the 
cfo and me in 2013 the routine rotation of 
both of pricewaterhousecoopers llp’s pwc 
engagement partners took place and the 
committee conducted a thorough review of 
pwc’s effectiveness and value for money  
the committee is aware of the competition 
commission’s and eu’s recommendations on 
audit tender and rotation and our current 
expectation is that an audit tender process will 
commence no later than 2019
throughout the year the committee focused 
on providing reassurance to the board on the 
integrity of the company’s financial reporting 
internal controls framework and risk 
management processes the committee has 
met with operational business management 
including local management when the board 
visited china
this will be my last report to shareholders and  
i should especially like to thank andré and 
warren for their personal contributions and 
dedication to the work of the committee
kenneth hydon 
chairman of the audit committee 
audit committee
the audit committee comprises three 
independent nonexecutive directors kenneth 
hydon fcma fcca fct chairman since 16 
november 2006 whom the board has deemed 
independent notwithstanding he has served ten 
years on the board andré lacroix diploma 
escp and warren tucker bsc economics  
accounting mba aca kenneth hydon was 
cfo of vodafone group plc until july 2005 and 
is chairman of the audit committees of both 
pearson plc and merlin entertainments plc 
and was in the role at tesco plc until 2013 
warren tucker was cfo of cobham plc until 
may 2013 therefore they both have relevant 
and recent financial experience rb’s auditors 
head of internal audit and cfo attend 
meetings and have regular private meetings 
with and direct access to the committee the 
chairman and ceo attended some of the 
meetings and other senior management attend 
audit committee meetings by invitation 
report of the audit committee rb annual report 2013 31
governance  remuneration   corporate governance report 
the audit committee
•	 	 monitors	the	adequacy	and	ef fectiveness	of	
the system of internal control
•	 	 reviews	compliance	pr ocedur es	and	rb’ s	
overall risk framework including the group’s 
whistleblowing arrangements
•	 	 considers	r eports	on	inter nal	audit’ s	
activities significant legal claims and 
regulatory issues 
•	 	 reviews	the	interim	and	full	year	financial	
statements before submission to the  
full board 
•	 	 makes	r ecommendations	to	the	boar d	
regarding the auditors and their terms  
of appointment
•	 	 reviews	and	monitors	the	auditors’	
independence and services supplied and the 
objectivity and the effectiveness of the audit 
process and
•	 	 considers	operational	risk	and	contr ol	
processes covering assurance providers 
geographical and functional areas 
during 2013 the audit committee 
•	 	 met	four	times	
•	 	 consider ed	detailed	risk	and	contr ol	r eviews	
for selected group major risks covering 
business transformation regulatory 
compliance data privacy business continuity 
planning legal and tax disputes quality 
assurance and bribery
•	 	 reviewed	 local	 country	 and	 r egional	 risks	 and	
control status during the overseas board visit
•	 	 reviewed	 the	 appr oach	 to	 deliver	 an	 upgrade	
to the group’s erp and monitored delivery of 
that programme
•	 	 appr oved	updates	to	the	finance	policy	
manual and the treasury policies
•	 	 monitor ed	whistleblowing	activities	and	
reviewed the policy
•	 	 reviewed	and	updated	the	policy	for	
nonaudit fees to the auditors and 
monitored its application
•	 	 reviewed	the	audit	committee	terms	of	
reference and the annual ‘standing agenda’
•	 	 reviewed	the	work	and	ef fectiveness	of	the	
internal audit function
•	 	 appr oved	the	terms	of	engagement	and	
reviewed the strategy scope and 
effectiveness of the auditors
•	 	 reviewed	and	discussed	with	the	auditors	
the findings of their work during the year
•	 	 received	r egular	technical	updates	to	keep	
abreast of changes in financial reporting and 
governance matters and
•	 	 reviewed	the	performance	of	the	audit	
committee itself and agreed actions for 
dealing with the workload
the audit committee has considered the 
following areas of significant judgement 
complexity or estimation in relation to the 2013 
group financial statements 
•	 	 acquisition accounting – valuation of 
acquired intangible assets  
in may 2013 the group obtained regulatory 
approval for a threeyear collaboration 
agreement with bristolmyers squibb in 
certain parts of latin america the 
committee reviewed papers prepared by 
management addressing the accounting 
treatment applied and the assumptions 
adopted in determining the fair value of 
assets and liabilities acquired including 
goodwill the threeyear collaboration 
agreement intangible asset and the prepaid 
option based on this review the committee 
is comfortable that accounting for the 
transaction as a business combination under 
ifrs 3 revised business combinations is 
appropriate and the assumptions applied  
are reasonable
•	 t ax provisioning  
the group from time to time is involved in 
disputes in relation to ongoing tax matters in 
a number of jurisdictions around the world 
where the approach of the authorities is 
particularly difficult to predict where 
appropriate provisions are made based on 
an assessment of each case the level of 
provisioning for these tax investigations is an 
issue where management and tax judgement 
is important the committee has debated 
with management the key judgements 
made including relevant professional advice 
that may have been received in each case 
and considers the tax provisioning levels to 
be appropriate
in addition the audit committee has 
considered a number of other matters in 
relation to the 2013 group financial 
statements including
•  impairment testing of goodwill and indefinite 
life intangible assets 
management performs an annual 
impairment review for goodwill and other 
intangible assets with indefinite lives 
including the group’s powerbrands this is 
important given the significance of these 
items to the group’s balance sheet key 
judgements include estimates of future 
business performance and cash generation 
discount rates and longterm growth rates 
refer to note 9 of the group financial 
statements for further detail the 
committee has reviewed management’s 
analysis including an assessment of the 
discount rates used the appropriateness  
of specific risk factors applied to individual 
cash generating units and the adequacy  
of sensitivities applied as a result of this 
review the committee is comfortable  
with management’s conclusion that no 
impairment is required and that the indefinite 
life of the group’s powerbrands and various 
other brand intangible assets continues to  
be appropriate
•	 	 legal liability provisioning  
for the year ended 31 december 2013 the 
group has recognised certain exceptional 
legal costs relating to historical regulatory 
investigations by various government 
authorities totalling £225m the level  
of provisioning for these regulatory 
investigations is a matter where management 
and legal judgement is important the 
committee has discussed with management 
the key judgements made including relevant 
legal advice received 
•	 exceptional items 
  the committee has considered the 
presentation of the group financial 
statements and in particular the 
presentation of exceptional items and  
the items included within such measures  
the committee has discussed this with 
management and agrees that the 
presentation provides more meaningful 
information to shareholders about the 
underlying performance of the group
the audit committee notes that trade spend 
was an area of focus for the auditors it is the 
committee’s view that whilst trade spend is a 
significant expense for the group and involves 
an element of judgement management 
operates an appropriate control environment 
which minimises the risks in this area the 
auditor’s risk assessment is made before 
consideration of the control environment in 
addition there have been no significant items 
or issues which have arisen during the year in 
relation to trade spend which would need to  
be brought to the attention of the audit 
committee and as a result the committee 
does not consider that this is a significant issue 
for disclosure in its report
auditors and auditor independence
pwc and its predecessor firms have been the 
sole auditors of rb since 2000 the year after 
the merger of reckitt  colman plc and 
benckiser nv in 1999 and the company’s 
auditors since its formation in 2007 at the 
time of the merger pwc were the auditors of 
reckitt  colman plc and deloitte llp were the 
auditors of benckiser nv post merger the 
audit committee undertook a review and 
subsequently selected pwc as auditor for the 
group for the december 2000 year end in the 
opinion of the audit committee the 
relationship with the auditors works well and 
the committee remains satisfied with their 
independence and effectiveness it has 
accordingly not considered it necessary to 
require the firm to tender for the audit work 
although this is kept under review annually  
it is a requirement that the audit partner 
responsible for audit is rotated every five years 
and the lead audit partner was rotatedoff 
during 2013 our current expectation is that we 
will commence preparations for a competitive 
tender no later than 2019 there are no 
report of the audit committee continued 32 rb annual report 2013
governance  remuneration   corporate governance report 
d remuneration
d1 the level and components  
of remuneration 
the company’s compensation plan is 
performancedriven and designed to foster  
rb’s innovative and entrepreneurial culture 
following the 1999 merger of reckitt  
colman plc and benckiser nv the board set 
out to create a truly multinational company 
and as a result of this approach people of 
many nationalities work with local citizens  
in each location in which rb operates 
the level and components of remuneration 
across rb is designed to facilitate global 
mobility and diversity a similar employment 
contract is used and compensation rules  
apply equally for rb’s top400 managers  
in all markets salary ranges are based on 
global benchmarking and rb’s annual cash 
bonus structure longterm incentives and  
other benefits are offered across  
operating companies 
details on the company’s remuneration 
strategy and the directors’ compensation 
arrangements are set out in the directors’ 
remuneration report on pages 34 to 46
d2 remuneration committee and 
procedure 
the remuneration committee chaired by judith 
sprieser comprised four members until june 
2013 when it reduced to three following 
graham mackay’s retirement from the board 
due to ill health as at august 2013 judith 
sprieser had served ten years on the board 
nonetheless pursuant to code provision b11 
the board has determined that in its opinion 
judith sprieser remains independent richard 
cousins is considered independent under the 
code the third member of the committee  
is the chairman adrian bellamy who was 
independent on appointment 
detailed information on the committee  
and its activities is set out in the directors’ 
remuneration report on pages 34 to 46
e relations with shareholders
e1 relations with shareholders 
the board is committed to effective 
communications between the company and its 
shareholders the executive directors and the 
director of investor relations meet regularly 
with institutional shareholders and financial 
analysts to discuss matters relating to the 
company’s business strategy and current 
performance the board receives regular 
monthly reports from the ceo which include 
updates on share price developments major 
buyers and sellers of shares investors’ views  
and analysts’ reports on the industry and  
on the company specifically feedback on 
presentations and roadshow meetings  
with institutional investors is presented to  
the directors the investor relations  
programme includes
•	 	 formal 	 pr esentations 	 of 	 full 	 year 	 and 	 half	 
year results and quarterly interim 
management statements
•	 	 regular 	 meetings 	 between 	 institutional	
investors and senior management to ensure 
that the investor community receives a 
balanced and complete view of rb’s 
performance the issues faced by rb and  
any issues of concern to the investors 
•	 	 response 	 to 	 enquiries 	 fr om 	 institutional	
shareholders through the company’s investor 
relations team and from retail shareholders 
through the company secretary and
•	 	 a 	 section 	 dedicated 	 to 	 shar eholders 	 on 	 the	
company’s website 
over two days in november 2013 the  
company held an investor event with the twin 
objectives of
•	 	 demonstrating 	 the 	 significant 	 talent 	 within 	
rb’s management team outside the ceo and 
cfo and
•	 	 updating 	 investors 	 on 	 the 	 company’ s 	 value	
creation model and its ability to outperform 
with particular focus on health and hygiene 
powermarkets and emerging markets 
the chairman is available to discuss governance 
and strategy with major shareholders should 
such a dialogue be requested during the year 
the chairman liaised with shareholders and 
reported on these meetings to the directors 
the company believes that it is important to 
make key executives available along with the 
sid if required to discuss matters of concern 
with its shareholders
e2 the annual general meeting 
the agm provides all shareholders with an 
opportunity to vote on the resolutions put to 
them the agm is used as the main opportunity 
for the directors to meet directly with private 
investors it is attended by the directors and all 
shareholders present are given the opportunity 
to ask questions of the chairman the chairs of 
board committees and the board as a unit
all resolutions are voted on by way of poll so 
that each share has one vote the results of the 
poll are released to the stock exchange and 
published on the website shortly after the agm
contractual obligations restricting the 
company’s choice of auditors 
rb has a formal policy in place to safeguard 
auditor independence the audit committee 
and the cfo keep the independence and 
objectivity of the auditors under review the 
committee reviews the nature and level of 
nonaudit services undertaken by the auditors 
during the year to satisfy itself that there is no 
impact on their independence the board 
recognises that in certain circumstances the 
nature of the advice required may make it  
more timely and cost effective to appoint  
the auditors who already have a good 
understanding of rb
the company’s published policy on nonaudit 
fees states that on an annual basis nonaudit 
fees should not normally be in excess of 50 
of the group’s external audit and audit related 
fees on an aggregate basis the board confirms 
that for the year ended 31 december 2013 
nonaudit fees were less than 50 of the audit 
and audit related fees 
following a recommendation by the audit 
committee and in accordance with section 
489 of the 2006 act a resolution proposing 
the reappointment of pwc as the company’s 
auditors will be put to the shareholders at the 
agm rb does not indemnify its auditors
report of the audit committee continued
the auditors report to the audit committee  
on the actions they take to comply with 
professional and regulatory requirements and 
with best practice designed to ensure their 
independence from rb including periodic 
rotation of the audit engagement partners 
details of nonaudit services are set out in  
note 4 on page 61 rb annual report 2013 33
governance  remuneration   statement of directors’ responsibilities
disclosure of information to auditors
the directors having made appropriate 
enquiries state that
1  so far as each director is aware there is  
no relevant audit information of which the 
company’s auditors are unaware and
2  each director has taken all the steps that  
heshe ought to have taken as a director  
to make himherself aware of any relevant 
audit information and to establish that  
the company’s auditors are aware of  
that information
by order of the board
elizabeth richardson 
company secretary 
reckitt benckiser group plc 
103105 bath road  
slough berkshire sl1 3uh 
company registration number 6270876
7 march 2014
governing the preparation and dissemination of 
financial statements may differ from legislation 
in other jurisdictions 
the directors consider that the annual report 
and financial statements taken as a whole is 
fair balanced and understandable and provides 
the information necessary for shareholders to 
assess a company’s performance business 
model and strategy 
each of the directors whose names and 
functions are listed on page 20 confirms that 
to the best of hisher knowledge
•	 	 the	gr oup	financial	statements	which	have	
been prepared in accordance with ifrss as 
adopted by the eu and ifrss as issued by the 
iasb give a true and fair view of the assets 
liabilities financial position and profit of the 
group and
•	 	 the	report	of	the	dir ectors	includes	a	fair	
review of the development and performance 
of the business and the position of the 
group together with a description of the 
principal risks and uncertainties that it faces
going concern 
the group’s business activities together  
with the factors likely to affect its future 
development performance and position are  
set out in the strategic report on pages 1 to 
19 the financial position of the group and 
company its cash flows liquidity position and 
borrowing facilities as well as the group’s 
objectives policies and processes for managing 
its capital its financial risk management 
objectives details of its financial instruments 
and hedging activities and its exposure to 
credit risk and liquidity risk are described in the 
strategic report on page 19 and in note 14 to 
the group financial statements 
the group has considerable financial resources 
together with a diverse customer and supplier 
base across different geographical areas and 
categories as a consequence the directors 
believe that the group and company are well 
placed to manage their business risks 
successfully despite the current uncertain 
economic outlook
the directors have a reasonable expectation 
that the group and company have adequate 
resources to continue in operational existence 
for the foreseeable future thus they continue 
to adopt the going concern basis of accounting 
in preparing the annual financial statements in 
accordance with the frc’s ‘going concern and 
liquidity risk guidance for directors of uk 
companies 2009’ this statement is also made 
to fulfil the requirements of listing rules 
986r3 and 9810r1 and c12 of  
the code
the directors are responsible for preparing 
the annual report the directors’ 
remuneration 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 
group financial statements in accordance with 
international financial reporting standards 
ifrss as adopted by the european union and 
the parent company financial statements in 
accordance with united kingdom generally 
accepted accounting practice united kingdom 
accounting standards and applicable law in 
preparing the group financial statements the 
directors have also elected to comply with 
ifrss issued by the international accounting 
standards board iasb 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 group and the company and of the 
profit or loss of the group for that period  
in preparing these financial statements the 
directors are required to 
•	 	 select	suitable	accounting	policies	and	then	
apply them consistently
•	 	 make	judgements	and	accounting	estimates	
that are reasonable and prudent
•	 	 state	whether	ifrss	as	adopted	by	the	
european union and ifrss issued by iasb 
and applicable uk accounting standards 
have been followed subject to any material 
departures disclosed and explained in the 
group and parent company financial 
statements respectively
•	 	 pr epar e	the	financial	statements	on	the	
going concern basis unless it is inappropriate 
to presume that the company will continue 
in business
the directors are responsible for keeping 
adequate accounting records that are  
sufficient to show and explain the company’s 
transactions and disclose with reasonable 
accuracy at any time the financial position of 
the company and the group and enable them 
to ensure that the financial statements and the 
directors’ remuneration report comply with 
the companies act 2006 and as regards the 
group financial statements article 4 of the  
ias regulation they are also responsible for 
safeguarding the assets of the company and 
the group and hence for taking reasonable 
steps for the prevention and detection of fraud 
and other irregularities 
the directors are responsible for the 
maintenance and integrity of the company’s 
website legislation in the united kingdom 
statement of directors’  
responsibilities 34 rb annual report 2013
governance  remuneration   directors’ remuneration report 
directors’ remuneration report
this directors’ remuneration report has been 
prepared in accordance with the provisions of 
the companies act 2006 and schedule 8 of  
the large and mediumsized companies and 
groups accounts and reports amendment 
regulations 2013 the report meets the 
requirements of the uk listing authority’s 
listing rules and the disclosure and 
transparency rules in this report we describe 
how the principles of good governance relating 
to directors’ remuneration as set out in the  
uk corporate governance code september 
2012 the code are applied in practice  
the remuneration committee confirms that 
throughout the financial year the company has 
complied with these governance rules and best 
practice provisions
introduction
on behalf of the board of directors it gives me 
great pleasure to present to you the directors’ 
remuneration report for the year ended  
31 december 2013 for which we will be 
seeking approval at the annual general 
meeting agm on 7 may 2014 in line with 
the new reporting regulations that came into 
effect on 1 october 2013 this directors’ 
remuneration report is split into three parts 
this annual statement a policy report subject 
to a binding shareholder vote at the 2014 
agm and an annual report on remuneration 
subject to an advisory vote i and my 
colleagues on the remuneration committee 
hope that the new layout of the remuneration 
report is clear transparent and helpful and 
that we can count on your support for our 
remuneration policy and its implementation 
during the year
context for executive remuneration at rb
the committee continues to believe that its 
approach to remuneration although different 
in some respects to typical ftse practice is an 
important factor in rb’s success supporting a 
strong performance culture and delivering 
significant benefits to all shareholders our 
approach to remuneration reflects the global 
nature of our business our management team 
is multinational is globally mobile and we 
compete for talent against a peer group of 
global fmcg companies central to our pay 
philosophy are the principles of
•	 simplicity
•	 shar eholder	alignment	and
•	 pay	for	performance
we reinforce our philosophy by positioning 
executive director fixed pay base salary 
pension and benefits around median market 
levels but providing executive directors with 
incentive opportunities strongly linked to 
performance to enable abovemarket pay 
opportunities for abovemarket performance  
in terms of growth profitability and 
shareholder returns
major decisions on and changes to 
executive directors’ remuneration 
during the year
the structure of 2014 ltip awards  
granted in december 2013
during the first quarter of 2013 i held 
meetings with a number of our largest 
shareholders on the subject of executive 
remuneration the committee and the board 
of directors as a whole take very seriously the 
views and feedback of our shareholders and 
although the majority of shareholders are 
strongly supportive of our philosophy and 
policy on remuneration we did receive some 
comments and concerns over our longterm 
incentive plan ltip in particular the sole use 
of adjusted earnings per share eps the eps 
performance range and the vesting level for 
achieving threshold performance
following a review of our ltip in response  
to this feedback the committee agreed to 
make two changes to awards granted in 
december 2013
•	 	 a	widening	of	the	performance	range	for	
eps compound annual average growth 
caag from 69 pa to 610 pa
•	 	 a	r eduction	in	the	thr eshold	vesting	level	
from 40 to 20 of maximum
the committee feels these changes reinforce 
our philosophy of abovemarket pay only for 
abovemarket performance the new maximum 
vesting level of an eps caag of 10 pa is 
equivalent to a top quintile ie above 80th 
percentile level of performance in addition we 
have maintained a threshold eps caag target 
of 6 pa which is above market median 
performance but reduced the level of vesting 
from 40 to 20 which substantially reduces 
the value of the ltip to participants at this 
minimum level of performance
the number of shares awarded to the ceo in 
december 2013 was increased from 200000 in 
december 2012 to 240000 the number of 
options awarded remained unchanged from 
previous years the increase in the number  
of shares was considered appropriate in order 
to recognise the strong performance of the 
ceo since his appointment and still remains 
significantly below the lti awards that were 
made to the previous ceo given the changes 
outlined above the ceo will only receive value 
from this additional benefit if truly exceptional 
performance is delivered
these changes are covered more fully in the 
annual report on remuneration
some of our shareholders expressed a 
preference for eps to be supplemented by  
a second measure such as return on capital 
employed in our ltip  the committee 
considered this feedback in depth and 
concluded on balance that it wished to 
maintain the simplicity and consistency of the 
ltip  the committee believes that the heavy 
weighting of the longterm variable equity 
component of pay for executives together with 
our demanding executive share ownership 
requirements equivalent to up to 30x salary 
reduce the need for a second measure since the 
proportion of personal net worth that the 
executive directors have invested in company 
shares already strongly motivates them to act in 
a manner consistent with the best interests of 
our shareholders 
i hope that this remuneration report achieves 
the aim of improved transparency and clarity 
under the new reporting requirements and 
that we can count on your support at the 
forthcoming agm for both our remuneration 
policy and the decisions we have taken as a 
committee during the year
judith sprieser 
chairman of the remuneration committee rb annual report 2013 35
governance  remuneration   directors’ remuneration report 
component purpose and 
link to strategy operation opportunity performance measures
variable remuneration incentives
annual bonus
to drive strong 
financial performance 
with significant reward 
for over achievement 
of annual targets
financial targets are set by the committee at the 
start of the year with reference to prevailing 
growth rates in rb’s peer group and across the 
health care and fmcg industries more broadly  
at the end of the year the committee determines 
the extent to which these have been achieved
performance is assessed on an annual basis using 
a multiplicative combination of the payouts for 
performance against each of the financial targets 
bonus payouts are in cash
under the terms and conditions of the plan the 
company has the right to seek redress and 
damages from any individual who has been found 
to have breached the company’s code of 
conduct this includes the company’s right to 
require an individual to repay any costs incurred 
through a breach of the code of conduct from 
any bonus payment made in the year the breach
costs were incurred
the committee has discretion to adjust the 
formulaic bonus outcomes both upwards and 
downwards including to zero and capped at the 
maximum payout to ensure alignment of pay with 
performance eg in the event performance is 
impacted by unforeseen circumstances outside of 
management control
target opportunity 
ceo 120 of salary 
cfo 90 of salary 
maximum opportunity 
357x target 
ceo 428 of salary 
cfo 321 of salary
performance will be assessed 
against the growth in one or 
more key financial metrics of 
the business determined on an 
annual basis
the weighting between 
different financial metrics will 
be determined each year 
according to business priorities
for threshold performance  
the bonus payout will be nil
further details including  
the performance measures  
for the current financial year  
are disclosed in the annual 
report on remuneration
ltip
share options and 
performance shares
to incentivise and 
reward longterm 
performance and  
align the interests of 
executive directors 
with those of 
shareholders
the ltip comprises grants of share options and 
awards of performance shares based on a fixed 
number which vest subject to the achievement  
of stretching performance targets
the ltip has a performance period of at least  
three years and a minimum vesting period  
of three years
the ltip opportunity and the combination of share 
options and performance shares are reviewed 
annually with reference to market data and the 
associated cost to the company calculated using 
an expected value methodology
the performance condition is reviewed before 
each award cycle to ensure it remains 
appropriately stretching
the committee has discretion to adjust the 
formulaic ltip outcomes to improve the alignment 
of pay with value creation for shareholders to 
ensure the outcome is a fair reflection of the 
performance of the company 
the committee calibrates ltip share 
award and option grant sizes as a 
fixed number with periodic 
adjustments to ensure that the fair 
value of an executive director’s total 
remuneration is appropriately 
positioned relative to peers 
the maximum award to  
any individual in one year  
will be 300000 shares and  
600000 options
details of the ltip opportunity  
in respect of each year will be 
disclosed in the annual report  
on remuneration 
dividends do not accrue  
on unvested share awards or on 
shares underlying options before 
they are exercised
vesting of the ltip is subject  
to continued employment  
and the achievement of 
stretching adjusted diluted eps 
growth targets
threshold performance will 
result in 20 of maximum 
vesting the vesting level will 
increase on a sliding scale  
from this threshold to 100 
vesting for stretch levels  
of performance
further details including  
the performance targets 
attached to the ltip in  
respect of each year are 
disclosed in the annual report 
on remuneration
sharesave
to encourage the 
ownership of rb shares
an hmrc approved scheme where employees 
including executive directors may save a monthly 
amount over three years options granted at up to 
a 20 discount
savings capped at the limit set  
by hrmc
na
 directors’ remuneration policy
this section of the report sets out the remuneration policy for executive directors and nonexecutive directors which shareholders will be asked  
to approve at the 2014 agm on 7 may 2014 the committee intends that the policy will come into effect on this date if approved by shareholders 
and be effective for three years
a summary of the directors’ remuneration policy is summarised in the table below 
executive director remuneration policy table 36 rb annual report 2013
governance  remuneration   directors’ remuneration report
component purpose and 
link to strategy operation opportunity performance measures
base salary and benefits
base salary
to enable the total 
package to support 
recruitment and 
retention
base salaries are reviewed annually typically with 
effect from 1 january
salary levelsincreases take account of
•			 competitive	practice	in	the	company’ s	
remuneration peer group comprising 
international companies of a similar size  
and scope of operations
•			 individual	performance
•			 salary	incr eases	awar ded	acr oss	the	gr oup	 
as a whole
salaries for executive directors 
should typically be around the 
median for competitors
salaries in respect of the year under 
review and for the following year 
are disclosed in the annual report 
on remuneration
to avoid setting expectations of 
executive directors and other 
employees no maximum salary is 
set under the remuneration policy
salary increases for executive 
directors will be aligned with those 
of the wider workforce which take 
into account performance 
increases may be made above this 
level to take account of individual 
circumstances which may include
•			 incr ease	in	the	size	or	scope	of	
the role or responsibilities
•			 incr ease	to	r eflect	the	individual’ s	
development and performance in 
role for example where a new 
incumbent is appointed on a 
below market salary
where increases are awarded in 
excess of the wider employee 
population the committee  
will provide rationale in the relevant 
year’s annual report on 
remuneration
na
pension
to provide appropriate 
levels of retirement 
benefit
executive directors may receive contributions into 
the rb executive pension scheme a defined 
contribution scheme a cash allowance or  
a combination thereof
base salary is the only element of remuneration 
that is pensionable
ceo 30 of pensionable pay 
cfo 25 of pensionable pay
na
benefits
to provide benefits 
comparable to those 
that would be provided 
for an equivalent 
position elsewhere
executive directors receive benefits which consist 
primarily of the provision of a company car
allowance and health care although can include 
other benefits that the committee deems 
appropriate for example the cost of preparing tax 
returns or home leave
relocation allowances and international transfer 
related benefits may also be paid where required
none of the existing executive 
directors received total taxable 
benefits exceeding 10 of salary 
during the last three financial years 
and it is not anticipated that the 
cost of benefits provided will exceed 
this level in the financial years over 
which this policy will apply
the committee retains the 
discretion to approve a higher cost 
in exceptional circumstances  
eg relocation or in circumstances 
where factors outside the 
company’s control have changed 
materially eg increases in medical 
coverage inflation
benefits in respect of the year under 
review are disclosed in the annual 
report on remuneration
na
executive director remuneration policy table continued rb annual report 2013 37
governance  remuneration   directors’ remuneration report 
notes to the policy table
payments from existing awards
executive directors are eligible to receive payment from any award made prior to the approval and implementation of the remuneration policy detailed 
in this report ie before 7 may 2014 details of these awards are disclosed in the annual report on remuneration
performance measure selection and approach to target setting
the measures used under the annual bonus are selected to reflect the group’s main financial priorities for any given financial year with regard to the 
ltip  the committee regularly reviews the performance measure to ensure that it aligns well with the company’s strategy and with our shareholders’ 
interests eps is considered the most appropriate ltip performance measure for a number of reasons
•	 it	focuses	executives	on	r eal	pr ofit	gr owth	which	is	str ongly	aligned	with	value	cr eation	at	rb
•	 it	pr ovides	a	wellr ecognised	and	accepted	measur e	of	the	company’ s	underlying	financial	performance	and
•	 it	is	a	measur e	that	the	plan	participants	can	dir ectly	impact	and	is	easily	measurable
eps is measured on an adjusted diluted basis as shown in the group’s financial statements as this provides an independently verifiable measure  
of performance however the remuneration committee maintains the discretion to make adjustments to the measure if this is considered to be 
appropriate any adjustments will be disclosed in the annual report on remuneration
targets applying to the bonus and ltip are reviewed annually based on a number of internal and external reference points bonus targets take into 
account prevailing growth rates in rb’s peer group and across the health care and fmcg industries more broadly ltip targets reflect industry context 
expectations of what will constitute performance at the top of the peer group and factors specific to the company
remuneration policy for other employees
rb’s approach to annual salary reviews is consistent across the group with consideration given to the level of experience responsibility individual 
performance and salary levels for comparable roles in comparable companies
senior employees are eligible to participate in an annual bonus scheme with similar metrics to those used for the executive directors opportunities and 
specific performance conditions vary by organisational level with business areaspecific metrics incorporated where appropriate
senior managers who comprise of the top400 employees are eligible to participate in the ltip on broadly similar terms as the executive directors 
although award sizes vary by organisational level in addition senior executives who comprise of the top40 employees are also required to build up 
significant shareholdings in rb of between 3050000 shares representing c8x base salary 
all uk employees are eligible to participate in the company’s sharesave plan on identical terms
shareholder alignment
the committee recognises the importance of aligning executive directors’ and shareholder interests through executives building up significant shareholdings 
in the company executive directors are expected to acquire a significant number of shares over a period of eight years and retain these until retirement 
from the board of directors the shareholding requirement for the ceo is 600000 shares and for the cfo is 200000 shares 
details of the executive directors’ current personal shareholdings are provided in the annual report on remuneration on page 46
nonexecutive director remuneration
nonexecutive directors do not have service agreements but are engaged on the basis of a letter of appointment in line with the uk corporate 
governance code september 2012 guidelines all directors are subject to reelection annually at the agm
it is the policy of the board of directors that nonexecutive directors are not eligible to participate in any of the company’s bonus share option 
longterm incentive or pension schemes an element of the basic fee is however paid in rb shares
details of the policy on fees paid to our nonexecutive directors are set out in the table below
component and objective approach of the company
fees cash  
and shares
to attract and retain 
nonexecutive 
directors of the highest 
calibre with broad 
commercial experience 
relevant to the 
company
the fees paid to nonexecutive directors are determined by the board of directors with recommendations provided by  
the chairman and ceo the fees of the chairman are determined by the remuneration committee
additional fees are payable for acting as deputy chairman senior independent nonexecutive director and as chairman  
of the audit and remuneration committees members of the audit and remuneration committees also receive an 
additional fee
fee levels may be reviewed annually with any adjustments effective 1 january fees are reviewed by taking into account 
external advice on best practice and competitive levels in particular at ftse 30 and ftse 100 companies time commitment 
and responsibility are also taken into account when reviewing fees
chairman and nonexecutive fees are delivered partly in cash and partly in rb shares which must be held until retirement 
from the company 
the fees paid to the chairman and nonexecutive directors in respect of the year under review and for the following year 
including the split between cash and shares are disclosed in the annual report on remuneration
aggregate fees are limited to £15m by the company’s articles of association 38 rb annual report 2013
governance  remuneration   directors’ remuneration report 
scenario analysis
the charts below provide an estimate of the potential future reward opportunities for the executive directors and the potential split between the different 
elements of remuneration under three different performance scenarios ‘minimum’ ‘ontarget’ and ‘maximum’
potential reward opportunities are based on rb’s remuneration policy applied to 2014 base salaries the annual bonus and ltip are based on the maximum 
opportunity levels applying for fy 2014 benefits are based on those benefits paid in respect of fy 2014
note that the ltip awards granted in a year do not normally vest until the third anniversary of the date of the agm which follows the third anniversary 
of grant and the projected values exclude the impact of share price movement 
 
 
 
diluted earnings per share pence
200 150 100 50
11 10 09 08 07
10 09 08 07
11 10 09 08 07
0 250
adjusted net income £m 
adjusted to exclude the impact of exceptional items and 
  tax effects thereon refer note 8 of the financial statements
  for further detail
2000 1600 1200 800 400 0
0
50
100
150
200
250
declared dividend per share pence
75 50 25 0 125 100
0
25
50
75
100
125
adjusted to exclude the impact of exceptional items and 
  tax effects thereon refer note 8 of the financial statements
  for further detail
0
400
800
1200
1600
2000
1143
905
1418
1818

1661
maximum ontarget minimum
maximum ontarget minimum
average three year earnings per share growth pa
rakesh kapoor ceo 
£m
20 16 12 84 0
1234
1578
2471

1947
800
550
1000
1250
1150
2265
adrian hennah cfo 
£m
86 42 0 10
0
4000
8000
12000
16000
20000
ltip annual 
bonus
salary
0
2000
4000
6000
8000
10000
ltip annual 
bonus
salary
salary pension 
 benefits
annual 
bonus
ltip
6 7 8 9
 vesting
80 60 40 20 0 100
0
20
40
60
80
100
04 8121620
maximum 
ontarget
minimum
maximum 
ontarget
minimum
1825
487
116
rakesh kapoor ceo 
£m
rakesh kapoor ceo 
£m
04 8121620
1825
487
116
salary pension and benefits annual bonus longterm incentives share options and performance shares
0123456
maximum 
ontarget
minimum
adrian hennah cfo 
£m
175
071
511
6 20
24
100 100
2155 4129 30
74 14 35 51
valuation assumptions
the ‘minimum’ scenario reflects base salary pension and benefits ie fixed remuneration being the only elements of the executive directors’ 
remuneration package not linked to performance
the ‘ontarget’ scenario reflects fixed remuneration as above plus target bonus payout 120 and 90 of salary for the ceo and cfo respectively 
and ltip threshold vesting at 20 of the maximum award level
the ‘maximum’ scenario reflects fixed remuneration plus full payout under all incentives 428 and 321 of salary for the ceo and cfo respectively 
under the annual bonus and full vesting of ltip awards
the value of performance shares and share options is based on the price at grant of £4783 11 december 2013 share options are valued as 10 of 
face value which has been calculated using a blackscholes option pricing model and assumptions aligned to the threeyear performance period
approach to recruitment remuneration
external appointment
in cases of hiring or appointing a new executive director from outside the company the remuneration committee may make use of all existing 
components of remuneration as follows
component approach award
base salary the base salaries of new appointees will be determined by reference to relevant market 
data experience and skills of the individual internal relativities and their current basic 
salary where new appointees have initial basic salaries set below market the shortfall  
to median may be managed with phased increases over a period of two or three years 
subject to their development in the role
benefits new appointees will be eligible to receive benefits which may include but are not limited 
to the provision of a company car or car allowance health care and any necessary 
relocation expenses in line with ongoing remuneration policy
pension new appointees will receive pension contributions andor an equivalent cash supplement 
in line with existing executives as set out in the ongoing remuneration policy
annual bonus the structure described in the policy table will apply to new appointees with the relevant 
maximum opportunity 
target 120 of salary
multiple 357x target
ltip new appointees will be granted awards under the ltip on the same terms as other 
executives as described in the policy table ltip grants can take the form of performance 
shares share options or a combination of the two
300000 performance shares
600000 share options
the overall limit of variable remuneration will be as set out in the policy table taking into account the maximum value of the annual bonus and the 
maximum awards of options and shares under the ltip 
the committee may make an award in respect of a new appointment to ‘buy out’ incentive arrangements forfeited on leaving a previous employer  
ie over and above the approach outlined in the table above in doing so the committee will consider relevant factors including any performance 
conditions attached to these awards and the likelihood of those conditions being met with the intention that the value awarded would be no higher 
than the expected value of the forfeited arrangements and made on a likeforlike basis  rb annual report 2013 39
governance  remuneration   directors’ remuneration report 
internal promotion
in cases of appointing a new executive director by way of internal promotion the policy will be consistent with that for external appointees as detailed 
above where an individual has contractual commitments made prior to their promotion to executive director level the company will continue to 
honour these arrangements even in instances where they would not otherwise be consistent with the prevailing executive director remuneration policy 
at the time of appointment
nonexecutive directors
in recruiting a new nonexecutive director the remuneration committee will use the policy as set out in the table on page 37 a base fee in line with 
the prevailing fee schedule would be payable for membership of the board of directors with additional fees payable for acting as deputy chairman 
senior independent director as chairman of the audit and remuneration committees and for being a member of the audit and remuneration 
committees fees will be delivered partly in cash and partly in rb shares to be held until retirement from the company
service contracts and exit payment policy
executive director service contracts including arrangements for early termination are carefully considered by the committee in accordance with 
general market practice each of the executive directors has a rolling service contract which is terminable on twelve months’ notice and this practice will 
also apply for any new executive directors in such an event the compensation commitments in respect of their contracts could amount to one year’s 
remuneration based on base salary benefits in kind and pension rights during the notice period termination payments may take the form of payments 
in lieu of notice copies of executive director service contracts are available to view at the company’s registered office
the company’s policy on any termination payments is to consider the circumstances on a casebycase basis taking into account the relevant 
contractual terms in the executive’s service contract and the circumstances of the termination the table below summarises how awards under the 
annual bonus and ltip are typically treated in specific circumstances with the final treatment remaining subject to the committee’s discretion as 
provided under the rules of the plan
reason for cessation timing of vestingpayment calculation of vestingpayment
annual bonus
voluntary resignation or 
termination with ‘cause’
not applicable no bonus to be paid for the financial year
all other circumstances at the end of the financial year bonuses will be paid only to the extent that 
objectives set at the beginning of the plan year 
have been met any such bonus will be paid on 
a pro rata basis up to the termination date
ltip
voluntary resignation or 
termination with ‘cause’
not applicable unvested awards lapse
illhealth injury permanent 
disability retirement with the 
agreement of the company 
redundancy or any other 
reason that the committee 
determines in its  
absolute discretion
after the end of the financial year in which the cessation of 
employment occurs or at the discretion of the committee  
after the end of the relevant performance period
the committee determines whether and to 
what extent outstanding awards vest based  
on the extent to which performance conditions 
have been achieved either to the end of the 
financial year in which cessation of employment 
occurs or over the full performance period 
and the proportion of the performance  
period worked
death as soon as possible after date of death the committee may disapply performance 
conditions but will reduce awards to reflect the 
proportion of the performance period worked
change of control on change of control awards will vest to the extent that any 
performance conditions have been satisfied 
unless the committee determines that the 
performance conditions should not apply 
awards will also be reduced pro rata to  
take into account the proportion of the 
performance period not completed unless  
the committee decides otherwise
awards may alternatively be exchanged  
for new equivalent awards in the acquirer 
where appropriate 40 rb annual report 2013
governance  remuneration   directors’ remuneration report 
external appointments 
with the approval of the board of directors in each case and subject to the overriding requirements of the company executive directors may accept 
one external appointment as a nonexecutive director of another company and retain any fees received details of external appointments and the 
associated fees received are included in the annual report on remuneration
consideration of conditions elsewhere in the company
the committee does not consult with employees specifically on executive remuneration policy however the company seeks to promote and maintain 
good relations with employee representative bodies – including trade unions and works councils – as part of its employee engagement strategy and 
consults on matters affecting employees and business performance as required in each case by law and regulation in the jurisdictions in which the 
company operates although the company does not consult employees on executive remuneration the committee is mindful of the salary increases 
applying across the rest of the business in relevant markets when considering salaries for executive directors
consideration of shareholder views 
the committee considers shareholder views received during the year and at the annual general meeting each year as well as guidance from shareholder 
representative bodies more broadly in shaping remuneration policy the committee chairman speaks with a number of the company’s largest shareholders 
on the subject of executive remuneration at least on an annual basis the majority of shareholders are supportive of the company’s philosophy and 
policy on remuneration and the committee will continue to keep its remuneration policy under regular review to ensure it continues to reinforce the 
company’s longterm strategy and aligns closely with shareholders’ interests the committee will continue to consult our major shareholders before 
making any significant changes to our remuneration policy
 annual report on remuneration
the following section provides details of how our remuneration policy was implemented during the year ended 31 december 2013
remuneration committee membership in 2013
as of 31 december 2013 the remuneration committee comprised three nonexecutive directors
•	 judith	sprieser	chairman
•	 richar d	cousins
•	 adrian	bellamy
graham mackay was also a member of the remuneration committee until 12 june 2013 when he retired from the board as at 31 december 2013 
judith sprieser has served ten years on the board of directors nonetheless pursuant to code provision b11 the board of directors has determined 
that in its opinion judith sprieser remains independent richard cousins is considered independent under the code adrian bellamy chairman of the 
company was independent on appointment but has served on the board of directors for more than nine years 
the committee’s purpose is to assist the board of directors in fulfilling its oversight responsibility by ensuring that remuneration policy and practices 
reward fairly and responsibly are linked to corporate and individual performance and take account of the generally accepted principles of good 
governance on behalf of and subject to approval by the board of directors the committee primarily
•	 sets	and	r egularly	r eviews	the	company’ s	overall	r emuneration	strategy
•	 determines	the	general	remuneration	policy	for	senior	executives	and
•	 in	r espect	of	the	chairman	the	executive	dir ectors	and	members	of	the	executive	committee	sets	r eviews	and	appr oves
	 •	 remuneration	policies	including	annual	bonuses	and	longterm	incentives
	 •	 individual	r emuneration	and	compensation	arrangements
	 •	 individual	benefits	including	pension	and	superannuation	arrangements
	 •	 t erms	and	conditions	of	employment	including	the	executive	dir ectors’	service	agr eement
	 •	 participation	in	any	of	the	company’ s	bonus	and	longterm	incentive	plans	and
	 •	 the	targets	for	any	of	the	company’ s	performancer elated	bonus	and	longterm	incentive	plans
the chairman of the board of directors and the ceo are responsible for evaluating and making recommendations to the board of directors on the 
remuneration of the nonexecutive directors members of the remuneration committee and any person attending its meetings do not participate  
in any discussion or decision on their own remuneration
the remuneration committee held four scheduled meetings and one additional meeting during the year and details of members’ attendance at 
meetings are provided in the corporate governance section on page 26
advisers
kepler associates ‘kepler’ was originally appointed by the committee as independent advisor in mid2012 following a competitive tender process  
and was retained during 2013 the committee undertakes due diligence periodically to ensure that kepler remains independent of the company and 
that the advice provided is impartial and objective kepler is a founding member and signatory of the code of conduct for remuneration consultants 
details of which can be found at wwwremunerationconsultantsgroupcom during 2013 kepler provided support to the committee in relation to short 
and longterm incentive design benchmarking executive remuneration structure and levels and the consultation of shareholders on remuneration 
matters kepler associates does not advise the company on any other matters their total fees for the provision of remuneration services to the 
committee in 2013 were £215935 on the basis of time and materials rb annual report 2013 41
governance  remuneration    directors’ remuneration report 
summary of shareholder voting at the 2013 agm
the following table shows the results of the advisory vote on the 2012 remuneration report at the 2013 agm
        total number of votes  of votes cast
for including discretionary        421057300 8177
against        93881447 1823
total votes cast excluding withheld votes       514938747 1000
votes withheld        11173126 
total votes cast including withheld votes       526111873 
whilst the level of support for the remuneration report was broadly similar to that received at the 2012 agm 84 the committee recognises that 
there remain a number of areas of concern for shareholders including incentive award opportunities and the use of a single longterm performance 
measure eps growth the committee believes the existing incentive arrangements are simple reinforce our remuneration principles and align 
executives closely with the interests of our shareholders in addition the requirement for senior executives to build up significant shareholdings in the 
company further supports our policy of executive alignment with shareholders’ interests the committee regularly reviews the incentive arrangements 
for executive directors and taking into account the feedback received from our shareholders decided to make a number of changes to ltip awards 
that were granted in december 2013 including a reduction in the threshold vesting level and an extension to the eps performance range as explained 
in the remuneration committee chairman’s letter 
single total figure of remuneration for executive directors audited
the table below sets out a single figure for the total remuneration received by each executive director for the year ended 31 december 2013 and the 
prior year the values of each element of remuneration are based on the actual value delivered where known for the year ended 31 december 2012 
the ltip value has been restated to reflect the actual value of ltip awards that vested on 2 may 2013 at a share price of £4677 rather than the 
estimated value based on £3799 being the threemonth average share price to 31 december 2012
      rakesh kapoor adrian hennah
1
 liz doherty
2
        
      2013 2012 2013 2012 2013 2012
      £ £ £ £ £ £
base salary      832000 800000 550000 – 90100 428000
taxable benefits
3
      38585 31000 20992 – 4044 24000
annual bonus
4
      3564288 1814000 1767150 – 78153 729000
ltip      2010240
5
 5527800 – – – –
pension benefit
6
      247200 238000 135500 – 12500 73000
other      – – 1395750
7
 – – –
total      6692313 8410800 3869392 – 184797 1254000
1
  adrian hennah joined the board of directors as cfo on 12 february 2013 however he was employed by the company from 1 january 2013 and the 
figures above represent all payments from the commencement of his employment during 2013 adrian hennah served as a nonexecutive director 
of reed elsevier plc for which he retained fees of £65000 these fees are excluded from the table above
2
  liz doherty stepped down from the board of directors on 12 february 2013 but was maintained in employment with the company until  
15 march 2013 the figures above represent all payments until the cessation of her employment details of payments made on cessation of 
employment are provided on page 44
3
 taxable benefits consist primarily of company car or car allowance health care and home leave 
4
 cash payment for performance during the year see ‘annual bonus in respect of 2013 performance’ on page 42 for details
5
  reflects the estimated value of ltip shares and options granted in december 2010 which are due to vest on 7 may 2014 at 40 these have been 
valued using an average share price over q4 of £4688 see the relevant sections on pages 42 for further details
6
  during the year rakesh kapoor participated in the rb executive pension plan a defined contribution scheme in relation to which the company 
contributed £50000 in the year 2012 £50000 for rakesh kapoor and liz doherty the company also paid executive directors a cash allowance 
which amounted to £197200 and £135500 for rakesh kapoor and adrian hennah respectively in combination these payments reflect the full 
pension provision outlined in the policy table 2012 £188000 for rakesh kapoor and £23000 for liz doherty
7
  includes a signon award of £200000 paid on appointment partially to replace the value of deferred bonus awards at his previous employer value 
also includes a cash lump sum equal in value to 25000 rb shares of £1195750 the net amount of which has been used to purchase shares which 
are retained as part of the executive share ownership obligation 42 rb annual report 2013
governance  remuneration   directors’ remuneration report 
incentive outcomes for the year ended 31 december 2013 audited
annual bonus in respect of 2013 performance
the performance measures attached to the 2013 annual cash bonus plan were net revenue and net income growth as in 2012 target performance 
was calibrated to deliver a bonus of 120 and 90 of salary for the ceo and cfo respectively with bonus payments worth up to 357x these target 
amounts equivalent to 428 of salary for the ceo and 321 of salary for the cfo available for truly exceptional performance performance under 
each of the measures is combined multiplicatively such that threshold performance would deliver zero bonus whilst stretch performance would deliver 
357x target bonus
the net revenue and net income targets set at the start of the year not disclosed as we consider them to be commercially sensitive took into account 
the fact that generics for suboxone tablets entered the us market in late february 2013 and were anticipated to have a material impact on the revenue 
and profitability of the rb pharmaceuticals business despite the challenges faced within rb pharmaceuticals the group has delivered exceptional 
performance by continuing to grow the core business and maintaining market share within rb pharmaceuticals
•	 	 excluding	rb	pharmaceuticals	net	r evenues	have	incr eased	7	based	on	a	constant	exchange	rate	and	5	on	a	likefor like	basis	these	ar e	well	
above the general market growth rates this growth has been led by our new strategy to drive health and hygiene powerbrands together with our 
focus on 16 powermarkets 
•	 	 excluding	rb	pharmaceuticals	adjusted	operating	pr ofit	has	also	incr eased	by	7	based	on	a	constant	exchange	rate	with	margins	incr easing	to	
236 exceeding targets
•	 	 our	volume	film	market	shar e	for	total	bupr enorphine	pr escriptions	in	the	us	has	been	maintained	at	68	since	the	launch	of	generic	tablets	which	
demonstrates an outstanding performance despite huge challenges being faced in this area
•	 	 excellent	pr ogr ess	has	been	made	with	our	acquir ed	businesses	the	ef fective	ongoing	integration	of	schif f	and	ef fective	collaboration	agr eements	
with bms and guilong has proven again rb’s strength to acquire high quality businesses and delivering superior shareholder value
•	 w e	have	also	deliver ed	a	significant	gr oss	margin	expansion	of	150	bps	and	net	working	capital	impr ovements	of	£163m	to	minus	£863m
•	 this	str ong	performance	has	r esulted	in	a	dividend	payment	which	is	2	above	that	deliver ed	last	year 
based on performance measures against the targets but also supported by the overall financial results outlined above the committee has decided to 
make an annual bonus award of 428 of base salary to the ceo and 321 of base salary to the cfo equivalent to 357x target bonus
ceo’s 2011 ltip
ltip awards for 2011 were dependent on compound average annual growth caag in adjusted eps over the threeyear period ending on 31 december 
2013 the threshold target for awards was growth of 6 pa with awards vesting in full for growth of 9 pa the threshold performance target was 
achieved and the ceo’s ltip award granted to him when he was evp  category development may vest to the following extent in may 2014 for 
performance over the completed threeyear period
   interests exercise vesting interests date assumed estimated
awards   held price  vesting vesting market price value
shares   60000 na 
40
 24000 7 may 2014 
£4688
 £1125120
options   180000 £3464  72000 7 may 2014  £881280
the value disclosed above and in the single total figure of remuneration table on page 41 captures the full number of interests vesting as the market 
price on the date of vesting is unknown at the time of reporting the value is estimated using the average market value over the last quarter of 2013  
of £4688 the actual value at vesting will be truedup in the 2014 annual report on remuneration
former cfo’s ltip awards
in line with the ltip rules liz doherty’s outstanding ltip share awards and option grants did not lapse on cessation of employment but were prorated 
for the time elapsed from the start of each respective performance period to cessation of employment performance was tested over the performance 
period to 31 december 2013 to determine the vesting outcome for each time prorated award which is due to vest in may 2014 as follows
  date of interest exercise time  vesting interests assumed estimated
awards  grant granted price prorated interest
1
  vesting market price value
shares 9 february 2011 10000 na 7372 40 2949  £138249
shares 5 december 2011 45000 na 18173 0 0 £4688 £0
options 5 december 2011 90000 £3209 36346 0 0  £0
1
 reflects the number of weeks elapsed from the start of the performance period 1 january to cessation of employment 15 march 2013
single total figure of remuneration for nonexecutive directors audited
the following nonexecutive director fee policy was in place for the year ended 31 december 2013
          fee delivered
role         cash fee in rb shares
chairman         £308000 £67000
deputy chairman         £82000 £18000
nonexecutive director         £70000 £15000
chairman of audit committee         £30000 –
chairman of remuneration committee        £30000 –
member of audit committee         £15000 –
member of remuneration committee        £15000 –
senior independent director         £12000 – rb annual report 2013 43
governance  remuneration   directors’ remuneration report 
single total figure of remuneration for nonexecutive directors continued
the table below sets out a single figure for the total remuneration received by each nonexecutive director for the year ended 31 december 2013 and 
the prior year 
      2013 fees £ 2012 fees £
       
    base fee committee 2013 base fee committee 2012
    cash shares fees total cash shares fees total
adrian bellamy    308000 67000 – 375000 283000 62000 – 345000
richard cousins    70000 15000 15000 100000 61500 13500 10000 85000
peter harf    82000 18000 15000 115000 65500 14500 10000 90000
kenneth hydon    70000 15000 30000 115000 61500 13500 20000 95000
andré lacroix
1
    70000 15000 21000 106000 61500 13500 10000 85000
judith sprieser    70000 15000 30000 115000 61500 13500 20000 95000
warren tucker    70000 15000 15000 100000 61500 13500 10000 85000
graham mackay
2
    35000 15000 13500 63500 61500 13500 17000 92000
nicandro durante
3
    7083 – – 7083 – – – –
1
 andré lacroix was appointed as senior independent director with effect from 12 june 2013
2
 the fees paid to graham mackay for 2013 relate to the period 1 january 2013 to 12 june 2013 when he stepped down from the board of directors
3
 nicandro durante was appointed a nonexecutive director with effect from 1 december 2013
scheme interests awarded in 2013 audited
ltip
in december 2013 executive directors were granted the following awards under the ltip  based on a fixed number of shares and share options 
   shares market
   over which price
   awards at date exercise face performance exercise
  date of grant granted of award
1
 price
2
 value
3
 period  vesting period
performance shares
rakesh kapoor   240000   £11205600 1 jan 14 – 
  11 december 2013  £4669 na  31 dec 16 may 17
adrian hennah   45000   £2101050  
share options
rakesh kapoor   400000   £18676000 
  11 december 2013  £4669 £4783  1 jan 14 – may 17 –
       31 dec 16 dec 23
adrian hennah   90000   £4202100  
1
 the market price on the date of award is the closing share price on the date of grant
2
 the exercise price is based on the average closing share price over the five business days prior to the date of grant
3
 based on the market price at the date of award
consistent with awards made since december 2008 vesting of the ltip awards is dependent on the achievement of targets relating to compound 
average annual growth caag in eps over a threeyear period eps is measured on an adjusted diluted basis as shown in the group’s financial 
statements as this provides an independently verifiable measure of performance however the remuneration committee maintains the discretion to 
make adjustments to the measure if this is considered to be appropriate any adjustments will be disclosed in the annual report on remuneration
there is no retesting awards granted in december 2013 will vest on the following revised schedule
eps caag     6 6 between 6 and 10 10
proportion of awards vesting     nil 20 straightline vesting between 20 and 100 100
in addition to the above awards and as disclosed in the 2012 directors’ remuneration report following his appointment as cfo in february 2013 
adrian hennah was granted the following awards under the ltip  based on a fixed number of shares and share options in the form of performance 
shares and share options 
   shares over
   which awards market price at exercise face performance exercise
  date of grant granted date of award
1
 price
2
 value
3
 period  vesting period
performance shares
adrian hennah 13 february 2013 45000 £4419 na £1988550 1 jan 13 –
       31 dec 15 may 16
share options
adrian hennah 13 february 2013 90000 £4419 £4261 £3977100 1 jan 13 – may 16 –
         31 dec 15 feb 23
1
 the market price on the date of award is the closing share price on the date of grant
2
 the exercise price is based on the average closing share price over the five business days prior to the date of grant
3
 based on the market price at the date of award 44 rb annual report 2013
governance  remuneration   directors’ remuneration report 
vesting of adrian hennah’s ltip awards is dependent on the achievement of targets relating to compound average annual growth caag in eps over  
a threeyear period as summarised in the table below there is no retesting
eps caag       6 6 7 8 9
proportion of awards vesting  nil 40 60 80 100
additionally to reflect forfeited longterm incentive awards in relation to his previous employment in december 2013 adrian hennah received and in 
december 2014 will receive subject to continued employment at each relevant award date a cash lump sum equal in value to 25000 rb shares based 
on the option price for the annual lti grant made in each relevant december 
in relation to this arrangement adrian hennah was awarded a cash sum of £1195750 equating to 25000 rb shares at the option price for the annual 
lti grant made on 11 december 2013 following deductions for tax adrian hennah used the net proceeds to purchase 13629 rb shares which will be 
retained under his share ownership obligation
percentage change in ceo remuneration
the table below shows the percentage change in ceo remuneration from the prior year compared to the average percentage change in remuneration 
for all uk employees who form part of the senior management team top400 this group has been chosen as it represents the most appropriate 
comparator group for reward purposes for our ukbased group chief executive
the analysis excludes parttime employees and is based on a consistent set of employees ie the same individuals appear in the 2012 and  
2013 populations 
        ceo other employees
         change 20122013  change 20122013
base salary         4  3
taxable benefits         24  0
annual bonus         96  51
the difference in the percentage change of the annual bonus for the ceo and other employees is primarily a result of the fact that different targets are 
set for different areas of the business which are subject to different challenges
the percentage change in taxable benefits for other employees excludes international transfer benefits as this is volatile from year to year based on each 
individuals circumstance
relative importance of spend on pay
the table below shows shareholder distributions ie dividends and share buy backs and total employee pay expenditure for fy 2012 and fy 2013 
along with the percentage change in both
       2013  2012   change
       £m  £m   20122013
shareholder distributions dividends and share buy backs     1271  1451  124
total employee expenditure       1329  1220  89
exit payments made in the year audited
as outlined in last year’s remuneration report liz doherty received a lumpsum termination payment which reflected historical contractual terms and 
company policy in april 2013 totalling £705392 as disclosed last year the committee has updated the termination provisions for the ceo and the 
new cfo so that they are aligned with best practice and limited to 12 months base salary
the payment to liz doherty consisted of a severance payment of £203490 and a contractual payment in respect of onehalf of annual base salary 
£214200 and a payment in respect of onehalf of the average app payout for the previous two years £287702 
unvested share and option awards held by liz doherty at the time of her ceasing to be employed by rb will vest in may 2014 based on performance to 
31 december 2013 in accordance with the ltip rules the awards were also reduced pro rata to reflect the proportion of the performance period not 
completed at the point of cessation of employment the value of these ltip awards is £138249
payments to past directors audited
no payments were made to past directors in the year
review of past performance
the graph below shows the tsr of the company and the uk ftse 100 index over the fiveyear period from 1 january 2009 to 31 december 2013  
the index was selected on the basis of companies of a comparable size in the absence of an appropriate industry peer group in the uk the table below 
details the chief executive’s single figure of remuneration over the same period 
historical tsr performance
growth in the value of a hypothetical holding over the five years to 31 december 2013
50
75
100
125
150
175
200
dec 12 dec 11 dec 10 dec 09 dec 08 dec 07
£  value of £100 invested at 31 december 2008
75
100
125
150
175
200
225
dec 13 dec 12 dec 11 dec 10 dec 09 dec 08
£
us peer group comparison
ftse 100 comparison
reckitt benckiser      
ftse 100
historical tsr performance
growth in the value of a hypothetical holding over the 5 years 
to 31 december 2013 rb annual report 2013 45
governance  remuneration   directors’ remuneration report 
 ceo single figure of remuneration £000      2009 2010 2011 2012 2013
rakesh kapoor         £4497 £8411 £6692
bart becht       £28881 £17150 £18076  
sti award against maximum opportunity      100 76 31 53 100
lti award against maximum opportunity      100 100 100 100 40
implementation of executive director remuneration policy for 2014
base salary
base salaries are reviewed taking into account competitive practice for similar roles in the company’s remuneration peer group comprising 19 international 
companies and individual performance following its review of salary levels in late 2013 the committee approved the following base salary increases 
with effect from 1 january 2014
     base salary at base salary from percentage
executive director     1 january 2013 1 january 2014 increase
rakesh kapoor     £832000 £865000 4
adrian hennah     £550000 £561000 2
the base salary increases for executive directors takes into account performance and follows the same base salary merit increase guidelines as other  
uk employees the average salary increase was c3 effective 1 january 2014
pension
the ceo and cfo continue to receive pension contributions or equivalent cash allowances of 30 and 25 of salary respectively
performance related annual bonus
for 2014 there will be no changes to the annual bonus opportunities for executive directors bonuses will continue to be based on rb’s absolute net 
revenue growth in sterling at a constant exchange rate and absolute net income growth in sterling at constant exchange rate with the outcome 
under each of the measures combined multiplicatively to give a bonus outcome of 357x the target bonus opportunity if both stretch targets are met
following the announcement of the strategic review of rb pharmaceuticals for 2014 90 of the bonus opportunity will be based on the performance 
of the base business excluding rb pharmaceuticals and 10 of the bonus opportunity based on the performance of rb pharmaceuticals
we have not disclosed the performance targets for 2014 as we consider them to be commercially sensitive however we commit to disclosing the 
targets retrospectively in the directors remuneration report for the year ending december 2015
ltip
ltip awards for fy 2014 were granted in december 2013 details of these awards are summarised on page 43 awards to be made in december 2014 
will be disclosed in the annual report of remuneration in next year’s remuneration report 
implementation of nonexecutive director remuneration policy for 2014
chairman and nonexecutive director fees
with effect from 1 january 2013 the fee payable to the chairman of the board of directors is £375000 per annum and the basic fee payable to  
each nonexecutive is £85000 per annum of which £67000 and £15000 is paid in the form of rb shares respectively the additional fee payable for 
chairing either of the audit and remuneration committees is £30000 per annum and for acting as the senior independent director is £12000 per 
annum the deputy chairman receives an additional fee of £15000 of which £3000 is delivered in rb shares
chairman and nonexecutive director fee levels will next be reviewed in 2014 with any changes effective from 1 january 2015
executive directors’ shareholding requirements audited
the table below shows the shareholding of each executive director against their respective shareholding requirement as at 31 december 2013
      shares held options held
       
       owned performance vested performance
       outright or tested but but not tested but shareholding
       vested unvested exercised unvested guideline 
       a b c d  shares
rakesh kapoor       317537 700000 360000 1380000 600000
adrian hennah       13629 90000 – 180000 200000
rakesh kapoor has exceeded his prorated target based on tenure to date and adrian hennah has made good progress towards his target during his 
first year as an executive director to the satisfaction of the committee due to the levels of shareholdings of the current executive directors ltip awards 
that vest over the next three to five years will be required to be held until the director reaches their share ownership guideline indeed we require 
directors to build up their share ownership guideline over eight years in equal instalments this results in directors having to buy shares from their own 
resources the committee also intends to consider during the year the extent to which executives may be required to hold shares following their 
departure from the board details of the scheme interests contained in columns bd are provided in the table overleaf 46 rb annual report 2013
governance  remuneration   directors’ remuneration report 
directors’ interests in shares and options under the ltip audited
        market market
     exercised at  price at price at
    granted vested 311213  date of date of
   at during during or date of option award exercise exercise
ltip notes grant date 1113 the year the year cessation price £ £ vesting £ vesting period
liz doherty 
options 1 51211 90000 – – 90000 3209   may 14
performancebased  
restricted shares 1 9211 10000 – – 10000  3270  may 14
 1 51211 45000 – – 45000  3219  may 14
adrian hennah 
options 1 13213 – 90000 – 90000 4261   may 16–feb 23
  111213 – 90000  90000 4783   may 17–dec 23
performancebased  
restricted shares 1 13213 – 45000 – 45000  4419  may 16
 1 111213 – 45000 – 45000  4669  may 17
rakesh kapoor  
options 1 111207 120000  120000 – 2944  4590 may 11–dec 17
 2 81208 180000   180000 2729   may 12–dec 18
 2 71209 180000   180000 3165   may 13–dec 19
 1 11210 180000   180000 3464   may 14–dec 20
 1 51211 400000   400000 3209   may 15–dec 21
 1 31212 400000   400000 3914   may 16–dec 22
 3 111213  400000  400000 4783   may 17–dec 23
performancebased  
restricted shares 1 71209 60000  60000   3180 4677 may 13
 1 11210 60000   60000  3408  may 14
 1 51211 200000   200000  3219  may 15
 1 31212 200000   200000  3966  may 16
 3 111213  240000  240000  4669  may 17
      
    granted exercised lapsed  option market
   at during during during at price price at  exercise
sharesave scheme  grant date 1113 the year the year the year 311213  £ exercise £ period
rakesh kapoor   8908 796    796 2192  feb 16–july 16
adrian hennah  4913  403   403 3720  feb 19–july 19
notes
1 vesting of ltip is subject to the achievement of the following compound average annual growth caag in adjusted eps over a threeyear period
eps caag for awards granted in december 0712 6 6 7 8 9
proportion of awards vesting  nil 40 60 80 100
2 options which are vested but unexercised
3 vesting of ltip is subject to the achievement of the following compound average annual growth caag in adjusted eps over a threeyear period
eps caag for awards granted in december 13 6 6 7 8 9 10
proportion of awards vesting  nil 20 40 60 80 100
  details of liz doherty outstanding share ltip share awards and option grants including vesting  and prorated awards based on cessation of 
employment are included on page 42 former cfo’s ltip awards rb annual report 2013 47
financial statements   independent auditors’ report 
independent auditors’ report to the  
members of reckitt benckiser group plc
reporting units comprising the group’s 
operating businesses in these regions and 
centralised functions 
in establishing the overall approach to the 
group audit we determined the type of work 
that needed to be performed at reporting units 
by us as the group engagement team or 
component auditors within pwc uk and from 
other pwc network firms operating under our 
instruction where work was performed by 
component auditors we determined the level 
of involvement we needed to have in the audit 
work at those reporting units to be able to 
conclude whether sufficient appropriate audit 
evidence had been obtained as a basis for our 
opinion on the group financial statements as  
a whole 
accordingly we identified 58 reporting units 
out of the group’s 699 reporting units which 
in our view required an audit of their complete 
financial information either due to their size  
or their risk characteristics these 58 reporting 
units accounted for 74 of the group’s profit 
before tax and 75 of the group’s revenue 
our audit work at these reporting units 
together with additional procedures performed 
at the group level gave us the evidence we 
needed for our opinions on the group financial 
statements as a whole
areas of particular audit focus 
in preparing the financial statements  
the directors made a number of subjective 
judgements for example in respect of 
significant accounting estimates that involved 
making assumptions and that consider future 
events that are inherently uncertain we 
primarily focused our work in these areas  
by assessing the directors’ judgements  
against available evidence forming our own 
independent judgements and evaluating the 
disclosures in the financial statements
in our audit we tested and examined 
information using sampling and other auditing 
techniques to the extent we considered 
necessary to provide a reasonable basis for  
us to draw conclusions we obtained audit 
evidence through testing the effectiveness  
of controls substantive procedures or a 
combination of both 
we considered the following areas to be  
those that required particular focus in the 
current year this is not a complete list of all 
risks or areas of focus identified by our audit 
we discussed these areas of focus with the 
audit committee their report on those matters  
that they considered to be significant issues in 
relation to the financial statements is set out  
on page 31 
what an audit of financial statements 
involves 
we conducted our audit in accordance with 
international standards on auditing uk and 
ireland ‘isas uk  ireland’ an audit  
involves obtaining evidence about the amounts 
and disclosures in the financial statements 
sufficient to give reasonable assurance that  
the financial statements are free from material 
misstatement whether caused by fraud or 
error this includes an assessment of
•	 	 whether	the	accounting	policies	ar e	
appropriate to the group’s circumstances 
and have been consistently applied and 
adequately disclosed
•	 	 the	r easonableness	of	significant	accounting	
estimates made by the directors and 
•	 	 the	overall	pr esentation	of	the	financial	
statements 
in addition we read all the financial and 
nonfinancial information in the annual report 
to identify material inconsistencies with the 
audited group financial statements and to 
identify any information that is apparently 
materially incorrect based on or materially 
inconsistent with the knowledge acquired by 
us in the course of performing the audit if  
we become aware of any apparent material 
misstatements or inconsistencies we consider 
the implications for our report
overview of our audit approach
materiality 
we set certain thresholds for materiality these 
helped us to determine the nature timing and 
extent of our audit procedures and to evaluate 
the effect of misstatements both individually 
and on the financial statements as a whole 
based on our professional judgement we 
determined materiality for the group financial 
statements as a whole to be £128m this is 
calculated as being 5 of profit before tax 
adjusted for exceptional items 
we agreed with the audit committee that  
we would report to them misstatements 
identified during our audit above £6m as  
well as misstatements below that amount  
that in our view warranted reporting for 
qualitative reasons
overview of the scope of our audit 
the group is primarily structured along  
three geographic regions being lapac latin 
america north asia south east asia australia 
and new zealand rumea russia and the  
cis middle east north africa turkey and 
subsaharan africa ena europe and north 
america with separate segments for the food 
and rb pharmaceuticals businesses the group 
financial statements are a consolidation of 
report on the group financial 
statements
our opinion
in our opinion the group financial statements 
defined below
•	 	 give	a	true	and	fair	view	of	the	state	of	the	
group’s affairs as at 31 december 2013 and 
of the group’s profit and cash flows for the 
year then ended
•	 	 have	been	pr operly	pr epar ed	in	accor dance	
with international financial reporting 
standards ifrss as adopted by the 
european union and
•	 	 have	been	pr epar ed	in	accor dance	with	the	
requirements of the companies act 2006 
and article 4 of the ias regulation
this opinion is to be read in the context of 
what we say in the remainder of this report
separate opinion in relation to ifrss as 
issued by the iasb  
as explained in note 1 to the financial 
statements the group in addition to applying 
ifrss as adopted by the european union has 
also applied ifrss as issued by the international 
accounting standards board iasb 
in our opinion the group financial statements 
comply with ifrss as issued by the iasb
what we have audited
the group financial statements which are 
prepared by reckitt benckiser group plc 
comprise
•	 	 the	gr oup	balance	sheet	as	at	31	december	
2013
•	 	 the	gr oup	income	statement	and	statement	
of comprehensive income for the year  
then ended
•	 	 the	gr oup	statement	of	changes	in	equity	
and cash flow statement for the year then 
ended and
•	 	 the	notes	to	the	gr oup	financial	 
statements which include a summary of 
significant accounting policies and other 
explanatory information
the financial reporting framework that has 
been applied in their preparation comprises 
applicable law and ifrss as adopted by the 
european union
certain disclosures required by the financial 
reporting framework have been presented 
elsewhere in the annual report and financial 
statements the ‘annual report’ rather than in 
the notes to the financial statements these are 
crossreferenced from the financial statements 
and are identified as audited 48 rb annual report 2013
financial statements   independent auditors’ report 
area of focus how	the	scope	of	our	audit	addr essed	the	ar ea	of	focus
trade spend accruals
the business enters into a number of sales agreements with 
customers that have a wide range of terms promotions rebates  
 discounts estimates of the trade obligations in connection  
with these agreements trade spend accruals are material to the 
balance sheet 
we focused on this area because of the high level of judgement 
required in accounting for trade spend due to varying contractual 
terms and the fact that elements of the calculation are subjective 
and may not be finalised until after the year end accordingly the 
focus of our work includes the completeness and valuation of  
the estimates 
we agreed trade spend terms to underlying customer contracts and assessed 
whether estimates of trade spend were consistent with the terms set out in 
the contracts we evaluated movements in trade spend estimates based on 
the accuracy of historic estimates as well as against expectations derived from 
underlying contracts to ascertain whether current year accruals were in line 
with the obligations we also compared historical accuracy of prior year trade 
spend accruals to the actual liabilities incurred in addition we tested a 
number of controls relating to trade spend accruals covering items such as 
the segregation of duties over the creation and approval of the accruals and 
both the review and resolution of variations between expected and actual 
trade spend deductions awarded
provision for uncertain tax exposures 
the group has material tax exposures relating to potential or existing 
challenges by tax authorities in a number of territories around the 
world these arise for a number of reasons including transactions 
undertaken where the applicable tax treatment is uncertain or 
judgemental or due to transfer pricing arrangements arising from 
centralised functions 
we focused on this area because of the level of judgement required 
to be applied by management in quantifying appropriate provisions 
against these exposures changes in assumptions could materially 
impact the amounts recorded in the financial statements  
 
we obtained a detailed understanding of the group’s tax strategy and 
assessed key technical tax issues and risks related to business and legislative 
developments we obtained explanations and evidence from management 
regarding the tax treatments applied to material transactions and an 
understanding of the transfer pricing policy within the group we challenged 
the key assumptions particularly in relation to significant transactions 
undertaken in the period and where there have been significant 
developments in communications with local tax authorities as well as 
undertaking a critical assessment of evidence that supports any provisions
acquisition of bms collaboration agreement
we focused on this area because it was a complex transaction which 
required the directors to exercise a significant level of judgement 
particularly around the valuation of the assets and liabilities acquired 
and the timing of their recognition 
refer also to note 26 to the financial statements
we evaluated the directors’ assessment of this transaction as a business 
combination and discussed the rationale for the accounting principles applied 
around the timing of recognition of certain assets and liabilities we obtained 
management’s valuations of the acquired assets and liabilities and evaluated 
these by comparing management’s cash flow forecasts to board approved 
plans in addition we challenged the assumptions supporting the acquisition 
synergies and tax benefits by comparing these to supporting third party 
market data as well as comparing forecasts to historic performance 
we performed sensitivity analysis over key drivers within the cash flow 
forecasts including revenue operating profit and estimated synergies as  
well as the key assumptions around discount and growth rates we then 
considered the likelihood of such movement in these key assumptions arising 
in assessing the appropriateness of the overall valuations 
risk of fraud in revenue recognition 
isas uk  ireland require us to consider the risk of fraud in  
revenue recognition 
as a consumer goods group a large number of sales agreements are 
entered into with customers with a wide range of terms covering 
promotions rebates and discounts which increases complexity in 
addition current economic conditions in certain territories can place 
increased pressure on management to meet performance targets 
accordingly there is a risk that revenue could be misstated 
we focused our procedures on the occurrence of transactions and whether 
they were recorded in the period in which the group became entitled to 
record revenue we performed a combination of testing internal controls 
around revenue recognition and substantive testing of revenue recorded 
during the year using data analysis and sampling techniques we tested sales 
transactions and credit notes raised around the year end and also reviewed 
significant customer contracts in order to assess whether the conditions for 
revenue had been met we also tested manual journals posted to record 
revenue to determine whether those postings were consistent with the 
group’s revenue recognition policy
risk of management override of internal controls 
isas uk  ireland require that we consider this 
we assessed the overall control environment of the group including the 
‘whistleblowing’ arrangements we interviewed senior management and the 
group’s internal audit function and specifically asked for their views on fraud 
and instances of fraud noted during the year we examined the significant 
accounting estimates and judgements relevant to the financial statements  
for evidence of bias by the directors that may represent a risk of material 
misstatement due to fraud we also tested manual journal entries and 
incorporated an element of unpredictability in the timing of our work  
and samples in our testing plans rb annual report 2013 49
responsibilities for the financial 
statements and the audit
our responsibilities and those of  
the directors 
as explained more fully in the statement of 
directors’ responsibilities set out on page 33 
the directors are responsible for the preparation 
of the group 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 group financial statements  
in accordance with applicable law and isas  
uk  ireland those standards require us  
to comply with the auditing practices board’s 
ethical standards for auditors 
this report including the opinions has been 
prepared for and only for the company’s 
members as a body in accordance with  
chapter 3 of part 16 of the companies act 
2006 and for no other purpose we do not  
in giving these opinions accept or assume 
responsibility for any other purpose or to any 
other person to whom this report is shown or 
into whose hands it may come save where 
expressly agreed by our prior consent in writing
other matter
we have reported separately on the  
parent company financial statements of  
reckitt benckiser group plc for the year ended  
31 december 2013 and on the information  
in the directors’ remuneration report that is 
described as having been audited
mark gill senior statutory auditor
for and on behalf of  
pricewaterhousecoopers llp 
chartered accountants and statutory auditors 
london  
7 march 2014
corporate governance statement
under the listing rules we are required to 
review the part of the corporate governance 
statement relating to the company’s 
compliance with nine provisions of the uk 
corporate governance code ‘the code’  
we have nothing to report having performed 
our review
on page 33 of the annual report as required 
by the code provision c11 the directors state 
that they consider the annual report taken as a 
whole to be fair balanced and understandable 
and provides the information necessary for 
members to assess the group’s performance 
business model and strategy on page 31  
as required by c38 of the code the audit 
committee has set out the significant issues 
that it considered in relation to the financial 
statements and how they were addressed 
under isas uk  ireland we are required  
to report to you if in our opinion
•	 	 the	statement	given	by	the	dir ectors	is	
materially inconsistent with our knowledge 
of the group acquired in the course of 
performing our audit or
•	 	 the	section	of	the	annual	report	describing	
the work of the audit committee does not 
appropriately address matters communicated 
by us to the audit committee
we have no exceptions to report arising from 
this responsibility
other information in the annual report
under isas uk  ireland we are required  
to report to you if in our opinion information 
in the annual report is
•	 	 materially	inconsistent	with	the	information	
in the audited group financial statements or
•	 	 appar ently	materially	incorr ect	based	on	or	
materially inconsistent with our knowledge 
of the group acquired in the course of 
performing our audit or
•	 is	otherwise	misleading
we have no exceptions to report arising from 
this responsibility
going concern
under the listing rules we are required to 
review the directors’ statement set out on 
page 33 in relation to going concern we have 
nothing to report having performed our review
as noted in the directors’ statement the 
directors have concluded that it is appropriate 
to prepare the group’s financial statements 
using the going concern basis of accounting 
the going concern basis presumes that the 
group has adequate resources to remain in 
operation and that the directors intend it to  
do so for at least one year from the date the 
financial statements were signed as part of  
our audit we have concluded that the directors’ 
use of the going concern basis is appropriate
however 	because	not	all	futur e	events	or	
conditions can be predicted these statements 
are not a guarantee as to the group’s ability to 
continue as a going concern
opinion on matters prescribed by 
the companies act 2006
in our opinion the information given in the 
strategic report and the report of the directors 
for the financial year for which the group 
financial statements are prepared is consistent 
with the group financial statements
other matters on which we are 
required to report by exception
adequacy of information and  
explanations received
under the companies act 2006 we are 
required to report to you if in our opinion  
we have not received all the information and 
explanations we require for our audit we  
have no exceptions to report arising from  
this responsibility
directors’ remuneration
under the companies act 2006 we are 
required to report to you if in our opinion 
certain disclosures of directors’ remuneration 
specified by law have not been made and 
under the listing rules we are required to 
review certain elements of the report to 
shareholders by the board on directors’ 
remuneration we have no exceptions to  
report arising from these responsibilities
financial statements   independent auditors’ report  50 rb annual report 2013
financial statements   group income statement  group statement of comprehensive income
           2012
         2013  restated
1
for the year ended 31 december      notes  £m  £m
net revenue       2  10043  9567
cost of sales        3  4074  4029
gross profit         5969  5538
net operating expenses       3  3624  3096
operating profit       2  2345  2442
adjusted operating profit         2616  2577
exceptional items       3  271  135
operating profit         2345  2442
finance income       6  25  26
finance expense       6  56   60
net finance expense         31   34
profit on ordinary activities before taxation       2314  2408
tax on profit on ordinary activities       7  574  583
net income         1740  1825
attributable to noncontrolling interests        1  4 
attributable to owners of the parent        1739  1821
net income         1740  1825
earnings per ordinary share
basic earnings per share       8  2421p  2514p
diluted earnings per share       8  2385p  2484p
1
 refer to note 1 for further details
           2012
         2013  restated
1
for the year ended 31 december      notes  £m  £m
net income         1740  1825
other comprehensive expense  income 
items that may be reclassified to profit or loss in subsequent years
net exchange adjustments on foreign currency translation net of tax    7  369  255
gains on net investment hedges       7  6  –
gains on cash flow hedges net of tax      7  13  3
reclassification of foreign currency translation reserves on disposal of subsidiary net of tax  7  –  9
         350  243
items that will not be reclassified to profit or loss in subsequent years
remeasurements of defined benefit pension plans net of tax    7  41  41
         41  41
other comprehensive expense net of tax        309  284
total comprehensive income         1431  1541
attributable to noncontrolling interests        1   1
attributable to owners of the parent        1430  1542
         1431  1541
1
 refer to note 1 for further details
group income statement
group statement of comprehensive income rb annual report 2013 51
financial statements   group balance sheet
           2012
         2013  restated
1
as at 31 december       notes  £m  £m
assets
noncurrent assets
goodwill and other intangible assets      9  11141  11162
property plant and equipment       10  761  736
deferred tax assets       11  47  49
available for sale financial assets       14  –  2
retirement benefit surplus       21  50  27
other receivables       13  249  33
         12248  12009
current assets
inventories       12  746  735
trade and other receivables       13  1306  1407
derivative financial instruments       14  22  4
current tax receivables         17  20
available for sale financial assets       14  2  4
cash and cash equivalents       15  808  887
         2901  3057
total assets         15149  15066
liabilities
current liabilities
borrowings       16  2169  3271
provisions for liabilities and charges       17  215  104
trade and other payables       20  2915  2842
derivative financial instruments       14  159  43
current tax liabilities         203    203
         5661   6463
noncurrent liabilities
borrowings       16  598  3
deferred tax liabilities       11  1702  1824
retirement benefit obligations       21  301  426
provisions for liabilities and charges       17  156  100
noncurrent tax liabilities         329   311
other noncurrent liabilities         66   17
          3152  2681
total liabilities         8813   9144 
net assets         6336  5922
equity
capital and reserves
share capital       22  74  73
share premium          243  184
merger reserve       24  14229  14229
hedging	r eserve	 	 	 	 	 	 	 24	 	 15  2
foreign currency translation reserve       24  494  131
retained earnings         20725  20022
         6334  5921
noncontrolling interests         2  1
total equity         6336  5922
1
 refer to note 26 for further details
the financial statements on pages 50 to 84 were approved by the board and signed on its behalf on 7 march 2014 by
adrian bellamy rakesh kapoor
director director
group balance sheet 52 rb annual report 2013
financial statements   group statement of changes in equity
       foreign  total
       currency  attributable non
	 	 	 shar e	 shar e		 merger	 hedging	 translation	 retained	 	to	owners	of	 contr olling	 t otal
   capital premium reserve reserve reserve earnings the parent interests equity
restated
1
  notes £m £m £m £m £m £m £m £m £m
balance at 1 january 2012   73 86 14229 1 110 19672 5711 70 5781
comprehensive income
net income        1821 1821 4 1825
other comprehensive expense  income 
remeasurements of defined
benefit plans net of tax  7      41 41  41
gains on cash flow hedges net of tax 7    3   3  3
net exchange losses on foreign 
currency translation net of tax  7     250  250 5 255
reclassification of foreign currency 
translation reserves on disposal
of subsidiary net of tax  7     9  9  9
total other comprehensive income  expense  – – – 3 241 41 279 5 284
total comprehensive income  expense  – – – 3 241 1780 1542 1 1541
transactions with owners
proceeds from share issue    98     98  98
sharebased payments  23      49 49  49
current tax on share awards        23 23  23
shares repurchased and held in treasury 22      535 535  535
dividends   27      916 916 4 920
acquisition of noncontrolling interest       51 51 55 106
reclassification of noncontrolling
interest on disposal          9 9
total transactions with owners   – 98 – – – 1430 1332 68 1400
balance at 31 december 2012   73 184 14229 2 131 20022 5921 1 5922
comprehensive income
net income        1739 1739 1 1740
other comprehensive income  expense
remeasurements of defined benefit
plans net of tax  7      41 41  41
gains on cash flow hedges net of tax 7    13   13  13
net exchange losses on foreign 
currency translation net of tax  7     369  369  369
gains on net investment hedges       6  6  6
total other comprehensive income  expense  – – – 13 363 41 309 – 309
total comprehensive income  expense  – – – 13 363 1780 1430 1 1431
transactions with owners
proceeds from share issue  22 1 59     60  60
sharebased payments  23      55 55  55
current tax on share awards        16 16  16
deferred tax on share awards        44 44  44
shares repurchased and held in treasury 22      279 279  279
treasury shares reissued        79 79  79
dividends  27      992 992  992
total transactions with owners    1 59 – – – 1077 1017 – 1017
balance at 31 december 2013   74 243 14229 15 494 20725 6334 2 6336
1
 refer to note 1 for further details
group statement of changes in equity rb annual report 2013 53
financial statements   group cash flow statement
           2012
         2013  restated
1
for the year ended 31 december      notes  £m  £m
cash flows from operating activities
operating profit         2345  2442
depreciation amortisation and impairment        171  148
fair value lossesgains          1   7
gain on sale of property plant and equipment and intangible assets      –  13
gain on sale of businesses       26  –  32
increasedecrease in inventories         61  19
decreaseincrease in trade and other receivables       32  16
decrease in payables and provisions         18  167
noncash exceptional items         231  
sharebased payments         55  49
cash generated from operations         2756  2423
interest paid         49  34
interest received         25  27
tax paid         611  528
net cash generated from operating activities       2121  1888
cash flows from investing activities
purchase of property plant and equipment        200   166
purchase of intangible assets          25   11
disposal of property plant and equipment        9  13
disposal of intangible assets          –  9
acquisition of businesses net of cash acquired      26  418  877
disposal of businesses net of cash disposed        –  81
maturitypurchase of shortterm investments        2  7
maturity of longterm investments         2  14
net cash outflow on deconsolidation of a subsidiary       –  6
net cash used in investing activities        630   936
cash flows from financing activities
proceeds from issue of ordinary shares      22  60  98
shares purchased and held in treasury      22  279  535
treasury shares reissued         79  –
proceeds from borrowings         637  887
repayments of borrowings         1002   112
dividends paid to owners of the parent      27  992  916
dividends paid to noncontrolling interest        –  4
acquisition of noncontrolling interest      25  28  106
net cash used in financing activities        1525   688
net decreaseincrease in cash and cash equivalents       34  264
cash and cash equivalents at beginning of the year       882  634
exchange losses         43  16
cash and cash equivalents at end of the year       805  882
cash and cash equivalents comprise
cash and cash equivalents       15  808  887
overdrafts       16  3  5
         805  882
 
r econciliation of net cash flows from operations
net cash generated from operating activities        2121  1888
net purchases of property plant and equipment       191   153
net cash flow from operations         1930  1735
1
 refer to note 1 for further details 
group cash flow statement 54 rb annual report 2013
financial statements   notes to the financial statements
11p for the year ended 31 december 2012  
as a result of the adoption of ias19 revised 
the cash flow statement was restated as a 
result of the change in operating profit with an 
offsetting decrease in payables and provisions
a number of new standards amendments and 
interpretations are effective for annual periods 
beginning after 1 january 2014 and have not 
yet been applied in preparing these financial 
statements none of these are expected to have 
a significant effect on the financial statements 
of the group
basis of consolidation
the consolidated financial statements include 
the results of reckitt benckiser group plc  
a company registered in the uk and all its 
subsidiary undertakings made up to the same 
accounting date subsidiary undertakings are 
those entities controlled by reckitt benckiser 
group plc control exists where the group is 
exposed to or has the rights to variable returns 
from its involvement with the investee and has 
the ability to use its power over the investee to 
affect its returns 
in the case of acquisitions and disposals of 
businesses the results of trading are consolidated 
from or to the date upon which control passes
intercompany transactions balances and 
unrealised gains on transactions between 
group companies have been eliminated on 
consolidation unrealised losses have also been 
eliminated to the extent that they do not 
represent an impairment of a transferred asset 
subsidiaries’ accounting policies have been 
changed where necessary to ensure consistency 
with the policies adopted by the group 
operating segments
operating segments are reported in a manner 
consistent with the internal reporting provided 
to the chief operating decisionmaker the  
chief operating decisionmaker codm who is 
responsible for allocating resources and assessing 
performance of the operating segments has 
been identified as the executive committee 
specific items of income and expense reported 
to the executive committee outside of the 
individual segment financial information are 
shown in the corporate segment
foreign currency translation
items included in the financial statements  
of each of the group’s entities are measured 
using the currency of the primary economic 
environment in which the entity operates the 
functional currency the consolidated financial 
statements are presented in sterling which  
is the group’s presentation currency
in subsidiaries associates joint arrangements 
and unconsolidated structured entities these 
three standards are not mandatory under ifrs 
as adopted by the eu for the group until  
1 january 2014 however the group has 
decided to early adopt the standards as of  
1 january 2013 the impact on the group of 
applying these standards is not significant
ifrs 13 explains how to measure fair value and 
enhances fair value disclosures the standard 
does not significantly change the measurement 
of fair value but codifies it in one place the 
impact on the group is not significant
the amendments under ias 36 impairment of 
assets in respect of the disclosure requirements 
have been early adopted
ias 19 revised replaces the interest cost on 
pension scheme liabilities and expected return 
on pension scheme assets with a net interest 
amount that is calculated by applying the 
discount rate used to measure the defined 
benefit obligation at the beginning of the 
period to the net defined benefit liabilityasset
in addition the group now treats the net 
pension scheme interest amount as finance 
incomeexpense previously the interest cost on 
pension scheme liabilities and expected return 
on pension scheme assets were classified in 
either cost of sales or net operating expenses 
the directors believe that this change provides 
more relevant information about the 
performance of the group and aligns the 
group’s accounting policies with common 
industry practice 
these restatements had no impact on the 
balance sheet and the following impact on  
the income statement and statement of 
comprehensive income
 year ended
 31 december 2012 
 £m
group income statement
decrease in cost of sales 1
decrease in net operating expenses 6
increase in operating profit 7
increase in finance expense 19
decrease in tax on profit on  
ordinary activities 4
decrease in net income 8
group statement of comprehensive income
decrease in actuarial losses net of tax 8
increase in other comprehensive income 8
net impact on total  
comprehensive income –
 
basic diluted adjusted basic and adjusted 
diluted earnings per share decreased by  
1 accounting policies
the principal accounting policies adopted in the 
preparation of these financial statements are 
set out below unless otherwise stated these 
policies have been consistently applied to all  
the years presented
basis of preparation and changes in 
accounting policy
these financial statements have been prepared 
in accordance with eu endorsed international 
financial reporting standards ifrss and  
with those parts of the companies act 2006 
applicable to companies reporting under ifrs 
the financial statements are also in compliance 
with ifrs as issued by the international 
accounting standards board these financial 
statements have been prepared under the 
historical cost convention as modified by  
the revaluation of certain financial assets and 
liabilities including derivative instruments at 
fair value through profit or loss a summary  
of the group’s more important accounting 
policies is set out below
the directors continue to adopt the going 
concern basis for accounting in preparing  
these financial statements the directors have  
a reasonable expectation that the group has 
adequate resources to continue in operational 
existence for the foreseeable future 
the preparation of financial statements that 
conform to ifrs requires management to make 
estimates and assumptions that affect the 
reported amounts of assets and liabilities at the 
balance sheet date and revenue and expenses 
during the reporting period although these 
estimates are based on management’s best 
knowledge at the time actual amounts may 
ultimately differ from those estimates
the group applies for the first time amendments 
to ias 1 presentation of items of other 
comprehensive income ifrs 10 consolidated 
financial statements ifrs 11 joint arrangements 
ifrs 12 disclosure of interests in other entities 
ifrs 13 fair value measurement and ias 19 
revised employee benefits
amendments to ias 1 require items of other 
comprehensive income that may be reclassified 
to profit or loss to be presented separately  
from items that will never be reclassified the 
statement of comprehensive income has been 
revised accordingly
ifrs 10 replaces previous guidance on control 
and consolidation ifrs 11 requires joint 
arrangements to be accounted for as a joint 
operation or as a joint venture depending on 
the rights and obligations of each party to the 
arrangement and ifrs 12 requires enhanced 
disclosures of the nature risks and financial 
effects associated with the group’s interests  
notes to the financial statements rb annual report 2013 55
financial statements   notes to the financial statements
to the cash generating unit or group of cash 
generating units to which they relate and are 
tested annually for impairment
the directors also review the useful economic 
life of brands annually to ensure that these 
lives are still appropriate if a brand is 
considered to have a finite life its carrying 
value is amortised over that period
payments made in respect of product 
registration acquired and reacquired 
distribution rights are capitalised where the 
rights comply with the above requirements  
for recognition of acquired brands if the 
registration or distribution rights are for a 
defined time period the intangible asset is 
amortised over that period if no time period  
is defined the intangible asset is treated in  
the same way as acquired brands
acquired computer software licences are 
capitalised at cost these costs are amortised on 
a straight line basis over a period of seven years 
for enterprise resource planning systems and 
five years or less for all other software licences
research and development
research expenditure is written off in the year 
in which it is incurred
development expenditure is written off in the 
year in which it is incurred unless it meets the 
requirements of ias 38 to be capitalised and 
then amortised over the useful life of the 
developed product 
exceptional items
where material nonrecurring expenses or 
income are incurred during a period these 
items are disclosed as exceptional items in the 
income statement examples of such items are
•	 	 restructuring	and	other	expenses	r elating	to	
the integration of an acquired business and 
related expenses for reconfiguration of the 
group’s activities
•	 	 impairments 	 of 	 curr ent 	 and 	 noncurr ent 	 assets
•	 gainslosses	on	disposal	of	businesses
•	 acquisition	r elated	costs
•	 	 costs	arising	as	a	r esult	of	material	 
and nonrecurring regulatory and  
litigation matters
the group also presents an alternative adjusted 
earnings per share calculation to exclude the 
impact of the exceptional items
management believes that the use of adjusted 
measures such as adjusted operating profit 
adjusted net income and adjusted earnings per 
share provide additional useful information on 
underlying trends to shareholders
impairment of assets
assets that have indefinite lives are tested 
annually for impairment all assets are  
tested for impairment if there is an event or 
circumstance that indicates that their carrying 
value may not be recoverable if an asset’s 
carrying value exceeds its recoverable amount 
an impairment loss is recognised in the income 
statement the recoverable amount is the 
higher of the asset’s fair value less costs of 
disposal and its value in use 
where the measurement of the fair value of 
identifiable net assets acquired is incomplete  
at the end of the reporting period in which  
the combination occurs the group will report 
provisional fair values final fair values are 
determined within a year of the acquisition 
date and retrospectively applied
the excess of the consideration transferred and 
the amount of any noncontrolling interest over 
the fair value of the identifiable assets liabilities 
and contingent liabilities acquired including 
intangibles is recorded as goodwill
the consideration transferred is measured  
as the fair value of the assets given equity 
instruments issued if any and liabilities 
assumed or incurred at the date of acquisition 
acquisition related costs are expensed as incurred 
the results of the subsidiaries acquired are 
included in the group financial statements  
from the acquisition date
for acquisitions before 1 january 2010 goodwill 
represents the excess of the cost of acquisition 
over the fair value of the identifiable assets 
liabilities and contingent liabilities with acquisition 
related costs capitalised as part of the cost  
of acquisition 
noncontrolling interests
on an acquisitionbyacquisition basis the 
noncontrolling interest is measured at either 
fair value or a proportionate share of the 
acquiree’s net assets 
purchases from noncontrolling interests are 
accounted for as transactions with the owners 
and therefore no goodwill is recognised as  
a result of such transactions 
goodwill and intangible fixed assets
goodwill on acquisitions of subsidiaries since  
4 january 1998 is included in intangible assets 
goodwill written off to reserves prior to this date 
has not been reinstated goodwill is allocated  
to the cash generating unit or group of cash 
generating units to which it relates and is tested 
annually for impairment goodwill is carried  
at cost less accumulated impairment losses
separately acquired brands are shown at cost 
less accumulated amortisation and impairment 
brands acquired as part of a business combination 
are recognised at fair value at the acquisition 
date where they are separately identifiable 
brands are amortised over their useful 
economic life except when their life is 
determined as being indefinite
applying indefinite lives to certain acquired 
brands is appropriate due to the stable 
longterm nature of the business and the 
enduring nature of the brands a core element 
of the group’s strategy is to invest in building 
its brands through an ongoing programme of 
product innovation and sustained and rising 
marketing investment within the group a 
brand typically comprises an assortment of base 
products and more innovative products both 
contribute to the enduring nature of the brand 
the base products establish the longterm 
positioning of the brand while a succession of 
innovations attracts ongoing consumer interest 
and attention indefinite life brands are allocated 
1 accounting policies continued 
foreign currency transactions are translated into 
the functional currency using exchange rates 
prevailing at the dates of the transactions 
foreign exchange gains and losses resulting 
from the settlement of foreign currency 
transactions and from the translation at year 
end exchange rates of monetary assets and 
liabilities denominated in foreign currencies are 
recognised in the income statement except 
where hedge accounting is applied
the financial statements of overseas subsidiary 
undertakings are translated into sterling on the 
following basis
•	 	 assets	and	liabilities	at	the	rate	of	exchange	
ruling at the year end date
•	 	 pr ofit	and	loss	account	items	at	the	average	
rate of exchange for the year
exchange differences arising from the translation 
of the net investment in foreign entities and  
of borrowings and other currency instruments 
designated as hedges of such investments  
are taken to equity on consolidation
property plant and equipment
property plant and equipment are stated  
at cost less accumulated depreciation and 
impairment with the exception of freehold 
land which is shown at cost less impairment 
cost includes expenditure that is directly 
attributable to the acquisition of the asset 
except for freehold land and assets under 
construction the cost of property plant and 
equipment is written off on a straightline basis 
over the period of the expected useful life of 
the asset for this purpose expected lives are 
determined within the following limits
•	 fr eehold	buildings	not	mor e	than	50	years	
•	 	 leasehold	land	and	buildings	the	lesser	 
of 50 years or the life of the lease and
•	 	 owned	plant	and	equipment	not	mor e	than	
15 years except for environmental assets 
which are not more than 20 years 
in general production plant and equipment 
and office equipment are written off over  
ten years or less motor vehicles and computer 
equipment over five years or less
assets’ residual values and useful lives are 
reviewed and adjusted if necessary at each 
balance sheet date property plant and 
equipment are reviewed for impairment if 
events or changes in circumstances indicate 
that the carrying amount may not be 
appropriate freehold land is reviewed for 
impairment on an annual basis
gains and losses on the disposal of property 
plant and equipment are determined by 
comparing the asset’s carrying value with  
any sale proceeds and are included in the 
income statement
business combinations
the acquisition method is used to account  
for the acquisition of subsidiaries identifiable 
net assets acquired including intangibles in  
a business combination are measured initially  
at their fair values at the acquisition date  56 rb annual report 2013
financial statements   notes to the financial statements
the net interest amount is calculated by 
applying the discounted rate used to measure 
the defined benefit obligation at the beginning 
of the period to the net defined benefit  
liabilityasset
the net pension scheme interest is presented as 
finance incomeexpense
postretirement benefits other  
than pensions
some group companies provide postretirement 
medical care to their retirees the costs of 
providing these benefits are accrued over the 
period of employment and the liability 
recognised in the balance sheet is calculated 
using the projected unit credit method and  
is discounted to its present value and the fair 
value of any related asset is deducted
employee share schemes
incentives in the form of shares are provided  
to employees under share option and restricted 
share schemes any shortfall between the cost 
to the employee and the fair market value of 
the awards at date of grant is charged to the 
income statement over the period to which  
the performance criteria relate with the credit 
taken directly to retained earnings additional 
employer costs in respect of options and 
awards are charged to the income statement 
over the same period with the credit included  
in payables where awards are contingent  
upon nonmarket performance conditions an 
assessment of the likelihood of these conditions 
being achieved is made at the end of each 
reporting period and reflected in the 
accounting entries made
the proceeds received net of any directly 
attributable transaction costs are credited to 
share capital and share premium when the 
options are exercised
provisions
provisions are recognised when the group has  
a present legal or constructive obligation as a 
result of past events it is more likely than not 
that there will be an outflow of resources to 
settle that obligation and the amount can be 
reliably estimated provisions are valued at the 
present value of the directors’ best estimate of 
the expenditure required to settle the obligation 
at the balance sheet date
derivative financial instruments and 
hedging activity
the group may use derivatives to manage its 
exposures to fluctuating interest and foreign 
exchange rates these instruments are initially 
recognised at fair value on the date the 
contract is entered into and are subsequently 
remeasured at their fair value the method of 
recognising the resulting gain or loss depends 
on whether the derivative is designated as a 
hedging instrument and if so the nature of the 
item being hedged derivatives that qualify for 
hedge accounting are treated as a hedge of  
a highly probable forecast transaction cash 
flow hedge
current tax is the expected tax payable on  
the taxable income for the year using tax  
rates enacted or substantively enacted at the 
balance sheet date and any adjustment to  
tax payable in respect of previous years
deferred tax is provided in full using the 
liability method on temporary differences 
arising between the tax bases of assets and 
liabilities and their carrying amounts in the 
consolidated financial statements the deferred 
tax is not accounted for if it arises from the 
initial recognition of an asset or liability in a 
transaction other than a business combination 
that affects neither accounting nor taxable 
profit or loss at that time deferred tax is 
determined using tax rates and laws that have 
been enacted or substantively enacted by the 
balance sheet date and are expected to apply 
when the deferred tax asset or liability is 
settled deferred tax assets are recognised to 
the extent that it is probable that future taxable 
profit will be available against which the 
temporary differences can be utilised
deferred tax is provided on temporary 
differences arising on investments in subsidiaries 
except where the investor is able to control the 
timing of temporary differences and it is probable 
that the temporary difference will not reverse  
in the foreseeable future
deferred tax assets and liabilities within the 
same tax jurisdiction are offset where there is  
a legally enforceable right to offset current tax 
assets against current tax liabilities and where 
there is an intention to settle these balances  
on a net basis
pension commitments
group companies operate defined contribution 
and funded and unfunded defined benefit 
pension schemes
the cost of providing pensions to employees 
who are members of defined contribution 
schemes is charged to the income statement  
as contributions are made the group has  
no further payment obligations once the 
contributions have been paid
the liability or surplus recognised in the balance 
sheet in respect of defined benefit pension 
plans is the present value of the defined benefit 
obligation at the balance sheet date less the 
fair value of the plan assets the defined 
benefit obligation is calculated annually by 
independent actuaries using the projected unit 
credit method the present value of the defined 
benefit obligation is determined by discounting 
the estimated future cash flows by the yield on 
highquality corporate bonds denominated in 
the currency in which the benefits will be paid 
and that have a maturity approximating to the 
terms of the pension obligations the costs of 
providing these defined benefit schemes are 
accrued over the period of employment 
actuarial gains and losses are recognised 
immediately in other comprehensive income
pastservice costs are recognised immediately  
in income 
1 accounting policies continued 
value in use is calculated with reference to the 
future cash flows expected to be generated by 
an asset or group of assets where cash flows 
are not identifiable to specific assets the 
pretax discount rate used in brand impairment 
reviews is based on a weighted average cost of 
capital for comparable companies operating in 
similar markets and geographies as the group 
including where appropriate an adjustment 
for the specific risks associated with the 
relevant cash generating unit
inventories
inventories are stated at the lower of cost or 
net realisable value cost comprises materials 
direct labour and an appropriate portion of 
overhead expenses based on normal operating 
capacity required to get the inventory to its 
present location and condition inventory 
valuation is determined on a first in first out 
fifo basis net realisable value is the estimated 
selling price less applicable selling expenses
trade receivables
trade receivables are initially recognised at  
fair value and subsequently held at amortised 
cost less provision for impairment if there is 
objective evidence that the group will not be 
able to collect the full amount of the receivable 
an impairment is recognised through the 
income statement significant financial 
difficulties of the debtor probability that a 
debtor will enter bankruptcy or financial 
reorganisation and default or delinquency in 
payments are considered indicators that the 
trade receivable is impaired the impairment  
is calculated as the difference between the 
carrying value of the receivable and the present 
value of the related estimated future cash 
flows discounted at the original interest rate 
cash and cash equivalents
cash and cash equivalents comprise cash 
balances and other deposits with a maturity  
of less than three months when deposited 
for the purpose of the cash flow statement 
bank overdrafts that form an integral part  
of the group’s cash management and are 
repayable on demand are included as a 
component of cash and cash equivalents
bank overdrafts are included within borrowings 
in the balance sheet
borrowings
interestbearing borrowings are recognised 
initially at fair value less attributable transaction 
costs subsequent to initial recognition 
interestbearing borrowings are stated at 
amortised cost with any difference between 
cost and redemption value being recognised  
in the income statement over the period of the 
borrowings on an effective interest basis
income tax
income tax on the profit for the year comprises 
current and deferred tax income tax is recognised 
in the income statement except to the extent 
that it relates to items recognised in other 
comprehensive income or directly in equity  
in this case the tax is also recognised in  
other comprehensive income or directly  
in equity respectively rb annual report 2013 57
financial statements   notes to the financial statements
net revenue
net revenue is defined as the amount invoiced 
to external customers during the year that is 
gross sales net of trade discounts customer 
allowances for credit notes and returns and 
consumer coupons and exclusive of vat and 
other salesrelated taxes net revenue is 
recognised at the time that the risks and 
rewards of ownership of the products are 
transferred to the customer
leases
leases of property plant and equipment where 
the group has substantially all the risks and 
rewards of ownership are classified as finance 
leases assets held under finance leases are 
capitalised at lease inception at the lower of the 
asset’s fair value and the present value of the 
minimum lease payments obligations related 
to finance leases net of finance charges in 
respect of future periods are included as 
appropriate within borrowings the interest 
element of the finance cost is charged to the 
income statement over the life of the lease  
so as to produce a constant periodic rate of 
interest on the remaining balance of the liability 
for each period the property plant and 
equipment are depreciated on the same basis  
as owned plant and equipment or over the life 
of the lease if shorter
leases where the lessor retains substantially all 
the risks and rewards of ownership are classified 
as operating leases operating lease rentals net 
of any related lease incentives are charged 
against profit on a straight line basis over the 
period of the lease
share capital transactions
when the group purchases equity share  
capital the amount of the consideration  
paid including directly attributable costs is 
recognised as a change in equity purchased 
shares are either held in treasury in order to 
satisfy employee options or cancelled and in 
order to maintain capital an equivalent amount 
to the nominal value of the shares cancelled 
would be transferred from retained earnings  
to the capital redemption reserve
dividend distribution
dividends to owners of the parent are 
recognised as a liability in the period in which 
the dividends are approved by the company’s 
shareholders interim dividends are recorded in 
the period in which they are approved and paid
accounting estimates and judgements 
the directors make a number of estimates and 
assumptions regarding the future and make 
some significant judgements in applying the 
group’s accounting policies these include
•	 	 estimates	of	futur e	business	performance	 
and cash generation discount rates and 
longterm growth rates supporting the net 
book amount of indefinite life intangible 
assets at the balance sheet date refer to  
note 9 if the actual results should differ or 
changes in expectations arise impairment 
charges may be required which would 
adversely impact operating results
•	 	 the	continuing	enduring	natur e	of	the	
group’s brands supporting the assumed 
useful lives of these assets refer to note 9
•	 	 measur ement	of	intangible	assets	both	 
in business combinations and other asset 
acquisitions requires the group to identify 
such assets assumptions and estimates are 
made about future cash flows and appropriate 
discount rates to value identified intangible 
assets refer to note 26
•	 	 the	actual	tax	paid	on	pr ofits	is	determined	
based on tax laws and regulations that differ 
across the numerous jurisdictions in which 
the group operates assumptions are made 
in applying these laws to the taxable profits 
in any given period in order to calculate the 
tax charge for that period where the eventual 
tax paid or reclaimed is different to the 
amounts originally estimated the difference 
will be charged or credited to the income 
statement in the period in which it is 
determined refer to note 7
•	 	 assumptions 	 ar e 	 made 	 as 	 to 	 the 	 r ecoverability	
of tax assets especially as to whether there 
will be sufficient future taxable profits in the 
same jurisdictions to fully utilise losses in 
future years refer to note 11
•	 	 the	gr oup	r ecognises	legal	pr ovisions	in	line	
the group’s provisions policy the level of 
provisioning for regulatory investigation is  
a matter where management and legal 
judgement is important refer to note 17
1 accounting policies continued 
at inception the relationship between the 
hedging instrument and the hedged item  
is documented as is an assessment of the 
effectiveness of the derivative instrument used 
in the hedging transaction in offsetting changes 
in the cash flow of the hedged item this 
effectiveness assessment is repeated on an 
ongoing basis during the life of the hedging 
instrument to ensure that the instrument 
remains an effective hedge of the transaction
1  derivatives classified as cash flow hedges 
the effective portion of changes in the fair 
value is recognised in other comprehensive 
income any gain or loss relating to the 
ineffective portion is recognised immediately 
in the income statement
  amounts recognised in other comprehensive 
income are recycled to the income statement  
in the period when the hedged item affects 
profit or loss if the hedging instrument 
expires or is sold or no longer meets the 
criteria for hedge accounting any cumulative 
gain or loss existing in other comprehensive 
income at that time remains in other 
comprehensive income and is recognised 
when the forecast transaction is ultimately 
recognised in the income statement if the 
forecast transaction is no longer expected to 
occur the cumulative gain or loss in other 
comprehensive income is immediately 
transferred to the income statement
2  derivatives that do not qualify for hedge 
accounting these are classified at fair value 
through profit or loss all changes in fair 
value of derivative instruments that do not 
qualify for hedge accounting are recognised 
immediately in the income statement
net investment hedges
gains and losses on those hedging instruments 
designated as hedges of the net investments  
in foreign operations are recognised in other 
comprehensive income to the extent that the 
hedging relationship is effective gains and 
losses accumulated in the foreign currency 
translation reserve are included in the income 
statement when the foreign operation is 
disposed of  58 rb annual report 2013
financial statements   notes to the financial statements
2 operating segments
the executive committee is the group’s chief operating decisionmaker codm management has determined the operating segments based on the 
reports reviewed by the executive committee for the purposes of making strategic decisions and assessing performance the executive committee 
considers the business principally from a geographical perspective but with the rb pharmaceuticals in table referred to as rbp and food businesses 
being managed separately given the significantly different nature of these businesses and the risks and rewards associated with them
the group’s geographical segments comprise europe and north america ena latin america north asia south east asia and australia and new 
zealand lapac and russia and cis middle east north africa turkey and subsaharan africa rumea the geographical segments derive their 
revenue primarily from the manufacture and sale of branded products in the health hygiene and home categories rb pharmaceuticals derives its 
revenue exclusively from the sales of buprenorphinebased prescription drugs used to treat opiate dependence and food derives its revenue from  
food products primarily sold in ena
the scholl footwear business previously reported as part of rumea is now reported as part of ena comparative information has been restated on  
a consistent basis 
the executive committee assesses the performance of the operating segments based on net revenue and operating profit before exceptional items 
finance income and expense are not allocated to segments as they are managed on a central group basis 
specific items of income and expense reported to the executive committee outside of the individual segment financial information are shown in the 
corporate segment for the year ended 31 december 2013 the corporate segment had £nil profit or loss 2012 £32m – relating primarily to the 
disposal of the paras personal care business
operating segments
the segment information provided to the executive committee for the operating segments for the year ended 31 december is as follows 
         total
    ena lapac rumea food corporate exrbp  rbp total
2013    £m £m £m £m £m £m £m £m
net revenue    5074 2511 1356 325 – 9266 777 10043
depreciation amortisation and impairment  93 48 9 5 – 155 16 171
adjusted operating profit    1321 495 284 88 – 2188 428 2616
exceptional items           271
operating profit           2345
net finance expense           31
profit on ordinary activities before taxation         2314
         total
    ena lapac rumea food corporate exrbp  rbp total
2012 restated
1
    £m £m £m £m £m £m £m £m
net revenue    4744 2327 1338 321 – 8730 837 9567
depreciation amortisation and impairment   95 32 8 5 – 140 8 148
adjusted operating profit    1156 465 296 92 32 2041 536 2577
exceptional items           135
operating profit           2442
net finance expense           34
profit on ordinary activities before taxation          2408
1
   restated for scholl footwear segment move from rumea to ena net revenue £66m and operating loss of £7m and the impact of the accounting 
policy change discussed in note 1 rb annual report 2013 59
financial statements   notes to the financial statements
2 operating segments continued
the executive committee reviews net working capital by segment and other assets and liabilities on a group basis the split of assets and liabilities by 
segment provided to the executive committee is as follows assets and liabilities not presented to the executive committee are shown below as a 
reconciling item 
      ena lapac rumea food rbp total
2013      £m £m £m £m £m £m
inventories      416 245 99 5 129 894
trade and other receivables      585 368 208 1 112 1274
total segment assets      1001 613 307 6 241 2168
trade and other payables      1488 675 254 14 261 2692
      ena lapac rumea food rbp total
2012 restated
1
      £m £m £m £m £m £m
inventories      393 250 110 4 108 865
trade and other receivables      625 363 193  178 1359
total segment assets      1018 613 303 4 286 2224
trade and other payables       1442 661 269 13 241 2626
1
  restated for scholl footwear segment move from rumea to ena £8m inventory £24m trade and other receivables £14m trade and other trade 
payables
the assets and liabilities are reported based upon the operations of the segment and the physical location of the asset or liability there are a number of 
group assets and liabilities that are not specifically attributable to one segment reconciliation of these assets and liabilities to total assets or liabilities in 
the balance sheet is shown below
           2012
         2013  restated
1
         £m  £m
inventories for operating segments         894  865
unallocated
elimination of profit on intercompany inventory       148  130
total inventories per the balance sheet        746  735
trade and other receivables for operating segments       1274  1359
unallocated
group items         32  48
total trade and other receivables per the balance sheet      1306  1407
total inventories and trade and other receivables per the balance sheet     2052  2142
other unallocated assets         13097  12924
total assets per the balance sheet        15149  15066
trade and other payables for operating segments       2692  2626
unallocated
group items         223  216
total trade and other payables per the balance sheet       2915  2842
other unallocated liabilities         5898  6302
total liabilities per the balance sheet        8813  9144
unallocated assets include goodwill and intangible assets property plant and equipment deferred and current tax available for sale assets retirement 
benefit surplus other receivables derivative financial assets and cash and cash equivalents unallocated liabilities include borrowings provisions for 
liabilities and charges current and deferred tax liabilities other liabilities and retirement benefit obligations
1
 refer to note 26 for further details 60 rb annual report 2013
financial statements   notes to the financial statements 
2 operating segments continued
analysis of categories
the group analyses its revenue by the following categories 
           net revenues
       
         2013  2012
         £m  £m
health	 								 2633  2068
hygiene	 	 	 	 	 	 	 	 	 3835  3682
home	 								 1974  1966
portfolio brands         499  693
food         325  321
         9266  8730
rb pharmaceuticals         777  837
total         10043  9567
health	hygiene	home	and	portfolio	brands	categories	ar e	all	split	acr oss	the	thr ee	geographical	segments	of	ena	lap ac	and	rumea	food	which	 
is sold primarily in ena and rb pharmaceuticals are recognised within their own operating segments
the company is domiciled in the uk the split of revenue from external customers and noncurrent assets other than financial instruments deferred 
tax assets and retirement benefit surplus assets between the uk the us being the single biggest country outside the country of domicile and that 
from all other countries is
          all other
        uk us countries total
2013        £m £m £m £m
net revenue        676 2777 6590 10043
goodwill and other intangible assets       1536 4212 5393 11141
property plant and equipment        148 125 488 761
other receivables        2 30 217 249
          all other
        uk us countries total
2012 restated
1
        £m £m £m £m
net revenue        643 2480 6444 9567
goodwill and other intangible assets       1536 4274 5352 11162
property plant and equipment        137 124 475 736
other receivables        4 4 25 33
1
 refer to note 26 for further details
the net revenue from external customers reported on a geographical basis above is measured consistently with that in the operating segments
major customers are typically large grocery chains mass market and multiple retailers the group’s customer base is diverse with no single external 
customer accounting for more than 10 of net revenue and the top ten customers accounting for less than a quarter of total net revenue rb annual report 2013 61
financial statements   notes to the financial statements 
3 analysis of cost of sales and net operating expenses
           2012 
         2013  restated
1
         £m  £m
cost of sales         4074  4029
distribution costs         2467  2314
administrative expenses
pharmaceuticals research and development        47  25
other research and development         152  146
other         692  489
total administrative expenses         891  660
other net operating income         5  13
exceptional items         271  135
net operating expenses         3624  3096
1
 refer to note 1 for further details
total foreign exchange losses of £16m 2012 £nil have been recognised through the income statement these amounts exclude financial instruments 
fair valued through the income statement and amounts recognised directly in the foreign currency translation reserve
         2013  2012
exceptional items         £m  £m
legal provision         225  –
acquisition integration and restructuring costs        46  135
total exceptional items         271  135
the group incurred an exceptional charge of £271m during the year in respect of the following 
•	 £225m	legal	pr ovision	for	historic	r egulatory	issues	2012	£nil	refer	to	note	17 
•	 	 £46m	r estructuring	costs	in	r elation	to	the	new	organisation	acquisition	and	integration	costs	2012	£135m	r elating	to	the	new	organisation	
acquisition and integration costs and withdrawal of private label this consists primarily of redundancy and business integration costs which have 
been included within operating expenses 
4 auditors’ remuneration
during the year the group including its overseas subsidiaries obtained the following services from the company’s auditor and its associates
         2013  2012
         £m  £m
audit services pursuant to legislation    
    audit of the group’s annual accounts        18  19
    audit of the accounts of the group’s subsidiaries       38  38
audit related assurance services         03  04
total audit and audit related services        59  61
fees payable to the company’s auditor and its associates for other services
    taxation compliance services         05  02
    taxation advisory services          17  43
    other assurance services         02  02
    all other nonaudit services         04  01
total nonaudit services         28  48
         87  109
included in the above is £01m 2012 £01m in relation to the audit of the financial statements of associated pension schemes of the group financial statements   notes to the financial statements 
62 rb annual report 2013
5 employees
           2012
         2013  restated
1
a staff costs       notes  £m  £m
the total employment costs including directors were
wages and salaries         1026  958
social security costs         197  170
net pension costs excluding net pension interest     21  51  43
sharebased payments       23  55  49
         1329  1220
1
  net pension costs have been restated to exclude net pension scheme interest now included in net finance expense wages and salaries restated on a 
consistent basis with 2013 refer to note 1 for further details
details of directors’ emoluments are included in the directors’ remuneration report on pages 34 to 46 which forms part of the financial statements 
compensation awarded to key management the executive committee
         2013  2012
         £m  £m
shortterm employee benefits         17  11
postemployment benefits         1  1
sharebased payments         14  15
termination benefits         1  4
         33  31
termination benefits and sharebased payments include contractual commitments made to key management in 2013 comprising cash payments and 
shares to vest in 2014
b staff numbers
the monthly average number of people employed by the group including directors during the year was
         2013  2012
         ‘000  ‘000
ena         125  139
rumea         76  71
lapac         151  137
rb pharmaceuticals         07  06
other         12  06
         371  359
6 net finance expense
           2012
         2013  restated
1
finance income         £m  £m
interest income on cash and cash equivalents        25  26
total finance income         25  26
finance expense
interest payable on borrowings         31  30
net pension scheme interest         8  19
amortisation of issue costs of bank loans        11  6
other finance expense         6  5
total finance expense         56  60
net finance expense         31  34
1
 refer to note 1 for further details financial statements   notes to the financial statements 
rb annual report 2013 63
7 income tax expense
           2012
         2013  restated
1
         £m  £m
current tax         712  662
prior year adjustments         52  21
total current tax          660  641
origination and reversal of temporary differences        9  22
impact of changes in tax rates         95  80
total deferred tax note 11          86  58
tax on profit on ordinary activities        574  583
1
 refer to note 1 for further details
the standard rate of corporation tax in the uk changed from 24 to 23 with effect from 1 april 2013 accordingly the company’s profits for the 
year ended 31 december 2013 are taxed at an effective rate of 2325 2012 245 
uk income tax of £124m 2012 £138m is included within current tax and is calculated at 2325 2012 245 of the estimated assessable profit for 
the year taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions
the total tax charge for the year can be reconciled to the accounting profit as follows
           2012
         2013  restated
1
         £m  £m
profit on ordinary activities before taxation        2314  2408
tax at the notional uk corporation tax rate of 2325 2012 245      538  590
effects of
    tax at rates other than the uk corporation tax rate       67  10
    adjustments to amounts carried in respect of unresolved tax matters     160  77
    incurrenceutilisation of tax losses        1  7
    withholdings and local taxes         21  16
    adjustment in respect of prior periods        9  58
    impact of changes in tax rates          95  80
    exceptional items          20  8
    other permanent differences         5  13 
tax on profit on ordinary activities         574  583
1
 refer to note 1 for further details
the tax charge is expected to be impacted by items in the nature of those listed above for the foreseeable future 
following the enactment of legislation in the uk to reduce the corporation tax rate to 21 from 1 april 2014 the total tax charge in 2013 includes the 
impact on the income statement of calculating the uk deferred tax balances at the lower uk corporation tax rate the impact of this rate change is a 
£95m reduction in the tax charge in the income statement the tax chargecredit relating to components of other comprehensive income is as follows
           2012
        2013   restated
1
       
       tax   tax 
      before  credit after before credit after
      tax charge tax tax charge tax
      £m £m £m £m £m £m
net exchange adjustments on foreign currency translation    369 – 369 256 1 255
gains on cash flow and net investment hedges     19 – 19 4 1 3
reclassification of foreign currency translation reserve on disposal of subsidiary  – – – 9 – 9
remeasurement of defined benefit pension plans note 21    68 27 41 52 11 41
other comprehensive income      282 27 309 295 11 284
current tax       –   2
deferred tax note 11       27   13
       27   11
1
 refer to note 1 for further details
the tax credited directly to the statement of changes in equity during the year is as follows
         2013  2012 
         £m  £m
current tax         16  23
deferred tax note 11         44  –
         60  23 financial statements   notes to the financial statements 
64 rb annual report 2013
8 earnings per share
           2012
         2013  restated
1
         pence  pence
basic earnings per share         2421  2514
diluted earnings per share         2385  2484
adjusted basic earnings per share         2738  2665
adjusted diluted earnings per share         2698  2633
1
 refer to note 1 for further details
basic
basic earnings per share is calculated by dividing the net income attributable to owners of the parent 2013 £1739m 2012 £1821m by the 
weighted average number of ordinary shares in issue during the year 2013 718384234 2012 724238235
diluted
diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all potentially dilutive 
ordinary shares the company has two categories of potentially dilutive ordinary shares executive share options and employee sharesave schemes  
the options only dilute earnings when they result in the issue of shares at a value below the market price of the share and when all performance criteria 
if applicable have been met as at 31 december 2013 there were 4 million 2012 4 million of executive share options not included within the 
dilution because the exercise price for the options was greater than the average share price for the year
the directors believe that diluted earnings per ordinary share adjusted for the impact of exceptional items after the appropriate tax amount provides 
additional useful information on underlying trends to shareholders in respect of earnings per ordinary share
details of the adjusted net income attributable to owners of the parent are as follows
           2012
         2013  restated
1
         £m  £m
net income attributable to owners of the parent       1739  1821
exceptional items          271  135
tax effect of exceptional items         43  26
adjusted net income attributable to owners of the parent       1967  1930
         2013  2012
         average  average
         number of  number of
         shares  shares
on a basic basis        718384234 724238235
dilution for executive options outstanding and executive restricted share plan    9829873 8098123
dilution for employee sharesave scheme options outstanding     838787 659327
on a diluted basis        729052894 732995685
1
 refer to note 1 for further details financial statements   notes to the financial statements 
rb annual report 2013 65
9 goodwill and other intangible assets
   brands  goodwill  software  other  total
   £m  £m  £m  £m  £m
cost
at 1 january 2013   7757  3335  57  235  11384
additions   1  –  21  3  25
arising on business combinations   113  71  –  57  241
disposals   –  –  2  –  2
exchange adjustments   154  94  –  12  260
at 31 december 2013   7717  3312  76  283  11388
accumulated amortisation and impairment 
at 1 january 2013   82  28  22  90  222
amortisation and impairment charge  3  –  1  27  31
disposals   –  –  2  –  2
exchange adjustments   1  1  1  3  4
at 31 december 2013   86  27  20  114  247
net book amount at 31 december 2013  7631  3285  56  169  11141
   brands  goodwill  software  other  total
   restated
1
  restated
1
      restated
1
   £m  £m  £m  £m  £m
cost
at 1 january 2012   7106  3080  48  236  10470
additions   2  –  9  –  11
arising on business combinations   884  357  –  –  1241
disposals   37  17  –  –  54
exchange adjustments   198  85  –  1  284
at 31 december 2012   7757  3335  57  235  11384
accumulated amortisation and impairment 
at 1 january 2012   80  30  21  81  212
amortisation and impairment charge  3  –  1  9  13
disposals   –  1  –  –  1
exchange adjustments   1  1  –  –  2
at 31 december 2012   82  28  22  90  222
net book amount at 31 december 2012  7675  3307  35  145  11162
net book amount at 1 january 2012  7026  3050  27  155  10258
1
 refer to note 26 for further details
the amount stated for brands represents the fair value of brands acquired since 1985 at the day of acquisition other includes product registration 
distribution rights and capitalised product development costs
software includes intangible assets under construction of £52m 2012 £31m 
the majority of brands all of goodwill and certain other intangibles are considered to have indefinite lives for the reasons noted in the accounting 
policies and therefore are subject to an annual impairment review a number of small non core brands are deemed to have a finite life and are 
amortised accordingly
the net book amounts of indefinite and finite life intangible assets are as follows
           2012
         2013  restated
1
net book amount          £m  £m
indefinite life assets
 brands         7606  7650
 goodwill         3285  3307
 other         39  36
total indefinite life assets         10930  10993
finite life assets
 brands         25  25
 software         56  35
 other         130  109
total finite life assets         211  169
total net book amount of intangible assets        11141  11162
1
 refer to note 26 for further details financial statements   notes to the financial statements 
66 rb annual report 2013
9 goodwill and other intangible assets continued
goodwill and other intangible assets with indefinite lives are allocated to a cash generating unit or a group of cash generating units together ‘cgu’ 
for the purposes of impairment testing 
cash generating units
after considering all the evidence available including how brand and production assets generate cash inflows and how management monitors the 
business the directors have concluded that the group’s cgus are health sexual wellbeing health vms health other hygiene home and food 
integration of the schiff business was ongoing but not completed by year end as a result this business continued to be treated as its own cgu health 
vms this cgu will be reassessed following the completion of integration into the group’s operations in 2014 
an analysis of the net book amount of indefinite life assets and goodwill by cgu is shown below
        2013 2012 restated
1
       
    indefinite   indefinite
    life assets  goodwill total life assets goodwill total
cgu  key brands  £m £m £m £m £m £m
health	sexual	wellbeing	 	 dur ex	 1915 956 2871 1952 976 2928
health	other	 	 gaviscon	mucinex	nur ofen
  scholl strepsils 3036 1786 4822 2926 1783 4709
health	vms	 	 airbor ne	megared	move	fr ee	 801 352 1153 815 357 1172
hygiene	 	 bang	clearasil	dettol	finish
	 	 harpic	l ysol	mortein	v eet	 1082 149 1231 1176 149 1325
home	 	 air	w ick	calgon	v anish	w oolite	 781 42 823 786 42 828
food  french’s 30 – 30 31 – 31
   7645 3285 10930 7686 3307 10993
1
 refer to note 26 for further details
indefinite life assets allocated to the food cgu are not considered significant relative to the group’s total indefinite life assets as such the disclosures 
below do not include discussion on the assumptions specific to food 
annual impairment review key assumptions
the annual impairment review for goodwill and other intangible assets with indefinite lives is based on an assessment of each cgu’s value in use value 
in use is calculated from cash flow projections based on historical operating results and shortterm budgets and mediumterm business plans approved 
by management covering a fouryear period with an extrapolated fifth year these projections exclude any estimated future cash inflows or outflows 
expected to arise from restructuring not yet implemented 
cash flows beyond the fiveyear period are extrapolated using the estimated longterm growth rates stated below individual longterm growth rates 
are applied to each product type within a cgu and as such ranges are provided in some cases below the longterm growth rates applied do not 
exceed the longterm average growth rate for the market and countries in which the cgu operates
management has assessed the appropriate discount rate for each individual cgu using a weighted average cost of capital wacc for  
comparable companies operating in similar markets and geographies as the group as the base discount rate adjusted for risks specific to each cgu 
due to the similar geographic and product diversification of their respective markets and risks associated with each cgu a pretax discount rate of 
11	was	determined	for	each	of	the	health	sexual	wellbeing	health	other	hygiene	and	home	cgus	2012	11	health	vms	is	pr edominantly	
concentrated in one market being the us therefore a pretax discount rate of 14 was applied reflecting the increased risk associated with this cgu 
from its market concentration and the fact that this is a relatively new business to the group
key assumptions which are kept under constant review by management in the impairment review include future sales volumes revenue growth rates 
and prices and future levels of marketing support required to sustain grow and further innovate brands the cash flow projections also take account  
of the expected impact from new product initiatives efficiency initiatives and the maturity of the markets in which each cgu operates these key 
assumptions are based on past performance and our experience of volumes growth rates and prices in our key markets
           pretax
           discount
cgu         growth   rate 
health	sexual	wellbeing	 	 	 	 	 	 	 	 	 4	 	 11
health	vms	 	 	 	 	 	 	 	 	 25	 	 14
health	other	 	 	 	 	 	 	 	 	 14	 	 11
hygiene	 		 	 	 	 	 	 	 	 04	 	 11
home	 	 	 	 	 	 	 	 	 02	 	 11
impairment review
in october 2013 an impairment review was performed by comparing the recoverable amount of each cgu with its carrying amount including 
goodwill no impairment was considered necessary there were no significant changes in the period subsequent to the review 
any reasonably possible change in the key assumptions on which the recoverable amounts of the health sexual wellbeing health other hygiene and 
home cgus is based would not imply an impairment 
with a recoverable amount exceeding its carrying value by £19m the health vms cgu is the most sensitive to reasonably possible changes to key 
assumptions this is expected of a recent acquisition where the acquired intangible assets were valued at fair value and updated at the end of the 
hindsight period in december 2013 any significant change in assumptions could cause the carrying value to exceed the recoverable amount for 
example if all other assumptions were held constant a reduction of 100 bps of the assumed compound annual growth rate in undiscounted net cash 
flows would result in the carrying value of this cgu exceeding its recoverable amount by £15m management expects that the completion of the 
integration of the business with the health other cgu in 2014 will realise planned synergies and hence minimise the risk of impairment financial statements   notes to the financial statements 
rb annual report 2013 67
10 property plant and equipment
         land and plant and
         buildings equipment total
         £m £m £m
cost 
at 1 january 2013         525 1285 1810
additions         28 172 200
arising on business combination         1 4 5
disposals         4 44 48
reclassifications         46 46 –
exchange adjustments         20 49 69
at 31 december 2013         576 1322 1898
accumulated depreciation and impairment
at 1 january 2013         205 869 1074
charge for the year         29 111 140
disposals         4 35 39
exchange adjustments         6 32 38
at 31 december 2013         224 913 1137
net book amount at 31 december 2013        352 409 761
         land and plant and
         buildings equipment total
         restated
1
 restated
1
 restated
1
         £m £m £m
cost 
at 1 january 2012         512 1272 1784
additions         13 153 166
arising on business combination         1 7 8
disposals         8 65 73
deconsolidation of subsidiary         2 9 11
reclassifications         21 21 –
exchange adjustments         12 52 64
at 31 december 2012         525 1285 1810
accumulated depreciation and impairment
at 1 january 2012         189 863 1052
charge for the year         24 111 135
disposals         3 57 60
deconsolidation of subsidiary         1 6 7
exchange adjustments         4 42 46
at 31 december 2012         205 869 1074
net book amount at 31 december 2012        320 416 736
net book amount at 1 january 2012        323 409 732
1
 refer to note 26 for further details
the net book amount of assets under construction is £60m 2012 £62m assets under construction are included within plant and equipment 
the reclassification from plant and equipment to land and buildings of £46m 2012 £21m shows the transfer of completed assets 
capital expenditure which was contracted but not capitalised at 31 december 2013 was £30m 2012 £20m financial statements   notes to the financial statements 
68 rb annual report 2013
11 deferred tax
        shortterm  retirement
      accelerated  temporary  benefit
      capital intangible differences   obligations
      allowances assets restated
1
 tax losses restated
2
 total
deferred tax liabilities      £m  £m  £m £m £m £m 
at 1 january 2012      19 1979 184 6 36 1772
chargedcredited to the income statement     12 92 29 – 51 160
credited to other comprehensive income     – – – – 10 10
arising on business combination      1 299 13 9 – 278
disposal of business      – 15 – – – 15
exchange differences      1 46 4 – 2 41
at 31 december 2012      31 2125 222 15 95 1824
chargedcredited to the income statement     11 96 – 5 17 85
chargedcredited to other comprehensive income    – – – – 27 27
chargedcredited directly to equity     – – 44 – – 44
arising on business combination      – 37 12 – – 25
exchange differences      – 42 2 – 5 45
at 31 december 2013      20 2024 276 10 56 1702
1
 refer to note 26 for further details 
2
 refer to note 1 for further details
      accelerated  shortterm  retirement
      capital  intangible temporary   benefit
      allowances assets differences tax losses obligations total
deferred tax assets      £m  £m  £m £m £m £m 
at 1 january 2012      5 16 82 32 57 150
creditedcharged to the income statement     14 8 44 32 48 102
credited to other comprehensive income      – – 2 – 1 3
exchange differences      – 1 2 – 1 2
at 31 december 2012      9 7 38 – 9 49
chargedcredited to the income statement     – 6 8 – 1 1
exchange differences      – – 3 – – 3 
at 31 december 2013      9 13 43 – 8 47
deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority
certain deferred tax assets in respect of overseas corporation tax losses and other temporary differences totalling £163m 2012 £152m have not been 
recognised at 31 december 2013 as the likelihood of future economic benefit is not sufficiently assured these assets will be recognised if utilisation of 
the losses and other temporary differences becomes reasonably certain 
no deferred tax liability has been recognised on the unremitted earnings of overseas subsidiaries as no tax is expected to be payable on them in the 
foreseeable future based on the current repatriation policy of the group financial statements   notes to the financial statements 
rb annual report 2013 69
12 inventories
         2013  2012 
         £m  £m
raw materials and consumables         155  157
work in progress         35  27
finished goods and goods held for resale        556  551
total inventories         746  735
the cost of inventories recognised as an expense and included as cost of sales amounted to £3849m 2012 £3821m this includes inventory write 
offs and losses of £46m 2012 £23m
the group inventory provision at 31 december 2013 was £69m 2012 £81m
13 trade and other receivables
         2013  2012
amounts falling due within one year        £m  £m
trade receivables         1173  1269
less provision for impairment of receivables        44  47
trade receivables – net         1129  1222
other receivables         126  131
prepayments and accrued income         51  54
         1306  1407
trade receivables consist of a broad crosssection of our international customer base for whom there is no significant history of default the credit risk of 
customers is assessed at a subsidiary and group level taking into account their financial positions past experiences and other relevant factors individual 
customer credit limits are imposed based on these factors 
as at 31 december 2013 trade receivables of £77m 2012 £92m were past due but not impaired the ageing analysis of trade receivables past due 
but not impaired is as follows
         2013  2012 
         £m  £m
up to 3 months         77  92
as at 31 december 2013 trade receivables of £71m 2012 £77m were considered to be impaired the amount of provision at 31 december 2013 was 
£44m 2012 £47m it was assessed that a portion of the receivables is expected to be recovered due to the nature and historical collection of trade 
receivables the ageing analysis of these receivables is as follows
         2013  2012 
         £m  £m
up to 3 months         33  37
over 3 months         38  40
         71  77
the movement in the provision for impaired receivables consists of increases for additional provisions offset by receivables written off and unused 
provision released back to the income statement the gross movements in the provision are considered to be insignificant
the other receivables do not contain impaired assets they consist of items including reclaimable sales tax and are from a broad range of countries 
within the group
the carrying amounts of the group’s trade and other receivables are denominated in the following currencies
         2013  2012 
         £m  £m
sterling         101  99
euro         282  305
us dollar         283  388
brazil real         107  89
other currencies         533  526
         1306  1407
the maximum exposure to credit risk at the year end is the carrying value of each class of receivable mentioned above the group does not hold any 
collateral as security
noncurrent other receivables at 31 december 2013 were £249m 2012 £33m £203m relates to a prepayment for an option to acquire legal title to 
intellectual property refer to note 26 the remaining balance relates to other noncurrent prepayments and receivables due after one year  financial statements   notes to the financial statements 
70 rb annual report 2013
14 financial instruments and financial risk management
financial instruments by category
       derivatives fair value  carrying fair
      loans and used for through available value value
      receivables hedging the pl for sale total total
at 31 december 2013      £m £m £m £m £m £m
assets as per the balance sheet
shortterm deposits
1
      – – – 2 2 2
trade and other receivables
2
      1275 – – – 1275 1275
derivative financial instruments – fx forward exchange contracts   – 16 6 – 22 22
cash and cash equivalents      808 – – – 808 808
         other   
         financial  
       derivatives fair value liabilities at carrying fair
       used for through amortised value value
       hedging the pl cost total total
       £m £m £m £m £m
liabilities as per the balance sheet
borrowings excluding finance lease obligations and bond
3
    – – 2167 2167 2167
us1bn bond two tranches of us500m at 2125 and 3625 respectively
4
   – – 595 595 597
finance lease obligations
3
       – – 5 5 5
derivative financial instruments – fx forward exchange contracts    – 159 – 159 159
trade and other payables
5
       – – 2768 2768 2768
other noncurrent liabilities
56
       – – 45 45 45
       derivatives fair value  carrying fair
      loans and used for through available value value
      receivables hedging the pl for sale total total
at 31 december 2012      £m £m £m £m £m £m
assets as per the balance sheet
auction rate securities
7
      – – – 2 2 2
shortterm deposits
1
      – – – 4 4 4
trade and other receivables
2
      1366 – – – 1366 1366
derivative financial instruments – fx forward exchange contracts   – 4 – – 4 4
cash and cash equivalents      887 – – – 887 887
         other  
         financial  
       derivatives fair value liabilities at carrying fair
       used for through amortised value value
       hedging the pl cost total total
       £m £m £m £m £m
liabilities as per the balance sheet
borrowings excluding finance lease obligations
3
     – – 3269 3269 3269
finance lease obligations
3
       – – 5 5 5
derivative financial instruments – fx forward exchange contracts    43 – – 43 43
trade and other payables
5
       – – 2698 2698 2698
other noncurrent liabilities
56
       – – 17 17 17
1
   these shortterm deposits do not meet the requirements to be classified as cash equivalents as they have maturities greater than three months  
they are however highly liquid assets
2
  prepayments and accrued income and employee benefit assets are excluded from the trade and other receivables balance as the analysis above  
is required only for financial instruments
3
  the categories in this disclosure are determined by ias 39 finance leases are outside the scope of ias 39 but they remain within the scope of  
ifrs 7 therefore finance leases have been shown separately
4
  the fair value of bonds at 31 december 2013 is a liability of £597m 2012 £nil this value is derived using a quoted market rate in an active market 
level 1 classification
5
  social security liabilities and other employee benefit liabilities are excluded as the analysis above is required only for financial instruments
6
 included in other noncurrent liabilities is £21m 2012 £12m to purchase the remaining shares of shanghai manon trading company limited
7
   these investments are auction rate securities issued by us state authorities denominated in us dollars with redemption dates falling beyond 2013 
they are typically traded on a secondary market however due to the inactivity of this market there was uncertainty over whether they were likely  
to be redeemed within one year and therefore were classified as noncurrent in 2012 
the carrying value less impairment provision of investments current borrowings cash at bank trade receivables and trade payables are assumed  
to approximate their fair values due to their shortterm nature
the fair value measurement hierarchy levels have been defined as follows 
1 quoted prices unadjusted in active markets for identical assets or liabilities level 1 
2  inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly ie as prices or indirectly  
ie derived from prices level 2 if all significant inputs required to fair value an instrument are observable the instrument is included in level 2 
3 inputs for the asset or liability that are not based on observable market data ie unobservable inputs level 3 financial statements   notes to the financial statements 
rb annual report 2013 71
14 financial instruments and financial risk management continued
the fair value of forward foreign exchange contracts at 31 december 2013 is a liability of £159m 2012 £43m and an asset of £22m 2012 £4m  
this value is determined using forward exchange rates derived from market sourced data at the balance sheet date with the resulting value discounted 
back to present value level 2 classification
as the value of level 3 instruments at 31 december 2013 is not material 2012 not material no further level 3 disclosures have been made
the group has forward foreign exchange contracts that are subject to enforceable master netting arrangements which are not netted in the balance 
sheet the value of these contracts at 31 december 2013 is a liability of £137m 2012 £39m this figure consisted of assets of £22m 2012 £4m and 
liabilities of £159m 2012 £43m
the group also has cash which is subject to a right of offset as at 31 december 2013 the value of this cash was £27m 2012 £63m of which 
consisted of assets of £34m 2012 £63m and overdrafts of £7m 2012 £nil as at 31 december 2013 the value of cash assets outside of netting 
agreements was £774m 2012 824m and the value of overdrafts outside of netting agreements was £3m 2012 £5m
financial risk management
the group’s multinational operations expose it to a variety of financial risks that include the effects of changes in foreign currency exchange rates 
foreign exchange risk market prices interest rates credit risks and liquidity the group has in place a risk management programme that uses foreign 
currency financial instruments including debt and other instruments to limit the impact of these risks on the financial performance of the group
the group’s financing and financial risk management activities are centralised into group treasury gt to achieve benefits of scale and control  
gt manages financial exposures of the group centrally in a manner consistent with underlying business risks gt manages only those risks and flows 
generated by the underlying commercial operations and speculative transactions are not undertaken 
the board of directors reviews and agrees policies guidelines and authority levels for all areas of treasury activity and individually approves significant 
activities gt operates under the close control of the cfo and is subject to periodic independent reviews and audits both internal and external
1 market risk
a foreign exchange risk
the group operates internationally and is exposed to foreign exchange risk arising from various currency exposures foreign exchange risk arises from 
future commercial transactions recognised assets and liabilities and net investments in foreign operations 
the group’s policy is to align interest costs and operating profit of its major currencies in order to provide some protection against the translation 
exposure on foreign currency profits after tax the group may undertake borrowings and other hedging methods in the currencies of the countries 
where most of its assets are located 
it is the group’s policy to monitor and only where appropriate hedge its foreign currency transaction exposure these transaction exposures arise mainly 
from foreign currency receipts and payments for goods and services and from the remittances of foreign currency dividends and loans 
the local business units enter into forward foreign exchange contracts with gt to manage these exposures where practical and allowed by local regulations 
gt matches the group exposures and hedges the net position where possible using spot and forward foreign currency exchange contracts
the notional principal amount of the outstanding forward foreign exchange contracts at 31 december 2013 was £5287m payable 2012 £4303m payable
the group has designated bonds totalling 1000m £597m as the hedging instrument in a net investment hedge relationship the hedged risk is the 
foreign exchange currency risk on the value of the group’s net investment in assets and liabilities denominated in us dollars the net gain or loss under 
this arrangement is recognised in other comprehensive income the net effect on other comprehensive income for the year ended 31 december 2013 
was a £6m gain 2012 £nil
cash flow hedge profile
the group held forward foreign exchange contracts denominated as cash flow hedges primarily in euro australian dollars singapore dollars sterling 
and us dollars notional value of the payable leg resulting from these financial instruments was as follows
         2013  2012
         £m  £m
euro         319  90
australian dollar         177  90
singapore dollar         120  43
sterling         98  –
canadian dollar         –  60
us dollars         32  1
other         60  55
         806  339
these forward foreign exchange contracts are expected to mature over the period january 2014 to january 2015 2012 january 2013 to january 2014
there is no ineffective portion recognised in the income statement arising from cash flow hedges 2012 £nil 
gains and losses recognised in the hedging reserve in other comprehensive income on forward exchange contracts in 2013 of £13m gain 2012 £3m 
gain are recognised in the income statement in the year or years during which the hedged forecast transaction affects the income statement which is 
generally within 12 months from the balance sheet date
the maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the balance sheet 
in the case of cash flow hedges these are denominated in a diverse range of currencies where a fluctuation in one individual currency relationship with  
all others held constant does not have a significant effect on the income statement or shareholders’ equity a fluctuation analysis has been performed  
for all currencies the largest potential fluctuation would be in respect of forward contracts between the australian dollar and the singapore dollar if the 
singapore dollar had strengthenedweakened by 5 against the australian dollar with all other variables held constant the impact on shareholders’ equity 
would have been £12m 2012 less than £1m as at 31 december 2013 if all other currencies had strengthenedweakened by 5 against sterling with all 
other variables held constant this would have had an immaterial effect on the income statement or shareholders’ equity 2012 immaterial  72 rb annual report 2013
financial statements   notes to the financial statements 
14 financial instruments and financial risk management continued
the remaining major monetary financial instruments liquid assets receivables interest and noninterest bearing liabilities are directly denominated in 
the local functional currency or are transferred to the functional currency of the group through the use of derivatives 
b price risk
due to the nature of its business the group is exposed to commodity price risk related to the production or packaging of finished goods such as oil 
related and a diverse range of other raw materials this risk is however managed primarily through mediumterm contracts with certain key suppliers 
and is not therefore viewed as being a material risk
c cash flow and fair value interest rate risk
the group has both interestbearing and non interestbearing assets and liabilities the group monitors its interest expense rate exposure on a regular 
basis the group manages its interest income rate exposure on its gross financial assets by using a combination of fixed rate term deposits
the group analyses its interest rate exposure on a regular basis various scenarios are simulated taking into consideration refinancing renewal of 
existing positions alternative financing and hedging based on these scenarios the group calculates the impact on the income statement of a defined 
interest rate shift for each simulation the same interest rate shift is used for all currencies calculated on a full year and pretax basis 
the scenarios are only run for liabilities that represent the major interestbearing positions based on the simulations performed the impact on the income 
statement of a 50 basispoint shift in interest rates would be a maximum increase of £11m 2012 £9m or decrease of £11m 2012 £9m respectively 
for the liabilities covered the simulation is done on a periodic basis to verify that the maximum loss potential is within the limit given by management
2 credit risk
the group has no significant concentrations of credit risk credit risk arises from cash and cash equivalents derivative financial instruments deposits 
with banks and financial institutions as well as credit exposures to customers the credit quality of trade and other receivables is detailed in note 13 
financial institution counterparties are subject to approval under the group’s counterparty risk policy and such approval is limited to financial institutions 
with a bbb rating or above the group uses bbb and higher rated counterparties to manage risk and uses bbb rated counterparties by exception the 
amount of exposure to any individual counterparty is subject to a limit defined within the counterparty risk policy which is reassessed annually by the 
board derivative financial instruments are only traded with counterparties approved in accordance with the board approved policy derivative risk is 
measured using a risk weighting method
the table below summarises the group’s major financial institution counterparties by credit rating lower of sp and moody’s and balances cash 
equivalents derivative financial instruments deposits at the balance sheet date
counterparty risk
       2013    2012
       
     credit limit exposure  credit limit exposure
counterparty     rating £m £m  rating £m £m
bank a     aa 200 142  aa 175 157
bank b     a 150 113  a 125 125
bank c     a 125 97  a 100 89
bank d     aaa 300 92  – – –
bank e     a 150 83  a 125 97
bank f     a 150 79  – – –
bank g     a 125 78  a 100 64
bank	h	 	 	 	 	 a 75 59  a 75 36
bank i     a 75 57  a 100 36
bank j     a 125 52  a 100 84
3 liquidity risk
cash flow forecasting is performed by the local business units and aggregated by gt gt monitors rolling forecasts of the group’s liquidity requirements 
to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities funds 
over and above those required for shortterm working capital purposes by the overseas businesses are generally remitted to gt the group uses the 
remittances to settle obligations repay borrowings or in the event of a surplus invest in shortterm instruments issued by institutions with a bbb rating 
or better
borrowing facilities 
the group has various borrowing facilities available to it the group has bilateral credit facilities with highquality international banks all of these 
facilities have similar or equivalent terms and conditions and have a financial covenant which is not expected to restrict the group’s future operations 
at the end of 2013 the group had in addition to its longterm debt of £598m 2012 £3m committed borrowing facilities totalling £4350m  
2012 £4000m of which £3500m exceeded 12 months’ maturity of the total facilities at the year end £nil 2012 £nil was utilised the committed 
borrowing facilities together with available uncommitted facilities and central cash and investments are considered sufficient to meet the group’s 
projected cash requirements
the undrawn committed facilities available in respect of which all conditions precedent have been met at the balance sheet date were as follows
         2013  2012
         £m  £m
undrawn committed borrowing facilities
expiring within one year         850  400
expiring between one and two years        500  850
expiring after more than two years         3000  2750
         4350  4000
all borrowing facilities are at floating rates of interest rb annual report 2013 73
financial statements   notes to the financial statements
14 financial instruments and financial risk management continued
the facilities have been arranged to cover general corporate purposes including support for commercial paper issuance all facilities incur commitment 
fees at market rates
headr oom	between	net	debt	and	available	facilities	at	31	december	2013	was	£2254m	2012	£1574m
the group’s borrowing limit at 31 december 2013 calculated in accordance with the articles of association was £61689m 2012 £60468m
the table below analyses the group’s financial liabilities and the derivatives which will be settled on a net basis into relevant maturity groupings based 
on the remaining period at the balance sheet date to the contractual maturity date the amounts disclosed in the table are the contractual 
undiscounted cash flows which have been calculated using spot rates at the relevant balance sheet date including interest to be paid 
        less than between 1 between 2 over
       total 1 year and 2 years and 5 years 5 years
at 31 december 2013       £m £m £m £m £m
commercial paper       2159 2159 – – –
bonds       744 17 17 354 356
other borrowings        22 19 – 3 –
trade payables       991 991 – – –
other payables       1826 1777 15 34 –
        less than between 1 between 2 over
       total 1 year and 2 years and 5 years 5 years
at 31 december 2012       £m £m £m £m £m
commercial paper       3250 3250 – – –
other borrowings        24 21 – 3 –
trade payables       948 948 – – –
other payables       1767 1750 – 17 –
the table below analyses the group’s derivative financial instruments which will be settled on a gross basis into relevant maturity groupings based  
on the remaining period between the balance sheet and the contractual maturity date the amounts disclosed in the table are the contractual 
undiscounted cash flows which have been calculated using spot rates at the relevant balance sheet date
        less than between 1 between 2 over
        1 year and 2 years and 5 years 5 years
at 31 december 2013        £m £m £m £m
forward exchange contracts        
outflow        5240 47 – –
inflow        5099 47 – –
        less than between 1 between 2 over
        1 year and 2 years and 5 years 5 years
at 31 december 2012        £m £m £m £m
forward exchange contracts        
outflow        4233 70 – –
inflow        4190 70 – –
4 capital management
the group considers capital to be net debt plus total equity net debt is calculated as total borrowings less cash and cash equivalents shortterm 
available for sale financial assets and financing derivative financial instruments refer to note 16 total equity includes share capital reserves and 
retained earnings as shown in the consolidated balance sheet 
         2013  2012
         £m  £m
net debt note 16         2096  2426
total equity         6336  5922
         8432  8348
the objectives for managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and 
benefits for other stakeholders and to maintain an efficient capital structure to optimise the cost of capital
in maintaining an appropriate capital structure and providing returns for shareholders the company provided returns to shareholders in 2013 in the 
form of dividends and the buy back of shares refer to notes 27 and 22 respectively
the group monitors net debt and at year end the group had net debt of £2096m 2012 £2426m the group seeks to pay down net debt using cash 
generated by the business to maintain an appropriate level of financial flexibility financial statements   notes to the financial statements 
74 rb annual report 2013
15 cash and cash equivalents 
         2013  2012
         £m  £m
cash at bank and in hand         304  371
shortterm bank deposits         504  516
cash and cash equivalents         808  887
the group operates in a number of territories where there are either foreign currency exchange restrictions or where it is difficult for the group to 
extract cash readily and easily in the shortterm as a result £109m 2012 £115m of cash included in cash and cash equivalents is restricted for use by 
the group
16 financial liabilities – borrowings
         2013  2012
current         £m  £m
bank loans and overdrafts
1
         18  19
commercial paper
2
         2149  3250
finance lease obligations         2  2
         2169  3271
         2013  2012
noncurrent         £m  £m
bonds         595  –
finance lease obligations         3  3
         598  3
1
 bank loans are denominated in a number of currencies all are unsecured and bear interest based on relevant libor equivalent
2
 commercial paper was issued in us dollars is unsecured and bears interest based on relevant libor equivalent 
         2013  2012
maturity of debt         £m  £m
bank loans and overdrafts repayable
within one year or on demand         18  19
other borrowings repayable
within one year
 commercial paper         2149  3250
 finance leases         2  2
between two and five years
 bonds         299  –
     finance leases payable by instalments        3  3
over five years
   bonds         296  –
         2749  3255
gross borrowings unsecured         2767  3274
         2013  2012
analysis of net debt          £m  £m
cash and cash equivalents          808  887
overdrafts          3  5
borrowings excluding overdrafts         2764  3269
current available for sale financial assets        2  4
derivative financial instruments         139  43
         2096  2426
         2013  2012
reconciliation of net debt          £m  £m
net debt at beginning of year          2426  1795
net decreaseincrease in cash and cash equivalents        34  264 
repayment of borrowings          1002  112
proceeds from borrowings          637  887 
borrowings acquired in business combination        –  99
exchange and other movements          1  21
net debt at end of year          2096  2426 rb annual report 2013 75
financial statements   notes to the financial statements
17 provisions for liabilities and charges 
        legal  restructuring other total
        provisions provisions provisions provisions
        £m £m £m £m
at 1 january 2012 restated
1
        34 30 114 178
charged to the income statement        26 123 16 165
arising on business combination        7 – 14 21 
utilised during the year        8 87 41 136
released to the income statement        – – 23  23
exchange adjustments        – – 1 1
at 31 december 2012 restated
2
        59 66 79 204
charged to the income statement        241 9 30 280
arising on business combination        – – 21 21
utilised during the year        9 39 40 88
released to the income statement        6 12 29 47
exchange adjustments        1 – – 1
at 31 december 2013        286 24 61 371
provisions have been analysed between current and noncurrent as follows
           2012 
         2013  restated
2
         £m  £m
current         215  104
noncurrent         156  100
         371  204
1
 provisions previously reported as ‘other provisions’ have now been reported as ‘legal’ and ‘other’ provisions
2
 refer to note 26 for further details
provisions are recognised when the group has a present or constructive obligation as a result of past events it is more likely than not that there will be 
an outflow of resources to settle that obligation and the amount can be reliably estimated 
legal provisions include £222m 2012 £nil of exceptional legal provisions in relation to a number of historic regulatory investigations by various 
government authorities in a number of markets these investigations involve mainly competition law inquiries
the restructuring provision relates principally to redundancies the majority of which is expected to be utilised within one year
other provisions include onerous lease provisions expiring between 2014 and 2016 of £6m 2012 £7m and environmental and other obligations 
throughout the group the majority of which are expected to be used within five years
18 operating lease commitments 
         2013  2012 
         £m  £m
total future minimum lease payments under noncancellable operating leases due
within one year         57  37
later than one and less than five years        90  72
after five years         23  32
         170  141
operating lease rentals charged to the income statement in 2013 were £71m 2012 £54m
as at 31 december 2013 total amounts expected to be received under noncancellable sublease arrangements were £4m 2012 £5m 
amounts credited to the income statement in respect of sublease arrangements were £1m 2012 £2m
19 contingent liabilities
contingent liabilities comprising guarantees relating to subsidiary undertakings at 31 december 2013 amounted to £1m 2012 £3m
the group is involved in a number of investigations by government authorities and has made provisions for such investigations where appropriate 
where it is too early to determine the likely outcome of these matters the directors have made no provision for such potential liabilities 
the group from time to time is involved in disputes in relation to ongoing tax matters in a number of jurisdictions around the world where 
appropriate the directors make provisions based on their assessment of each case financial statements   notes to the financial statements 
76 rb annual report 2013
20 trade and other payables
         2013  2012 
         £m  £m
trade payables         991  948
other payables         127  119
other tax and social security payable        112  98
accruals         1685  1677
         2915  2842
21 pension and other postretirement commitments
the group operates a number of defined benefit and defined contribution pension plans around the world covering many of its employees which  
are principally funded the group’s most significant defined benefit pension plan uk is a final salary plan which closed to new entrants in 2005  
as at 31 december 2013 there were 6902 2012 6843 participants receiving benefits 5949 2012 6168 participants with deferred benefits and 
365 2012 516 active participants trustees of the plan are appointed by the group active members and pensioner membership and are responsible 
for the governance of the plan including paying all administrative costs and compliance with regulations the plan is funded by the payment of 
contributions to the plan’s trust which is a separate entity from the rest of the group the group also operates a number of other postretirement plans 
in	certain	countries	the	major	plan	is	in	the	us	us	retir ee	health	car e	plan	wher e	salaried	participants	become	eligible	for	r etir ee	health	car e	benefits	
after they reach a combined ‘age and years of service rendered’ figure of 70 although the age must be a minimum of 55 this plan closed to new 
members in 2009 as at 31 december 2013 there were 2422 2012 2691 eligible retirees and 1061 2012 1193 current employees potentially 
eligible a benefits committee of the plan is appointed by the group and is responsible for the governance of the plan including paying all 
administrative costs and compliance with regulations this plan is unfunded 
           2012 
         2013   restated
1
         £m  £m
balance sheet assets for   
other         50  27
asset in balance sheet         50  27
balance sheet obligations for   
uk         68  177
us medical         117  128
other         116  121
liability in balance sheet         301  426
net pension liability         251  399
income statement charge included in operating profit for
2
   
defined contribution plans         27  25
defined benefit plans net charge excluding interest    
    uk         9  8
    us medical         3  1
    other         12  11
total pension costs recognised in operating profit note 5      51  43
income statement charge included in net finance expense note 6     8  19
income statement charge included in profit on ordinary activities before tax    59  62
remeasurements gainslosses for   
uk         25  34
us medical         12  2
other         31  16
         68  52
1
 refer to note 1 for further details
2
  the income statement charge included within operating profit includes current service cost administrative costs past service costs and gains and 
losses on settlement and curtailment
the amounts recognised in the balance sheet are determined as follows 
       2013    2012 
           restated
1
       
     us    us
    uk medical other total uk medical other total
    £m £m £m £m £m £m £m £m
present value of funded obligations    1223 – 258 1481 1181 – 257 1438
fair value of plan assets    1155 – 303 1458 1004 – 277 1281
deficitsurplus of funded plans    68 – 45 23 177 – 20 157
present value of unfunded obligations   – 117 111 228 – 128 114 242
liability in balance sheet    68 117 66 251 177 128 94 399
1
 refer to note 1 for further details rb annual report 2013 77
financial statements   notes to the financial statements
21 pension and other postretirement commitments continued
the movement in the group’s net liability is as follows 
      present value of obligation   fair value of plan assets
       
     us    us
    uk medical other total uk medical other total
    £m £m £m £m £m £m £m £m
at 1 january 2012 restated
1
    1092 133 357 1582 896 – 216 1112
current service cost    8 3 11 22 – – – –
curtailment gain    – 4 – 4 – – – –
interest expenseincome    51 6 14 71 42 – 10 52
    59 5 25 89 42 – 10 52
remeasurements         
  return on plan assets excluding amounts included in 
  interest income    – – – – 41 – 6 47
 gainloss from changes in demographic assumptions  4 3 – 7 – – – –
 gainloss from change in assumptions   85 13 9 107 – – – –
 experience lossesgains    6 8 13 1 – – – –
    75 2 22 99 41 – 6 47
exchange differences    – 6 13 19 – – 10 10
contributions – employees    1 – – 1 1 – – 1
contributions – employers    – – – – 70 6 75 151
payments from plans         
    benefit payments    46 6 20 72 46 6 20 72
as at 31 december 2012 restated 
1
   1181 128 371 1680 1004 – 277 1281
1
 refer to note 1 for further details
         
at 1 january 2013     1181 128 371 1680 1004 – 277 1281
current service cost    9 3 12 24 – – – –
interest expenseincome    50 5 12 67 44 – 15 59
    59 8 24 91 44 – 15 59
remeasurements         
 return on plan assets excluding amounts included in  
   interest income    – – – – 51 – 26 77
 gainloss from changes in demographic assumptions  10 9 6 5 – – – –
 gainloss from change in assumptions   25 13 21 9  – – – 
 experience gainslosses    11 8 10 13 – – – –
    26 12 5 9 51 – 26 77
exchange differences    – 2 1 3 – – 1 1
contributions – employees    1 – – 1 1 – – 1
contributions – employers    – – – – 99 5 4 108
payments from plans         
 benefit payments    44 5 20 69 44 5 20 69
as at 31 december 2013     1223 117 369 1709 1155 – 303 1458
the significant actuarial assumptions used for the two major plans as at 31 december 2013 were
        2013   2012
       
        us   us
      uk  medical uk  medical
           
rate of increase in pensionable salaries     36  – 45  –
rate of increase in deferred pensions during deferment    34  – 29  –
rate of increase in pension payments – pensioners    31  – 27  –
rate of increase in pension payments – nonpensioners    31  – 27  –
discount rate      44  48 43  41
inflation assumption      36  – 30  –
annual medical cost inflation      –  50–90 –  50–90 financial statements   notes to the financial statements 
78 rb annual report 2013
21 pension and other postretirement commitments continued
assumptions regarding future mortality experience are set in accordance with published statistics and experience in each territory for the uk plan the 
mortality assumptions were based on the following tables the average life expectancy in years of a pensioner retiring at aged 60 on the balance sheet 
date is as follows
        2013   2012
       
      uk  us uk  us
      years  years years  years
male      284  251 282  241
female      303  275 301  258
the average life expectancy in years of a pensioner retiring at aged 60 15 years after the balance sheet date for the uk and 20 years after the balance 
sheet date for the us is as follows
        2013   2012
       
      uk  us uk  us
      years  years years  years
male      302  273 300  257
female      322  294 319  267
for the uk plan the mortality assumptions were based on the standard saps mortality table with medium cohort improvements to 2009 scaled by 90 
for males and 100 for females allowance for future improvements is made by adopting the 2012 edition of the cmi series with a long term trend of 
15 per annum
for the us plan the mortality assumptions were determined using the rp2000 generational mortality table
the sensitivity of the uk defined benefit obligation to changes in the principal assumptions 
 
         change in defined  
       change in assumption benefit obligation
discount rate       increase 01 decrease by 18
rpi increase       increase 01 increase by 14
life expectancy      members younger by 1 year increase by 23
the above sensitivity analyses are based on a change in one assumption while holding all other assumptions constant in practice this is unlikely to 
occur and changes in some of the assumptions may be correlated
impact of medical cost trend rates
a one percentage change in the assumed health care cost trend rates would have the following effects
 impact on defined benefit obligation
        2013   2012
       
      1  1 1  1
      £m  £m £m  £m
effect on service cost and interest cost     1  1 2  1
effect on postretirement benefit obligation     18  15 20  16
group plan assets are comprised as follows 
       2013    2012
           restated
1
       
     us    us
    uk medical other total uk medical other total
    £m £m £m £m £m £m £m £m
total equities    293 – 163 456 407 – 143 550
total bonds    655 – 120 775 521 – 102 623
total property    196 – 11 207 68 – 7 75
total other assets    11 – 9 20 8 – 25 33
fair value of plan assets    1155 – 303 1458 1004 – 277 1281
1
 refer to note 1 for further details
all total equities and total bonds are quoted investments all total other assets are unquoted investments
through its defined benefit pension plans and postemployment medical plans the group is exposed to a number of risks the most significant of which 
are detailed below
asset volatility the plan liabilities are calculated using a discount rate set with reference to corporate bond yields if plan assets underperform this 
yield this will create a deficit both the uk and us plans hold equities which are expected to outperform corporate bonds in the longterm while 
providing volatility and risk in the shortterm as the plans mature the group intends to reduce the level of investment risk by investing more in assets 
that better match the liabilities all the uk plans have agreed with the company a plan to derisk the investment strategy of the plans at a pace that  
is commensurate with a planned return to full funding over a reasonable time scale the derisking plan provides for a proportion of the investment 
portfolio to move from equity holdings to government and corporate bonds over time the corporate bonds are global securities with an emphasis on 
the	uk	and	us	however 	the	gr oup	believes	that	due	to	the	longterm	natur e	of	the	plan	liabilities	and	the	str ength	of	the	supporting	gr oup	a	level	 
of continuing equity investment is an appropriate element of the group’s longterm strategy to manage the plans efficiently 
changes in bond yields a decrease in corporate bond yields will increase plan liabilities although this will be partially offset by an increase in the 
value of the plans’ bond holdings rb annual report 2013 79
financial statements   notes to the financial statements
21 pension and other postretirement commitments continued
inflation risk some of the group pension obligations are linked to inflation and higher inflation will lead to higher liabilities although in most  
cases caps on the level of inflationary increases are in place to protect the plan against extreme inflation the majority of the plans’ assets are either 
unaffected by fixed interest bonds or loosely correlated with equities inflation meaning that an increase in inflation will also increase the deficit  
in the us plans the pensions in payment are not linked to inflation so this is a less material risk 
life expectancy the majority of the plans’ obligations are to provide benefits for the life of the member whilst the plans allow for an increase in  
life expectancy increases above this assumption will result in an increase in the plans’ liabilities this is particularly significant in the uk plan where 
inflationary increases result in higher sensitivity to changes in life expectancy
change in regulations the group is aware that future changes to the regulatory framework may impact the funding basis of the various plans in the 
future the group’s pensions department monitors the changes in legislation and analyses the risks as and when they occur 
investments are well diversified such that the failure of any single investment would not have a material impact on the overall level of assets a large 
portion of assets in 2013 consists of quoted equities and quoted bonds although the group also invests in property and cash the group believes  
that quoted equities offer the best returns over the long term with an acceptable level of risk the trustees of all the uk funds have moved the 
overwhelming majority of their assets to low cost investment funds in consultation with the company whilst maintaining a prudent diversification
for the largest uk plan a full independent actuarial valuation was carried out at 5 april 2010 and a new valuation is currently underway with an 
effective date of 5 april 2013 for the us plan a full independent actuarial valuation was carried out at 1 january 2012 the group has agreed that it 
will aim to eliminate the pension plan deficit in the uk and ireland over the next four years funding levels are monitored on an annual basis and the 
current agreed contribution rate is 195 of pensionable salaries in the uk and nil in the us the triennial valuation for the largest uk plan effective 
date 5 april 2013 is due to be finalised during 2014 and any further contributions in excess of the ongoing contribution rate of 195 will be finalised 
at that time the total contribution expected for 2014 is £54m and will be finalised when the current uk plan valuation is signed off by the group and 
trustee the group considers that the contribution rates set at the last valuation date and any future further contributions in excess of the contribution 
rate will be sufficient to eliminate the deficit over the agreed period and that regular contributions which are based on service costs will not increase 
significantly for the purpose of ias19 the projected unit valuation method was used for the uk and us plans rolling forward the preliminary uk plan 
triennial valuation results at 5 april 2013 and the 1 january 2012 us plan valuation to 31 december 2013 for the largest uk plan the weighted 
average duration of the deferred benefit obligation is 173 years 2012 173 years
22 share capital
        equity  nominal subscriber  nominal
        ordinary value ordinary value
issued and fully paid        shares  £m  shares £m
at 1 january 2013       734210757 73 2 –
allotments        2324422 1 – –
at 31 december 2013       736535179 74 2 –
        equity  nominal subscriber  nominal
        ordinary value ordinary value
issued and fully paid        shares  £m  shares £m
at 1 january 2012       728621602 73 2 –
allotments        5589155 – – –
at 31 december 2012       734210757 73 2 –
the holders of equity ordinary shares par value 10p are entitled to receive dividends as declared from time to time and are entitled to one vote per 
share at meetings of the parent company
the 	 holders 	 of 	 subscriber 	 or dinary 	 shar es 	 par 	 value 	 £1 	 have 	 no 	 entitlement 	 to 	 dividends 	 holders 	 have 	 no 	 right 	 to 	 attend 	 or 	 vote 	 at 	 any 	 general 	 meeting	
of the company unless a resolution is proposed to wind up the company or vary the rights attached to the subscriber shares
allotment of ordinary shares
during the year 2324422 ordinary shares 2012 5589155 ordinary shares were allotted and 4258793 ordinary shares were released from treasury 
2012 nil to satisfy vestingsexercises under the group’s various share schemes as follows
       2013    2012
       
     number consideration number consideration
ordinary shares of 10p     of shares £m  of shares £m
executive share options – exercises     4638734 131 3024735 74
restricted shares awards – vesting     1571035 – 1405345 –
total under executive share option and restricted share schemes  6209769 131 4430080 74
senior executives share ownership policy plan – vesting   40000 – 20000 –
savingsrelated share option schemes – exercises   333446 7 1139075 24
total     6583215 138 5589155 98
market purchases of shares
during 2013 the company purchased 6000000 equity ordinary shares in accordance with its share buy back programme 2012 14991643 all  
of which are held as treasury shares the total amount paid to acquire the shares was £279m including stamp duty which has been deducted from 
shareholders’ equity 2012 £535m 4258793 treasury shares were released in 2013 leaving a balance held at 31 december 2013 of 16732850 
2012 14991643 financial statements   notes to the financial statements 
80 rb annual report 2013
23 sharebased payments
the group operates a number of incentive schemes including a share option scheme a restricted share scheme and other share award schemes  
all schemes are equity settled the charge for sharebased payments for the year was £55m 2012 £49m
executive share awards
share options and restricted shares executive share awards are awarded to the top400 management group executive share awards have a  
contractual life of ten years but vest according to the following compound average annual growth caag rates in adjusted earnings per share over a 
threeyear period
        adjusted earnings per
caag         share growth over  of options and
per year         three years  shares vesting
9         295  100
8          260  80
7          225  60
6          191  40
the cost is spread over the three years of the performance period for executive committee and top40 members vesting conditions are not retested  
for remaining top400 members the targets can be retested over four or five years if any target has not been met any remaining shares or options 
which have not vested will lapse 
other share awards
other share awards represent saye schemes offered to all staff within the relevant geographic area and a number of senior executive share 
ownership policy plan sopp awards other share awards have contractual lives of three to seven years and are generally not subject to any vesting 
criteria other than the employee’s continued employment
individual tranches of these other share awards are not material for detailed disclosure and therefore have been aggregated in the tables below
all outstanding executive and other share awards as at 31 december 2013 and 31 december 2012 are included in the tables below which analyse the 
charge for 2013 and 2012 the group has used the blackscholes model to calculate the fair value of one award on the date of the grant of the award
table 1 fair value
        blackscholes model assumptions
 
    exercise  share price on  dividend  riskfree fair value of
    price performance grant date volatility yield life interest rate one award
award   grant date £ period £   years  £
share options
2004  08 december 2003 1276 200406 1280 24 26 4 450 246
2005  06 december 2004 1547 200507 1544 23 23 4 488 299
2006  05 december 2005 1810 200608 1816 22 24 4 469 333
2007  08 december 2006 2257 200709 2300 20 22 4 465 423
2008  11 december 2007 2944 200810 2972 20 18 4 553 599
2009  08 december 2008 2729 200911 2780 25 31 4 278 469
2010  07 december 2009 3165 201012 3180 26 35 4 169 470
2011   01 december 2010 3464 201113 3408 26 43 4 216 449
2012  05 december 2011 3209 201214 3219 25 54 4 100 318
2013  03 december 2012 3914 201315 3966 20 43 4 061 329
2014  11 december 2013 4783 201416 4669 19 37 4 076 385
restricted shares
2009  08 december 2008 – 200911 2780 25 31 4 278 2431
2010  07 december 2009 – 201012 3180 26 35 4 169 2723
2011  01 december 2010 – 201113 3408 26 43 4 216 2822
2012  05 december 2011 – 201214 3219 25 54 4 100 2530
2013  03 december 2012 – 201315 3966 20 43 4 061 3276
2014  11 december 2013 – 201416 4669 19 37 4 076 3980 rb annual report 2013 81
financial statements   notes to the financial statements
23 sharebased payments continued
table 2 share awards movements 2013
     movement in number of options
 
       options    options
       outstanding    outstanding
      fair value of at 1 jan  granted   at 31 dec
      one award 2013 adjustments lapsed exercised 2013
award     grant date £ number number number number number
share options
2004  08 december 2003  246 67000 – – 67000 –
2005  06 december 2004 299 165511 – – 52061 113450
2006  05 december 2005 333 263300 – – 35000 228300
2007  08 december 2006 423 1160358 – – 841856 318502
2008  11 december 2007 599 1844079 – – 1037886 806193
2009  08 december 2008 469 2172285 – 1513 1075071  1095701
2010  07 december 2009 470 2955162 – 1469 1155308 1798385
2011  01 december 2010 449 3055949 4667 143162 359422 2558032
2012  05 december 2011 318 3186439 14000 264914 15130 2920395
2013  03 december 2012 329 4022000 90000 791412 – 3320588
2014  11 december 2013 385 – 4020400 – – 4020400
restricted shares
2010  07 december 2009 2723 1344186 – 62 1344124 –
2011  01 december 2010 2822 1396412 2333 71097 214152 1113496
2012  05 december 2011 2530 1477571 7000 122364 12759 1349448
2013  03 december 2012 3276 1986000 104000 472355 – 1617645
2014  11 december 2013 3980 – 1985000 – – 1985000
other share awards
uk saye  various various 662986 134254 52920 138332 605988
us saye  various various 643736 147514 68637 158136 564477
overseas saye  various various 1084343 2011 76991 36978 972385
sopp  various various 180000 50000 10000 40000 180000
      
weighted average exercise price share options   £3213 £4757 £3703 £2817 £3657
table 3 share awards movements 2012
     movement in number of options
 
       options    options
       outstanding    outstanding
      fair value of at 1 jan  granted   at 31 dec
      one award 2012 adjustments lapsed exercised 2012
award     grant date £ number number number number number
share options
2003  22 november 2002 205 67319 – – 67319 –
2004  08 december 2003  246 263000 – – 196000 67000
2005  06 december 2004 299 398511 – – 233000 165511
2006  05 december 2005 333 581971 – – 318671 263300
2007  08 december 2006 423 1516358 – 1000 355000 1160358
2008  11 december 2007 599 2790669 – 3000 943590 1844079
2009  08 december 2008 469 2991334 – 5353 813696 2172285
2010  07 december 2009 470 3229322 – 182958 91202 2955162
2011  01 december 2010 449 3559047 – 496841 6257 3055949
2012  05 december 2011 318 4020400 686800 147161 – 3186439
2013  03 december 2012 329 – 4022000 – – 4022000
restricted shares
2009  08 december 2008 2431 1338916 – 2000 1336916 –
2010  07 december 2009 2723 1493830 – 86447 63197 1344186
2011  01 december 2010 2822 1620015 25000 243371 5232 1396412
2012  05 december 2011 2530 2010200 461550 71079 – 1477571
2013  03 december 2012 3276 – 1986000 – – 1986000
other share awards
uk saye  various various 754823 152282 77753 166366 662986
us saye  various various 722362 203972 109551 173047 643736
overseas saye  various various 1975152 7956 99103 799662 1084343
sopp  various various 100000 110000 10000 20000 180000
weighted average exercise price share options   £2953 £3811 £3346 £2437 £3213
for options outstanding at the year end the weighted average remaining contractual life is 563 years 2012 569 years options outstanding at  
31 december 2013 that could have been exercised at that date were 4360531 2012 5672533 with a weighted average exercise price of £2835 
2012 £2608 financial statements   notes to the financial statements 
82 rb annual report 2013
23 sharebased payments continued
the assumptions made within the valuation calculation with respect to the achievement of performance criteria are based on the directors’ expectations 
in light of the group’s business model and relevant published targets
under the terms of the plans early exercise may only be granted in exceptional circumstances and therefore the effect of early exercise is not incorporated 
into the calculation 
the calculation also assumes that there will be no leavers in the following year no material modifications have been made to the plans in 2013 or 2012 
for the purposes of the valuation
volatility an estimate of future volatility is made with reference to historical volatility over a similar time period to the performance period or the contractual 
life as appropriate
historical	volatility	is	calculated	based	on	the	annualised	standar d	deviation	of	the	gr oup’ s	daily	shar e	price	movement	being	an	appr oximation	to	the	
continuously compounded rate of return on the share
national insurance contributions are payable in respect of certain sharebased payment transactions and are treated as cashsettled transactions  
the contribution in 2013 was £35m 2012 £27m
the weighted average share price for the year was £4580 2012 £3579
options and restricted shares granted during the year
options and restricted shares which may vest or become exercisable at various dates between 2015 and 2021 are as follows
          number of
        price to be paid shares under
         £  option
longterm incentive plan 2007 – share options        4783 4110400
longterm incentive plan 2007 – restricted shares       – 2089200
reckitt benckiser senior executives share ownership policy plan      – 40000
total          6239600
savingsrelated share option schemes
uk scheme         3720 129438
us scheme         3720 147514
total          276952
options and restricted shares unvestedunexercised at 31 december 2013
options and restricted shares which have vested or may vest at various dates between 2014 and 2020 are as follows
       price to be paid £    number of shares under option
       
executive share option and restricted share schemes    from to  2013  2012
reckitt benckiser 1999 share option plan – annual grant    1276 1810 341750 495811
reckitt benckiser longterm incentive plan 2006 – annual grant – options  2257 2257 318502 1160358
reckitt benckiser longterm incentive plan 2007 – annual grant – options  2729 4783 16519694 17235914
reckitt benckiser longterm incentive plan 2007 – annual grant – restricted shares – – 6065789 6204169
reckitt benckiser senior executives share ownership policy plan   – – 180000 180000
        23425735 25276252
       price to be paid £    number of shares under option
       
savingsrelated share option schemes     from to  2013  2012
uk scheme      1690 3720 605988 662986
us scheme      2578 3720 564477 643736
overseas scheme      2195 2799 972385 1084343
total         2142850 2391065
executive share options are awarded at an exercise price determined on grant and payable on exercise following satisfaction of performance criteria 
restricted share awards entitle the recipient to receive shares at no cost following satisfaction of performance criteria rb annual report 2013 83
financial statements   notes to the financial statements
24 retained earnings and other reserves
the merger reserve relates to the 1999 combination of reckitt  colman plc and benckiser nv and a group reconstruction in 2007 treated as a merger 
under part 27 of the companies act 2006
the hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments related to hedge 
transactions that are extant at year end
the foreign currency translation reserve contains the accumulated foreign exchange differences from the translation of the financial statements of the 
group’s foreign operations arising when the group’s entities are consolidated the reserve also contains the translation of liabilities that hedge the group’s 
net exposure in a foreign currency
25 related party transactions
on 19 march 2013 the group purchased an additional 25 of shanghai manon trading company limited thereby increasing its share to 7501  
the consideration for the transaction amounted to £28m including transaction costs 
key management compensation is disclosed in note 5a
the principal subsidiary undertakings included in the consolidated financial statements at 31 december 2013 are disclosed in note 2 to the parent company 
financial statements 
26 business acquisitions and disposals
a collaboration with bristolmyers squibb bms
on 8 may 2013 the group received regulatory approval for a threeyear collaboration agreement with bms for a number of marketleading overthe
counter consumer health care brands in brazil mexico and certain other parts of latin america this arrangement which also includes personnel 
supply contracts and an option to acquire legal title to the related intellectual property at the end of the collaboration period for a multiple of earnings 
was secured for an upfront cash payment of 482m £311m 
this transaction is accounted for as a business combination under ifrs 3 revised business combinations
the collaboration agreement provides the group with an immediate health care platform distribution network and infrastructure in latin america and 
trusted brands with a strong fit with the group’s existing health portfolio 
all assets and liabilities were recognised at the following provisional fair values the amount of consideration transferred over the net assets acquired  
is recognised as goodwill in the group financial statements 
           provisional
           fair value
           £m
intangible asset           57
deferred tax assets           4
provisions           16
net assets acquired            45
goodwill           36
consideration transferred for net assets and goodwill          81
payment for prepaid option           250
total consideration transferred           331
cash consideration           311
deferred consideration           20
total consideration transferred            331
related to the transaction payments totalling £250m have been attributed to the future option to acquire legal title to the related intellectual property 
the option is exercisable by the group at the end of the collaboration period subject to certain payments in addition to the £331m to be made at that 
time the prepayment of this option is not an asset purchased as part of the business combination under ifrs 3 revised and is therefore disclosed 
separately in the table above the prepayment is included in other noncurrent receivables
the intangible asset acquired relates to the threeyear collaboration agreement 
goodwill represents the strategic premium to establish an immediate platform infrastructure and distribution network in the latin american overthe
counter consumer health care market the value of expected synergy savings and assembled workforce 
acquisition related costs of £3m are included in net operating expenses and exceptional items in the income statement
the fair values of identifiable net assets are stated at provisional amounts which will be finalised within the 12month hindsight period following 
acquisition provisional fair value adjustments cover the recognition of acquired intangibles and their associated deferred tax and accounting  
policy alignment 
all assets and liabilities are included within the lapac operating segment and the health category the amount of revenue and profit of the bms 
business	since	acquisition	wer e	not	material	in	the	context	of	the	gr oup	income	statement	had	the	business	been	acquir ed	on	1	january	2013	the	
revenue and profit of the group for the year would not have been materially different to those appearing in the group income statement financial statements   notes to the financial statements 
84 rb annual report 2013
26 business acquisitions and disposals continued
b acquisition of schiff
on 14 december 2012 the group acquired control of schiff by acquiring 100 of the issued share capital for a consideration of 13bn £813m schiff 
is a leading provider of branded vitamins nutrition supplements and nutrition bars predominantly in the us schiff’s vitamins minerals and supplements 
vms product portfolio includes a number of marketleading brands in the specialist product category in the us this transaction has been accounted 
for by the acquisition method 
the fair values of the identifiable assets and liabilities at the date of acquisition were provisionally estimated and disclosed in the 2012 annual report 
and financial statements the table below sets out the movements from the provisional fair values detailed in the 2012 annual report and financial 
statements and the updated final fair values at acquisition date the adjustments made to restate the group balance sheet primarily relate to the 
recognition of a minor brand intangible and adjustments to provisions for legal matters and trade related expenses due to additional information which 
has come to light during the hindsight period and recognition of related deferred tax liabilities
these adjustments have been recorded as a prior year restatement of the balance sheet of the group as at 31 december 2012 there is no impact to 
the group income statement for the year ended 31 december 2012 
      provisional fair additional final fair values 
      values at  fair value at acquisition
      acquisition date adjustments date
       £m  £m  £m
intangible assets        811  4  815
property plant and equipment       9  1  8
inventories       27    27
trade and other receivables       27    27
current tax receivable       9    9
cash and cash equivalents       6    6
borrowings        99    99
provisions for liabilities and charges current      42  24  18
trade and other payables       37    37
deferred tax liabilities       268  10   278
provisions for liabilities and charges noncurrent     3    3
other noncurrent liabilities       1    1
net assets acquired        439  17  456
goodwill       374  17  357
total consideration transferred        813  –  813
total cash consideration       813  –  813
total consideration transferred        813  –  813
the intangible assets acquired include the brand assets associated with airborne digestive advantage megared move free and schiff vitamins
c minor acquisitions and disposals
on 8 january 2013 the group obtained control of oriental medicine company limited a manufacturer of traditional chinese sore throat products  
by acquiring 100 of the share capital for cash consideration of £102m a further £18m of cash consideration is deferred over the next three years 
on 17 september 2012 the group acquired a 100 interest in sico by acquiring the trade and business assets of the leading mexican condom 
manufacturer 
on 29 may 2012 the group sold the paras personal care business for £81m net of cash disposed a gain of £32m is recognised in the income 
statement for the year ended 31 december 2012 of which £15m arises from deferred tax 
27 dividends
         2013  2012
         £m  £m
dividends on equity ordinary shares
2012 final paid 78p 2011 final 70p per share       561  511
2013 interim paid 60p 2012 interim 56p per share       431  405
total dividends for the year         992  916
in addition the directors are proposing a final dividend in respect of the financial year ended 31 december 2013 of 77p per share which will absorb  
an estimated £554m of shareholders’ funds if approved by shareholders it will be paid on 29 may 2014 to shareholders who are on the register on  
21 february 2014 with an exdividend date of 19 february 2014 
28 post balance sheet events
on 24 february 2014 part of a wider legal case was settled which related to one of the current provisions held at the balance date the remaining 
provisions that were held in relation to this case at the balance sheet date are still considered to be appropriate  rb annual report 2013 85
financial statements   fiveyear summary
        2012
       2013 restated
1
 2011 2010 2009
income statement       £m £m  £m £m £m
net revenue       10043 9567 9485 8453 7753
operating profit        2345 2442 2395 2130 1891
adjusted operating profit       2616 2577 2487 2231 1891
exceptional items       271 135 92 101 –
operating profit       2345 2442 2395 2130 1891
net finance expenseincome       31 34 19 6 1
profit on ordinary activities before tax      2314 2408 2376 2136 1892
tax on profit on ordinary activities       574 583 622 566 474
attributable to noncontrolling interests      1  4 9 2 –
net income attributable to owners of the parent     1739 1821 1745 1568 1418
balance sheet
net assets       6336 5922 5781 5130 4014
net working capital       863 700 701 639 867
statistics
reported basis
operating margin       233 255 253 252 244
total interest to operating profit times covered     756x 718x 1261x na na
tax rate       248 242 262 265 250
diluted earnings per share       2385p 2484p 2371p 2138p 1947p
dividend cover
†
       18x 19x 19x 19x 20x
declared dividends per ordinary share      137p 134p 125p 115p 100p
adjusted basis
operating margin       260 269 262 264 244
total interest to operating profit times covered     844x 758x 1309x na na
diluted earnings per share       2698p 2633p 2471p 2265p 1947p
dividend cover
†
       20x 20x 20x 20x 20x
† dividend cover is calculated by dividing basic earningsadjusted earnings per share by ordinary dividends per share relating to the year
 adjusted basis is calculated by addingdeducting the exceptional items from net income for the year 
1
 restated for change in ias 19 as discussed in note 1 to the group financial statements 2011 and prior years have not been restated 
fiveyear summary 86 rb annual report 2013
financial statements   parent company independent auditors’ report
specified by law have not been made we  
have no exceptions to report arising from  
this responsibility
other information in the annual report
under isas uk  ireland we are required to 
report to you if in our opinion information in 
the annual report is
•	 	 materially	inconsistent	with	the	information	
in the audited parent company financial 
statements or
•	 	 appar ently	materially	incorr ect	based	on	or	
materially inconsistent with our knowledge 
of the parent company acquired in the 
course of performing our audit or
•	 	 is	otherwise	misleading
we have no exceptions to report arising from 
this responsibility
responsibilities for the financial 
statements and the audit
our responsibilities and those of the 
directors 
as explained more fully in the statement of 
directors’ responsibilities set out on page 33 
the directors are responsible for the preparation 
of the parent company 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 parent company financial 
statements in accordance with applicable law 
and isas uk  ireland those standards 
require us to comply with the auditing practices 
board’s ethical standards for auditors 
this report including the opinions has been 
prepared for and only for the company’s 
members as a body in accordance with chapter 
3 of part 16 of the companies act 2006 and 
for no other purpose we do not in giving 
these opinions accept or assume responsibility 
for any other purpose or to any other person to 
whom this report is shown or into whose hands 
it may come save where expressly agreed by 
our prior consent in writing
other matter
we have reported separately on the group 
financial statements of reckitt benckiser group 
plc for the year ended 31 december 2013 
mark gill senior statutory auditor
for and on behalf of  
pricewaterhousecoopers llp 
chartered accountants and statutory auditors 
london  
7 march 2014
•	 	 whether	the	accounting	policies	ar e	
appropriate to the parent company’s 
circumstances and have been consistently 
applied and adequately disclosed
•	 	 the	r easonableness	of	significant	accounting	
estimates made by the directors and 
•	 	 the	overall	pr esentation	of	the	financial	
statements 
in addition we read all the financial and 
nonfinancial information in the annual report 
to identify material inconsistencies with the 
audited parent company financial statements 
and to identify any information that is 
apparently materially incorrect based on or 
materially inconsistent with the knowledge 
acquired by us in the course of performing the 
audit if we become aware of any apparent 
material misstatements or inconsistencies we 
consider the implications for our report
opinions on matters prescribed by 
the companies act 2006
in our opinion
•	 	 the	information	given	in	the	strategic	report	
and the report of the directors for the 
financial year for which the parent company 
financial statements are prepared is 
consistent with the parent company  
financial statements
•	 	 the	part	of	the	dir ectors’	remuneration	
report to be audited has been properly 
prepared in accordance with the companies 
act 2006
other matters on which we are 
required to report by exception
adequacy of accounting records and 
information and explanations received
under the companies act 2006 we are 
required to report to you if in our opinion
•	 	 w e	have	not	r eceived	all	the	information	and	
explanations we require for our audit or
•	 	 adequate	accounting	r ecor ds	have	not	been	
kept by the parent company or returns 
adequate for our audit have not been 
received from branches not visited by us or
•	 	 the	par ent	company	financial	statements	
and the part of the directors’ remuneration 
report to be audited are not in agreement 
with the accounting records and returns
we have no exceptions to report arising from 
this responsibility
directors’ remuneration
under the companies act 2006 we are 
required to report to you if in our opinion 
certain disclosures of directors’ remuneration 
report on the parent company 
financial statements
our opinion
in our opinion the parent company financial 
statements
•	 	 give	a	true	and	fair	view	of	the	state	 
of the parent company’s affairs as at  
31 december 2013
•	 	 have	been	pr operly	pr epar ed	in	accor dance	
with united kingdom generally accepted 
accounting practice and
•	 	 have	been	pr epar ed	in	accor dance	with	the	
requirements of the companies act 2006
this opinion is to be read in the context of 
what we say in the remainder of this report
what we have audited
the parent company financial statements 
which are prepared by reckitt benckiser group 
plc comprise
•	 	 the	par ent	company	balance	sheet	as	at	 
31 december 2013 and
•	 	 the	notes	to	the	par ent	company	financial	
statements which include a summary of 
significant accounting policies and other 
explanatory information
the financial reporting framework that has 
been applied in their preparation comprises 
applicable law and united kingdom accounting 
standards united kingdom generally accepted 
accounting practice
in applying the financial reporting framework 
the directors have made a number of subjective 
judgements for example in respect of 
significant accounting estimates in making 
such estimates they have made assumptions 
and considered future events
certain disclosures required by the financial 
reporting framework have been presented 
elsewhere in the annual report and financial 
statements ‘annual report’ rather than in  
the notes to the financial statements these are 
crossreferenced from the financial statements 
and are identified as audited
what an audit of financial statements 
involves 
we conducted our audit in accordance with 
international standards on auditing uk  
ireland ‘isas uk  ireland’ an audit involves 
obtaining evidence about the amounts and 
disclosures in the financial statements sufficient 
to give reasonable assurance that the financial 
statements are free from material 
misstatement whether caused by fraud or 
error this includes an assessment of
parent company independent auditors’ 
report to the members of reckitt 
benckiser group plc rb annual report 2013 87
financial statements   parent company balance sheet
          2013  2012
as at 31 december       notes  £m  £m
fixed assets
investments       2  14729  14680
current assets
debtors amounts falling due within one year      3  70  59
debtors amounts falling due after more than one year     4  2  8
         72  67
current liabilities
creditors amounts falling due within one year      5  5676  4498
net current liabilities         5604  4431
total assets less current liabilities        9125  10249
provisions for liabilities       6  222  –
net assets         8903  10249
equity
capital and reserves
called up share capital       7  74  73
share premium account        8  243  184
profit and loss reserve       8  8586  9992
total shareholders’ funds       8  8903  10249
the financial statements on pages 87 to 92 were approved by the board of directors on 7 march 2014 and signed on its behalf by
adrian bellamy rakesh kapoor
director director
parent company balance sheet 88 rb annual report 2013
financial statements   notes to the parent company financial statements
1 parent company accounting policies
accounting convention
the financial statements are prepared on a going concern basis under the historical cost convention in accordance with the companies act 2006 and 
applicable uk accounting standards accounting policies have been consistently applied to all the years presented unless otherwise stated
as permitted by s408 of the companies act 2006 no profit and loss account is presented for reckitt benckiser group plc
foreign currency translation
transactions denominated in foreign currencies are translated using exchange rates prevailing at the dates of the transactions foreign exchange gains 
and losses resulting from the settlement of foreign currency transactions and from the translation at year end exchange rates of monetary assets and 
liabilities denominated in foreign currencies are recognised in the income statement except where hedge accounting is applied
taxation
the tax chargecredit is based on the result for the year and takes into account taxation deferred due to timing differences between the treatment of 
certain items for taxation and accounting purposes deferred tax liabilities are provided for in full and deferred tax assets are recognised to the extent 
that they are considered recoverable
a net deferred tax asset is considered recoverable if it can be regarded as more likely than not that there will be suitable taxable profits against which  
to recover carried forward tax losses and from which the future reversal of underlying timing differences can be deducted
deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions  
or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date
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 based 
on tax rates and laws that have been enacted or substantively enacted by the balance sheet date deferred tax is measured on an undiscounted basis
fixed assets
fixed asset investments are stated at the lower of cost and their recoverable amount which is determined as the higher of net realisable value and value 
in use a review for the potential impairment of an investment is carried out by the directors if events or changes in circumstances indicate that the 
carrying value of the investment may not be recoverable such impairment reviews are performed in accordance with frs 11 ‘impairment of fixed 
assets and goodwill’
employee share schemes
incentives in the form of shares are provided to employees under share option and restricted share schemes any shortfall between the cost to the employee 
and the fair market value of the awards at date of grant is charged to the income statement over the period to which the performance criteria relate 
with the credit taken directly to the profit and loss account additional employer costs in respect of options and awards are charged to the income 
statement over the same period with the credit included in equity where awards are contingent upon future events an assessment of the likelihood  
of these conditions being achieved is made at the end of each reporting year and reflected in the accounting entries made
the grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution 
the fair value of employee services received measured by reference to the grant date fair value is recognised over the vesting period as an increase to 
investment in subsidiary undertakings with a corresponding credit to equity in the company accounts
debtors
debtors are initially recognised at fair value less provision for impairment
provisions
provisions are recognised when the company has a present or constructive obligation as a result of past events it is more likely than not that there will 
be an outflow of resources to settle that obligation and the amount can be reliably estimated 
share capital transactions
when the company purchases equity share capital the amount of the consideration paid including directly attributable costs is recognised as a charge 
to equity purchased shares are either held in treasury in order to satisfy employee options or cancelled and in order to maintain capital an equivalent 
amount to the nominal value of the shares cancelled is transferred from the profit and loss reserve
dividends
dividends payable are recognised when they meet the criteria for a preset obligation ie when they have been approved
cash flow statement 
reckitt benckiser group plc has presented a group cash flow statement in its 2013 annual report and financial statements the directors have not 
prepared a cash flow statement for the company 
notes to the parent company  
financial statements rb annual report 2013 89
financial statements   notes to the parent company financial statements
2 investments
          shares in subsidiary
           undertakings
           £m
cost
at 1 january 2013           14680
additions during the year           49
at 31 december 2013           14729
provision for impairment
at 1 january 2013           –
provided for during the year           –
at 31 december 2013           –
net book amounts
at 1 january 2013            14680
at 31 december 2013           14729
the directors believe that the carrying value of the investments is supported by their underlying net assets
principal subsidiary undertakings
the principal subsidiary undertakings as at 31 december 2013 all of which are included in the consolidated financial statements are shown below
       country of
       incorporation effective  of 
       or registration share capital
      product category and operation held by the group
reckitt benckiser plc    holding company uk ordinary 100
reckitt benckiser australia pty limited   health hygiene home australia ordinary 100
reckitt benckiser brasil limitada    health hygiene home brazil ordinary 100
reckitt benckiser canada inc    health hygiene home and food canada ordinary 100
reckitt	benckiser	deutschland	gmbh	 	 	 health	hygiene	home	 germany	 or dinary	100
reckitt benckiser españa sl    health hygiene home spain ordinary 100
reckitt benckiser france sas    health hygiene home france ordinary 100
reckitt	benckiser	healthcar e	uk	limited	 	 	 health	hygiene	home	 uk	 or dinary	100
reckitt benckiser llc    health hygiene home and food us ordinary 100
reckitt benckiser pharmaceuticals inc   pharmaceuticals us ordinary 100
reckitt benckiser india limited    health hygiene home india ordinary 100
reckitt benckiser italia spa    health hygiene home italy ordinary 100
reckitt benckiser arabia fze    health hygiene home uae dubai ordinary 100
schiff nutrition international inc    health us ordinary 100
with the exception of reckitt benckiser plc none of the above subsidiaries are held directly by reckitt benckiser group plc 
as permitted by s410 of the companies act 2006 particulars of other subsidiary undertakings are not shown above a full list of the company’s 
subsidiary	undertakings	will	be	annexed	to	the	company’ s	annual	r etur n	to	companies	house
3 debtors amounts falling due within one year
         2013  2012
         £m  £m
amounts owed by group undertakings        70  59
amounts owed by group undertakings are unsecured interest free and are repayable on demand
4 debtors amounts falling due after more than one year
         2013  2012
         £m  £m
deferred tax assets         2  8
deferred tax assets consist of shortterm timing differences
5 creditors amounts falling due within one year
         2013  2012
         £m  £m
amounts owed to group undertakings        5673  4491
taxation and social security         3  7
         5676  4498
included in the amounts owed to group undertakings is an amount of £5671m 2012 £4473m which is unsecured carries interest at libor and is 
repayable on demand all other amounts owed to group undertakings are unsecured interest free and are repayable on demand 90 rb annual report 2013
financial statements   notes to the parent company financial statements
6 provisions for liabilities
provisions are recognised when the company has a present or constructive obligation as a result of past events it is more likely than not that there will 
be an outflow of resources to settle that obligation and the amount can be reliably estimated
provisions for liabilities include indemnities provided by the company to subsidiaries for exceptional legal provisions in relation to a number of historic 
regulatory investigations by various government authorities in a number of markets these investigations involve mainly competition law inquiries 
provisions expected to be settled within one year are £137m 2012 £nil and after more than one year but less than five years are £85m 2012 £nil
7 called up share capital
     equity   nominal  subscriber   nominal
     ordinary  value  ordinary  value
issued and fully paid     shares   £m   shares  £m
at 1 january 2013    734210757  73  2  –
allotments     2324422  1  –  –
at 31 december 2013    736535179  74  2  –
     equity   nominal  subscriber   nominal
     ordinary  value  ordinary  value
issued and fully paid     shares   £m   shares  £m
at 1 january 2012    728621602  73  2  –
allotments     5589155  –  –  –
at 31 december 2012    734210757  73  2  –
for details of the allotment of ordinary shares during 2013 refer to note 22 of the group financial statements on page 79
the holders of ordinary shares par value 10p are entitled to receive dividends as declared from time to time and are entitled to one vote per share  
at meetings of the parent company
the 	 holders 	 of 	 subscriber 	 or dinary 	 shar es 	 par 	 value 	 £1 	 have 	 no 	 entitlement 	 to 	 dividends 	 holders 	 have 	 no 	 right 	 to 	 attend 	 or 	 vote 	 at 	 any 	 general 	 meeting	
of the company unless a resolution is proposed to wind up the company or vary the rights attached to the subscriber shares
8 reconciliation of movements in shareholders’ funds
     share  share   profit and
     capital  premium  loss reserve  total
movements during the year     £m  £m  £m  £m
at 1 january 2013     73  184  9992  10249
loss for the financial year     –  –  269  269
dividends     –  –  992  992
shares allotted under share schemes     1  59  –  60
capital contribution in respect of sharebased payments   –  –  49  49
sharebased payments     –  –  6  6
shares repurchased and held in treasury    –  –  279  279
treasury shares reissued     –  –  79  79
at 31 december 2013     74  243  8586  8903
     share  share   profit and
     capital  premium  loss reserve  total
movements during the year     £m  £m  £m  £m
at 1 january 2012     73  86  11447  11606
loss for the financial year     –  –  54  54
dividends     –  –  916  916
shares allotted under share schemes     –  98  –  98
capital contribution in respect of sharebased payments   –  –  43  43
sharebased payments     –  –  7  7
shares repurchased and held in treasury    –  –  535  535
at 31 december 2012     73  184  9992  10249
reckitt benckiser group plc has £8288m 2012 £9725m of its profit and loss reserve available for distribution
during 2013 the company purchased 6000000 equity ordinary shares in accordance with its share buy back programme 2012 14991643 all of 
which are held as treasury shares the total amount paid to acquire the shares was £279m including stamp duty which has been deducted from 
shareholders’ equity 2012 £535m 4258793 treasury shares were released in 2013 leaving a balance held at 31 december 2013 of 16732850 
2012 14991643 rb annual report 2013 91
financial statements   notes to the parent company financial statements
9 sharebased payments
reckitt benckiser group plc has two employees the group’s ceo and cfo the tables below include details of their share awards and those for any 
individuals previously holding these roles details of their share awards that are not fully vested are set out in the directors’ remuneration report the 
charge for sharebased payments for the year was £6m 2012 £7m and national insurance contributions were £3m 2012 £7m the company has 
used the blackscholes pricing model to calculate the fair value of one award on the date of the grant of the awards
the fair value of awards with options outstanding at 31 december 2013 is shown in note 23 of the group financial statements on pages 80 to 82
table 1 share awards movements 2013
    movement in number of options
      
       options    options
        outstanding     outstanding at
      fair value of at 1 january granted    31 december
      one award 2013 adjustments lapsed exercised 2013
award    grant date  £ number number number number number
share options
2007  08 december 2006 423 800000 – – 800000 –
2008  11 december 2007 599 600000 – – 600000 –
2009  08 december 2008 469 600000 – – 600000 –
2010  07 december 2009 470 534615 – – 534615 –
2011  01 december 2010 449 334615 – 66923 267692 –
2012  05 december 2011 318 490000 – 53654 – 436346
2013  03 december 2012 329 400000 90000 – – 490000
2014  11 december 2013 385 – 490000 – – 490000
restricted shares
2010  07 december 2009 2723 267308 – – 267308 –
2011  01 december 2010 2822 177308 8173 33461 133847 18173
2012  05 december 2011 2530 245000 – 37628 – 207372
2013  03 december 2012 3276 200000 45000 – – 245000
2014  11 december 2013 3980 – 285000 – – 285000
other share awards
uk saye  04 september 2006 661 1011 – – – 1011
weighted average exercise price     £2979 £4648 £3351 £2794 £3997
table 2 share awards movements 2012
    movement in number of options
      
       options    options
        outstanding     outstanding at
      fair value of at 1 january granted    31 december
      one award 2012 adjustments lapsed exercised 2012
award    grant date  £ number number number number number
2007  08 december 2006 423 800000 – – – 800000
2008  11 december 2007 599 600000 – – – 600000
2009  08 december 2008 469 693077 – – 93077 600000
2010  07 december 2009 470 653077 – 65385 53077 534615
2011  01 december 2010 449 600000 – 265385 – 334615
2012  05 december 2011 318 490000 – – – 490000
2013  03 december 2012 329 – 400000 – – 400000
restricted shares
2009  08 december 2008 2431 346538 – – 346538 –
2010  07 december 2009 2723 326538 – 32692 26538 267308
2011  01 december 2010 2822 310000 – 132692 – 177308
2012  05 december 2011 2530 245000 – – – 245000
2013  03 december 2012 3276 – 200000 – – 200000
other share awards
uk saye  04 september 2006 661 1011 – – – 1011
weighted average exercise price     £2915 £3914 £3405 £2887 £2979
further details of the share awards relating to the relevant directors are set out in the directors’ remuneration report on pages 34 to 46
for details of the contractual life performance criteria valuation assumptions and volatility of the share awards please refer to note 23 of the group 
financial statements
the weighted average remaining contractual life of the outstanding options is 563 years 2012 569 years
the weighted average share price for the year was £4580 2012 £3579 92 rb annual report 2013
financial statements   notes to the parent company financial statements
10 auditors’ remuneration
the fee charged for the statutory audit of the company was £005m 2012 £005m
11 related party transactions
the company has taken advantage of the exemption within financial reporting standard no 8 ‘related party disclosures’ not to disclose related party 
transactions with wholly owned subsidiaries of the reckitt benckiser group there were no other related party transactions 2012 nil 
12 contingent liabilities
the company has issued a guarantee to the trustees of the reckitt benckiser pension fund covering the obligations of certain uk subsidiaries of the 
group who are the sponsoring employers of the uk defined benefit pension fund the guarantee covers any amounts due to the pension fund from 
these subsidiaries if they fail to meet their pension obligations 
other contingent liabilities are disclosed in note 19 of the group financial statements
13 dividends
         2013  2012
         £m  £m
dividends on equity ordinary shares
2012 final paid 78p 2011 final 70p per share       561  511
2013 interim paid 60p 2012 interim 56p per share       431  405
total dividends for the year         992  916
in addition the directors are proposing a final dividend in respect of the financial year ended 31 december 2013 of 77p per share which will absorb an 
estimated £554m of shareholders’ funds if approved by shareholders it will be paid on 29 may 2014 to shareholders who are on the register on  
21 february 2014 with an exdividend date of 19 february 2014
14 post balance sheet events
on 24 february 2014 part of a wider legal case was settled which related to one of the current provisions held at balance sheet date the remaining 
provisions that were held in relation to this case at the balance sheet date are still considered to be appropriate rb annual report 2013 93
our relationships and principal risks
develop could have a material adverse effect 
on our business 
our results of operations depend to a 
significant extent on our ability to launch  
and sell products that appeal to and are 
accepted by consumers and in particular our 
powerbrands consumer preferences tastes 
and habits are constantly evolving various 
factors some of which are beyond our control 
may have an adverse impact on demand for  
our powerbrands for example certain  
products within our health and hygiene 
categories have in the past exhibited and may 
in the future exhibit seasonal fluctuations 
launch of new products or variants of our 
existing powerbrands may not neutralise the 
impact of weak performance of one of  
our powerbrands similarly our failure to 
differentiate our existing powerbrands or future 
products from competitors whether through 
quality innovation marketing or otherwise 
may adversely impact consumer demand for 
our products certain markets including a 
number of emerging markets in which we plan 
to focus our investment and growth efforts 
exhibit more volatile demand in reaction to 
macroeconomic factors than other markets 
similarly if consumer patterns change within 
the major consumer clusters that we have 
identified or fail to react as anticipated we 
may have to reassess our growth plans and 
alter our sales strategy 
if we are unable to respond to changes in 
consumer demand in a timely or adequate 
manner or at all andor accurately predict or 
anticipate factors that may impact demand 
and if we are unable to differentiate our brands 
from competitors our business financial 
condition and results of operations may be 
materially and adversely affected 
our business financial condition and results  
of operations substantially depend on our 
ability to improve our existing products and 
successfully develop and launch new products 
and technologies
our ability to maintain and grow our market 
share depends to a large extent on our ability 
to successfully and costeffectively introduce 
and market new products whether variants  
of existing or newly developed products  
and to develop equipment technology and 
manufacturing processes for our products  
if we are unable to successfully develop launch 
and market new products that obtain consumer 
acceptance in a timely manner or at all we 
may be unable to compete and maintain or 
grow our market share any new product or 
line extension may not generate sufficient 
consumer interest and sales levels to become a 
profitable product or to cover the costs of its 
60 operating companies in nearly 200 
countries consequently our business and 
results of operations are affected by changes  
in both global economic conditions and the 
individual markets in which we operate  
global economic trends continue to pose 
challenges and in many of our markets 
austerity measures constraints on consumer 
lending and slow or no economic growth 
continue to impede consumer purchasing 
power and adversely impact consumer 
confidence in addition terrorist acts civil 
unrest and other similar disturbances as well  
as natural catastrophes can impact economic 
conditions and consumer confidence degrade 
infrastructure disrupt supply chains and 
otherwise result in business interruption 
a variety of factors may adversely affect our 
results of operations and financial condition 
during periods of economic uncertainty or 
instability social or labour unrest or political 
upheaval in the markets in which we operate 
for example our operations and supply chains 
may be disrupted consumers may purchase 
less or switch to purchasing generic products 
private label products and economy brands  
as opposed to branded products which could 
impact our sales or result in a shift in our 
product mix from higher margin to lower 
margin product offerings in addition we may 
face increased pricing pressure or competing 
promotional activity for lowerpriced products 
as competitors seek to maintain sales volumes 
periods of economic upheaval may also expose 
us to greater counterparty risks including with 
customers suppliers and financial institutions 
who may become insolvent or otherwise  
unable to perform their obligations we may 
also experience greater fluctuations in foreign 
currency movements increased commodity 
prices and increased transportation and  
energy costs periods of economic and  
political upheaval may also lead to government 
actions such as imposition of martial law  
trade restrictions foreign ownership 
restrictions capital price or currency controls 
nationalisation or expropriation of property  
or other resources or changes in legal and 
regulatory requirements including those 
resulting in potentially adverse tax 
consequences we may also be unable to 
access credit markets including the commercial 
paper market on favourable terms or at all 
which could materially adversely affect our 
liquidity and capital resources or significantly 
increase our cost of capital 
our powerbrands collectively contribute a 
significant portion of our revenue and any 
material adverse change to demand for existing 
powerbrands or any future products we may 
relationships
the group’s key external relationships are 
broadly based with our customers retailers no 
single one accounts for more than 10 of net 
revenue and our top ten customers account for 
less than one quarter of net revenue although 
these customers continue to become more 
concentrated in their chosen markets the 
group’s wide geographical spread and diversity 
of product lines provides a natural balance
equally the group sources its raw and 
packaging materials and finished goods from  
a wide variety of predominantly international 
companies and copackers no single supplier 
accounts for more than 5 of cost of sales  
and the group’s global purchasing function 
balances the need for competitive pricing with 
continuity of supply
the group’s brand portfolio is also broadly 
based with the most significant powerbrand 
accounting for approximately 9 of net 
revenue each brand in turn is founded on a 
variety of appropriate technology platforms 
which drive a steady stream of product 
development the individual brands are 
selfsupporting and independent of the rb 
corporate brand and each other this reduces 
the potential for any brand reputation damage 
to impact across a broader front
the financial stability of the group is  
supported by a low level of leverage as 
borrowings to finance acquisitions are paid 
down through strong cash flows and a stable 
shareholder base
given the combination of the financial  
strength and geographic spread of the group 
its range of brands and products and its low 
level of reliance on individual key customers 
and suppliers the directors consider that its 
exposure to specific events which would 
materially adversely affect the group’s ability  
to deliver its strategic objectives is low
principal risks
the principal and specific risks that in the 
opinion of the directors pose the most 
significant threat to the delivery of the group’s 
listed strategic objectives are as listed
any of the following or a combination of such 
factors could have a material adverse effect on 
our business prospects results of operations or 
financial condition
we could be adversely affected by economic 
conditions in and political developments 
affecting the markets in which we operate 
we are one of the world’s leading 
manufacturers and marketers of branded 
health hygiene and home products selling a 
comprehensive range of products through over 
our relationships and  
principal risks 94 rb annual report 2013
our relationships and principal risks
in addition our patents relating to the 
suboxone sublingual film expire on various 
dates through 2030 we have recently been 
informed of the filing of abbreviated new drug 
applications ‘anda’ by par pharmaceutical 
companies inc ‘par pharmaceutical’ watson 
laboratories inc ‘watson laboratories’ and 
alvogen pine brook inc ‘alvogen’ for generic 
suboxone sublingual films in the united states 
the fda can approve an anda for a generic 
version of a branded drug without requiring  
the applicant to undertake the full clinical 
testing necessary to obtain approval to market 
a new drug an anda applicant usually needs 
to only submit data demonstrating that its 
product has the same active ingredients and  
is bioequivalent to the branded product in 
addition to any data necessary to establish that 
any difference in strength dosage form 
inactive ingredients or delivery mechanism does 
not result in different safety or efficacy profiles 
as compared to the reference drug although 
we have filed a patent infringement lawsuit 
against the anda applicants noted above 
which means that the fda cannot approve the 
generic entrant until the earlier of 30 months 
or the disposition of the patent infringement 
proceedings the lawsuit may not be resolved in 
our favour or we may choose to settle due to 
the unpredictable nature and significant costs 
of patent litigation if any other generic 
company is able to obtain fda approval of its 
generic suboxone sublingual film it may be 
able to launch its generic version of suboxone 
sublingual film prior to the expiration of any  
or all of the applicable patents covering our 
suboxone sublingual film 
further pharmacies may discontinue stocking 
doctors may stop prescribing and payors may 
reduce the reimbursement on or may stop 
reimbursing suboxone sublingual film which 
may have an additional adverse impact on  
our revenue 
loss of revenue from the sales of suboxone  
and subutex whether due to competition from 
generic products or due to decisions not to 
prescribe or stock our drugs could have a 
material adverse effect on our results of 
operations and our business
we compete in intensely competitive industries 
we face vigorous competition worldwide we 
compete with wellestablished local regional 
national and international companies that 
target the same consumer base as we do some 
of whom may have more significant resources 
with which to establish and promote their 
products we also face competition from 
‘private label’ products and generic non
branded products which typically are sold at 
lower prices by major retail companies some 
of whom may be our customers competition 
from these sources has grown in recent years 
in the pharmaceutical sector we also compete 
with big generic manufacturers and smaller 
branded firms as well as rd firms which may 
have more significant resources than we do 
consolidation of key trade customers in the 
sectors in which we operate may limit 
opportunities for growth and increase 
competitive pressures further 
similarly any litigation that we face may subject 
us to increasing negative attention in the press 
in addition companies with global operations 
recently have come under criticism for 
corporate tax planning and criticism of our 
structures or those of our peers could also 
generate negative publicity any negative 
publicity could significantly undermine our 
reputation and current methods of 
dissemination of information including the 
ability of reports to ‘go viral’ online mean  
that potential threats to reputation can occur  
in a very short period of time and reach a far 
broader audience than historically was the case 
making it far more difficult to address 
moreover third parties may sell products that 
are counterfeit or unauthorised versions of our 
brands or inferior ‘lookalike’ brands that 
resemble ours consumers may confuse our 
products with such brands
we could be materially adversely affected by 
the loss of revenue from the sales of suboxone 
and subutex
our rb pharmaceuticals business which 
manufactures and distributes subutex a 
buprenorphinebased treatment for opiate 
dependence and suboxone a buprenorphine 
and naloxonebased treatment for opiate 
dependence generated 8 of our net revenue 
and 16 of our operating profit before 
exceptional items in 2013 
the introduction of generic products typically 
leads to a loss of sales of the branded product 
and a decrease in the price at which branded 
products can be sold in the united states the 
exclusivity afforded to suboxone by its orphan 
drug status under the regulations of the us 
food and drug administration ‘fda’ ended in 
2009 suboxone has marketing approval from 
the european commission for treatment in the 
28 countries of the european union norway 
and iceland with data exclusivity until 2016 
two manufacturers launched generic suboxone 
tablets in march 2013 which have gained a 
13 volume by mg market share according 
to	sour ce	healthcar e	analytics’	pharmaceutical	
audit suite weekly data as at 27 december 
2013 of the buprenorphine market in the 
united states 
in march 2013 based on the enhanced 
benefits of our suboxone sublingual film  
which we launched in august 2010 and the 
reduction in unintended paediatric exposure 
due to its unitdose child resistant packaging 
we voluntarily withdrew our suboxone tablets 
from the us market we expect other 
manufacturers to introduce branded tablets 
that contain buprenorphine
orexo has recently introduced branded tablets 
that contain buprenorphine these tablets  
may capture market share from our suboxone 
sublingual film although our suboxone 
sublingual film has a volume market share of 
68 of the us buprenorphinebased opioid 
addiction treatment market as of 31 december 
2013 we expect that increased price pressure 
will lead to a material reduction in net revenue 
from this product and adversely affect our 
overall revenues and operating profit
development or promotion in addition if we 
decide to pursue growth opportunities in new 
categories and new category segments or in 
regions in which we have no prior experience 
or limited experience we may become  
exposed to unexpected or greater risks and 
potential losses
product innovation and development generally 
involve considerable costs and may involve a 
lengthy process for example research and 
development ‘rd’ required to develop health 
products could take a significant period of time 
from discovery to commercial product launch 
and given the limited duration of patents  
the longer we take to develop and launch  
a product the less time for which we have 
exclusivity in which we can recoup our 
development costs and seek to profit we may 
be unable to successfully complete clinical trials 
and obtain applicable regulatory approvals in a 
timely manner or at all and may fail to gain 
market approval for our products additionally 
we may encounter infringement claims by 
competitors which may preclude or delay 
commercialisation of our products any delays 
could result in us not being the first to market 
and could undermine our competitive 
advantage if any of the products we are 
currently developing or may develop in future 
fail to become marketready or to achieve 
commercial success at expected levels or at all 
we may incur substantial losses if we fail to 
develop or upgrade our equipment technology 
and manufacturing processes at least in line 
with our competitors we may be unable to 
compete effectively and lose market share
substantial harm to our reputation or the 
reputation of one or more of our brands may 
materially adversely affect our business 
the majority of our brands have worldwide 
recognition maintaining our established 
reputation and trust with key stakeholders 
including consumers customers and trading 
partners is critical to our business various 
factors may adversely impact our reputation 
including product quality inconsistencies or 
contamination we have in the past faced 
qualityrelated issues which resulted in trade 
and consumer recalls and such recalls may have 
a material adverse impact on our reputation 
raw materials that we source for production 
may become contaminated through the supply 
chain and other product defects may occur 
due to human error or equipment failure 
among other things reputational risks may 
also arise with respect to the methods and 
practices of third parties that are part of our 
supply chain including labour standards 
health safety and environmental standards 
raw material sourcing and ethical standards  
in the countries in which we operate we may 
also be the victim of product tampering any 
perceived or actual concerns related to our 
products our supply chain or the industry 
more generally such as the longterm effects  
of household chemicals and otc overthe
counter drug ingredients on human health and 
the environment may be widely disseminated 
online on consumer blogs or other social 
media sites or via print and broadcast media  rb annual report 2013 95
our relationships and principal risks
pandemics or other outbreaks of diseases acts 
of war or terrorism or otherwise may affect 
our ability to source raw materials on a more 
global basis and negatively impact our costs 
the failure of a number of third party suppliers 
to fulfil their contractual obligations in a timely 
manner or at all may result in delays or 
disruptions to our business replacing suppliers 
may require a new supplier to be qualified 
under industry governmental or our standards 
which could require investment and may  
take time 
in addition a number of our facilities are  
critical to our business and major or prolonged 
disruption at those facilities whether due  
to accidents sabotage or otherwise could 
materially adversely affect our operations 
moreover sites in which our products are 
manufactured are subject to supervision by 
regulatory agencies on both an ongoing and 
ad hoc basis for example suboxone sublingual 
film is manufactured at a singlesource 
production facility in the united states and 
fda approval is generally limited to the specific 
approved production facility if we are unable  
to obtain or produce sufficient quantities of a 
particular product at specifically approved 
facilities whether due to disruption to or 
failure of our manufacturing processes or 
otherwise we may fail to meet customer 
demand on a timely basis which could 
undermine our sales and result in customer 
dissatisfaction and damage to our reputation 
in addition any failure to comply with 
applicable legal requirements could lead to 
interruption of production product recalls 
seizures and revocation of licenses to operate  
at any of our facilities 
any interruption or disruption in our  
supply chain particularly if significant or 
prolonged could materially adversely affect  
our business prospects results of operations 
and financial condition 
volatility in the price of commodities energy 
and transportation may impact our profitability 
certain materials for the production or 
packaging of finished goods such as oilrelated 
commodities are subject to fluctuating prices 
increases in the costs or decreases in the 
availability of these commodities and  
increases in other costs such as energy and 
transportation could adversely affect our 
profitability if we are unable to pass on the 
higher costs in the form of price increases or 
otherwise achieve cost efficiencies even if we 
were to increase the prices of our products 
competitors may opt not to adjust their prices 
in response to increasing costs and customers 
may refuse to pay higher prices our inability  
to manage this risk effectively or at all could 
have a material adverse effect on our results  
of operations 
we have grown and may continue to grow in 
part through acquisitions joint ventures and 
business alliances which involve various risks 
while we are principally focused on organic 
growth we have in the past grown and expect 
in the future to continue to grow through 
acquisitions acquisitions present a range of 
risks and uncertainties 
prepare our financial statements in pounds 
sterling and our financial results are affected 
by fluctuations among the relative value  
of sterling and other functional currencies 
particularly the us dollar and euro for 
example in fy 2013 we incurred a net 
exchange loss on foreign currency translation 
net of tax of £363m in our statement of 
comprehensive income further currency 
translations may make it more difficult for 
investors to understand the relative strengths  
or weaknesses of the underlying business on  
a periodtoperiod comparative basis 
we currently hedge some of our currency 
exposures using financial instruments and  
we try to align our interest costs and operating 
profits of our major currencies where possible 
which	may	not	be	ef fective	hedging	
transactions do not eliminate the exchange  
rate risk entirely and may not be fully or at  
all effective 
we are subject to the risk that countries in 
which we operate may impose or increase 
exchange controls or devalue their currency 
we operate in a number of countries 
particularly emerging markets which impose 
exchange controls including but not limited 
to argentina brazil china india russia  
south africa and venezuela such controls may 
restrict or make it impossible to convert local 
currency into other currencies restrict our 
ability to repatriate earnings from a country  
for example £109m of our cash and cash 
equivalents as at 31 december 2013 were 
restricted for use by us borrow on the 
international markets to fund operations in  
that country or limit our ability to import raw 
materials or finished products any or all of 
which could materially adversely affect our 
business liquidity and results of operations  
in addition emerging markets are prone to 
currency devaluations such as for example the 
devaluation by the government of venezuela of 
its currency in february 2013 which tend to 
make our products more expensive in local 
currency terms
we face risks of interruptions of our supply 
chain and disruptions in our production 
facilities which could materially adversely affect 
our results of operations 
we source our raw and packaging materials 
including bulk chemicals plastics pulp and 
metal cans and finished goods from a wide 
variety of predominantly international chemical 
and packaging companies and copackers  
we also outsource the manufacture of some  
of our products to third parties our suppliers 
generally are diversified in terms of geography 
and supplied items but we may face risks to 
continuity of supply arising from certain 
specialised suppliers both of raw materials and 
of third party manufactured items including 
specialty chemicals and components we may 
also incur higher prices for raw materials than 
we may otherwise have to pay if we adopted  
a more concentrated approach to obtaining 
supplies more generally significant disruptions 
to our suppliers’ operations such as disruptions 
resulting from natural catastrophes including 
as a result of the effects of climate change 
our products generally compete on the basis of 
product quality and performance promotional 
activities brand recognition price timely 
development and launch or other benefits to 
consumers if we are unable to offer products 
that consumers choose over our competitors’ 
products our business and results of operations 
may be materially adversely affected in 
addition our products compete with other 
products for shelf space in retail stores and  
for marketing focus such as via instore 
promotional activities of our brands our 
competitive position and consequently sales of 
our products may be harmed to the extent that 
we are unable to successfully maintain sound 
working relationships with our trade customers 
who determine access to shelf space and 
product placement on shelf set retail prices 
and control instore promotional activities  
of our brands and can establish pricing 
differentials between similar products on  
shelf as the retail sector becomes more 
concentrated retailers could impose downward 
pressure on prices and require commercial 
incentives before agreeing to offer our products 
for sale to consumers further to the extent 
trade customers increase usage of their own 
distribution networks and private label brands 
the competitive advantage we derive from  
our brand equity could be impaired in  
addition new sales channels have emerged 
and continue to emerge such as sales made 
through the internet via online shopping  
which may affect customer and consumer 
preferences and competitive dynamics if  
we are unable to effectively compete in these 
new channels this could adversely impact our 
results and our prospects moreover increased 
competition means that we need to spend 
more on promotion of our products 
any of the foregoing could have a material 
adverse impact on our future sales and 
prospects consequently adversely impacting 
our results of operations competition also 
extends to administrative and legal challenges 
of product claims and advertising responding 
to legal challenges and defending our products 
and intellectual property rights could result in 
significant expenses and may divert resources 
away from product and technological 
innovation which may have a material adverse 
impact on our financial condition and results  
of operations 
we are exposed to foreign currency exchange 
rate risk 
we operate on a global basis and hold assets 
incur liabilities earn revenues pay expenses 
and make investments in a number of 
currencies with our nonuk operations 
generating a significant portion of our net 
revenue in fy 2013 93 of our net revenue 
was derived from markets outside the united 
kingdom the sterling value of our revenues 
profits and cash flows from nonuk markets 
may be reduced or our supply costs as 
measured in sterling in those markets may 
increase additionally a number of our 
competitors are based in countries whose 
currencies fluctuate against sterling and they 
may benefit from having their costs incurred  
in weaker currencies relative to sterling we  96 rb annual report 2013
our relationships and principal risks
a disruption to or failure of our information 
technology systems and infrastructure may 
adversely affect our business 
we are increasingly dependent on information 
technology systems and infrastructure to 
support a wide variety of key businesses 
processes including processing and storage of 
confidential data as well as for international 
and external communications as part of our 
logistics and distribution functions with 
suppliers customers and consumers failures  
or disruptions to our systems or the systems  
of third parties on whom we rely due to any 
number of causes particularly if prolonged  
or if any failure or disruption were to impact 
our backup or disaster recovery plans could 
result in a loss of key data andor affect  
our operations 
the combination of our recently initiated 
strategic business reorganisation and enterprise 
resource planning erp programmes could 
result in suboptimal implementations and 
reduced focus due to conflicting demands for 
management attention
our computer systems software and networks 
may be vulnerable to unauthorised access from 
within our organisation or by third parties 
computer viruses or other malicious code and 
other cyber threats that could have a security 
impact the occurrence of one or more of these 
events potentially could jeopardise confidential 
proprietary and other information processed 
and stored in and transmitted through our 
computer systems and networks or otherwise 
cause interruptions or malfunctions in our 
operations which could result in significant 
losses or reputational damage
we may be required to expend significant 
additional resources to modify our protective 
measures or to investigate and remediate 
vulnerabilities or other exposures and we may 
be subject to litigation and financial losses  
that are either not insured against or not fully 
covered through any insurance maintained by 
us furthermore we routinely transmit and 
receive personal confidential and proprietary 
information by email and other electronic 
means we have discussed and worked with 
customers suppliers counterparties and other 
third parties to develop secure transmission 
capabilities but we do not have and may be 
unable to put in place secure capabilities with 
all such third parties and we may not be able to 
ensure that these third parties have appropriate 
controls in place to protect the confidentiality 
of the information an interception misuse  
or mishandling of personal confidential or 
proprietary information being sent to or 
received from a customer supplier 
counterparty or other third party could result  
in legal liability regulatory action and 
reputational harm
our business is subject to significant 
governmental regulation 
our business and products are heavily regulated 
by governments and other regulatory bodies in 
the countries in which we operate regulation 
is imposed in respect of but not limited to 
ingredients manufacturing standards labour 
and regulatory risks in addition acquisitions in 
markets in which we have limited or no prior 
experience may pose a greater risk moreover 
integration of acquired businesses as well as 
any attendant internal reorganisation can also 
require significant management attention 
which may place strain on management 
resources and processes and otherwise disrupt 
operations acquisitions can also place a strain 
on groupwide internal control systems 
if we are unable to effectively manage risks 
associated with acquisitions our business 
financial condition and results of operations 
may be materially adversely affected 
in addition we may choose to enter into joint 
ventures business alliances or collaboration 
agreements which could involve the same or 
similar risks and uncertainties as are involved  
in acquisitions for example we recently 
entered into a threeyear collaboration 
agreement with bristolmyers squibb for a 
number of marketleading otc consumer 
health care brands in brazil mexico and certain 
other parts of latin america joint ventures 
generally involve a lesser degree of control over 
business operations which have in the past 
presented and may in the future present 
greater financial legal operational andor 
compliance risks 
we may be unable to attract and retain 
qualified personnel including key senior 
management 
we invest in recruiting and training personnel 
and senior management our business 
depends in part on executive officers and 
senior management to provide uninterrupted 
leadership and direction for our business  
and qualified personnel for product rd this 
need is all the more acute in the context of a 
growing business and the strategic internal 
reorganisations and resource planning 
programmes to promote and manage such 
growth the market for talent is intensely 
competitive and may become increasingly  
more competitive we could face challenges  
in sourcing qualified personnel with the  
requisite training and suitable international 
experience particularly in countries such as 
china where the availability of skilled 
employees may be limited 
further variable pay is and will continue  
to be the major element of our current 
executive directors’ and senior executives’  
total compensation package if we achieve  
our target levels of performance the variable 
elements will amount to 5976 of 
executive directors’ total remuneration if we 
are unable to achieve our performance targets 
our senior management would not be entitled 
to such variable pay which may operate as  
a disincentive for them to continue their 
employment with us 
the loss of key personnel or our inability  
to recruit qualified personnel to meet our 
operational needs may delay or curtail the 
achievement of major strategic objectives  
and could adversely impact our business
historically	we	have	funded	acquisitions	
through shortterm borrowings which we 
repaid through cash flow from our operations 
in the past three years we have moved away 
from this model due in part to the size of the 
acquisitions we expect that future acquisitions 
will be funded through either additional 
borrowings or through equity or a combination 
of the two we are shifting our capital structure 
in favour of more mediumterm borrowings in 
part to be able to fund larger acquisitions this 
in turn could result in an increase in our net 
debt and will likely increase our level of interest 
expense as we move away from the commercial 
paper market which has benefited from the 
low interest rate environment following the 
financial crisis material or transformative 
acquisitions could require shareholder approval 
either due to the level of equity funding or due 
to corporate governance requirements while 
we target a strong investment grade ‘a’ banded 
credit rating for our debt acquisitions of a 
certain size to the extent we rely more heavily 
on debt funding could place pressure on our 
credit rating 
our competitors may choose to target the same 
acquisition candidates and consolidation in the 
industry may limit available opportunities for 
acquisitions we may also be restricted by 
applicable antitrust laws foreign investment 
laws or other laws and regulations from 
pursuing acquisitions in which case we may 
bear substantial outofpocket expenses 
associated with a failed acquisition 
we may fail to achieve projected financial 
results of acquisitions including expected cost 
and revenue synergies in making acquisitions 
we make various assessments including 
expected growth rates which we may fail to 
achieve to the extent that economic benefits 
associated with our acquisitions diminish in the 
future we may be required to record 
impairment charges to goodwill or other assets 
which could affect our financial condition 
through our acquisitions we may also assume 
unknown or undisclosed business operational 
tax regulatory and other liabilities fail to 
properly assess known contingent liabilities  
or assume businesses with internal control 
deficiencies while we seek to mitigate these 
risks in most of our transactions through 
among other things due diligence processes 
and indemnification provisions we cannot be 
certain that the due diligence processes we 
conduct are adequate particularly with respect 
to acquisitions of privately held companies  
and in countries where legislation and 
transparency make the process more difficult 
or that the indemnification provisions and  
other risk mitigation measures we put in place 
will be sufficient 
we could also face significant risks related  
to integration of the acquired businesses into 
the rb group particularly if we attempt to 
simultaneously integrate multiple businesses 
acquisitions in emerging markets such as 
china where we recently completed an 
acquisition may impose particular risks related 
to integration across different corporate 
cultures systems languages and other market  rb annual report 2013 97
our relationships and principal risks
announcement	of	our	hy	2013	r esults	we	
reported a provision of £225m principally 
relating to competition matters 
our strategy for growth has historically 
included and continues to include acquisition 
activities which are subject to antitrust and 
competition laws such laws and regulations 
may impact our ability to pursue or delay the 
implementation of strategic transactions 
we operate in a number of countries in which 
bribery and corruption pose significant risks 
and we may be exposed to liabilities under 
antibribery laws for any violations any 
violation of applicable money laundering laws 
could also have a negative impact on us
we are subject to antibribery laws and 
regulations that prohibit us and our 
intermediaries from making improper payments 
or offers of payments to foreign governments 
their officials and political parties or private 
parties for the purpose of gaining or retaining 
business including the uk bribery act 2010 
the us foreign corrupt practices act of 1977 
as amended and similar laws worldwide  
given our extensive international operations 
particularly in emerging markets where bribery 
and corruption may be more commonplace we 
are exposed to significant risks particularly with 
respect to parties that are not always subject to 
our control such as agents and joint venture 
partners these risks may be heightened for us 
due to our operations in the health care sector 
which in recent years has experienced greater 
compliance risks than other sectors we may 
also be held liable for successor liability 
violations of such laws committed by 
companies which we acquire or in which we 
invest acquisitions also expose us to risk of 
ongoing compliance issues until such time as 
we can fully integrate acquired operations  
into our compliance and control frameworks 
moreover due to the significant amounts of 
money involved in global supply contracts 
there is also potential for suppliers to attempt 
to bribe our employees actual or alleged 
violations of antibribery laws could result in 
severe consequences including but not limited 
to civil and criminal sanctions termination of 
contracts by our counterparties disruptions  
to our business and reputational harm all of 
which could materially and adversely affect our 
financial condition and results of operations 
we also deal with significant amounts of  
cash in our operations and are subject to 
various reporting and antimoney laundering 
regulations any violation of antimoney 
laundering laws or regulations by us could have 
a negative effect on our results of operations
our business is subject to product  
liability claims 
as a product manufacturer we are subject 
from time to time to certain legal proceedings 
and claims arising out of our products 
including as a result of unanticipated side 
effects or issues that become evident only after 
products are widely introduced into the 
marketplace some of our products present 
inherent dangers including due to the presence 
of chemicals which if mishandled or misused 
by allegations of individual employee 
misconduct in violation of internal policies  
and procedures 
regulatory authorities and consumer groups 
may from time to time request or conduct 
reviews of the use of certain ingredients that 
are used in manufacturing our products the 
results of which may have a material adverse 
effect on our business for example parabens 
a family of chemicals commonly used as 
preservatives in personal care cosmetic and 
pharmaceutical products underwent a review 
by the european commission’s scientific 
committee on consumer safety in may 2013 
based on the findings of that review 
restrictions were introduced to limit the use  
of certain parabens butyl and propyl and  
to ban others iso in cosmetic products  
sold across europe furthermore several 
european countries such as denmark and 
france are considering banning the use of 
parabens altogether
ingredient legislation such as the one related 
to parabens could have a detrimental impact 
on our business undermine our reputation and 
goodwill and affect consumer demand for 
products containing such ingredients we may 
voluntarily remove or be required to remove 
certain ingredients from our products or any 
products that we may acquire we may not be 
able to develop an alternative formulation 
successfully modify our existing products or 
obtain necessary regulatory approvals on a 
timely basis or at all which could adversely 
impact our business and results of operations 
historical or future violations of antitrust and 
competition laws may have a material adverse 
impact on our business financial condition and 
results of operations 
we are subject to antitrust and competition 
laws in the vast majority of countries in which 
we do business failure to comply with 
applicable antitrust and competition laws rules 
and regulations in any jurisdiction in which we 
operate may result in civil andor criminal legal 
proceedings being brought against us 
we have in the past been currently are and 
may in the future be subject to investigations 
and legal proceedings with respect to antitrust 
and competition issues in 2010 we were fined 
£102m by the uk office of fair trading ‘oft’ 
following our admission that we had infringed 
uk and eu competition rules on abuse of 
dominance in respect of our supply of gaviscon 
original liquid brand alginatesantacids to the 
national	health	service	based	in	part	on	the	
oft decision we have received civil claims for 
damages from the health authorities of 
england wales scotland and northern ireland 
and certain pharmaceutical companies we are 
also involved in certain competition lawrelated 
proceedings in other countries competition 
and antitrust violations enquiries often continue 
for several years can be subject to strict 
nondisclosure provisions and if laws are 
deemed to have been violated can result in 
substantial fines and other sanctions which 
may have a material adverse effect on our 
business reputation financial condition and 
results of operations as part of the 
standards product safety and quality 
marketing packaging labelling storage 
distribution advertising imports and exports 
social and environmental responsibility and 
health and safety in addition we are required 
to obtain and maintain licenses in respect  
of certain of our products which must be 
regularly updated in order to improve our 
products and take into account any variations 
if we are found by regulators or courts to  
have been noncompliant with applicable laws  
and regulations we could be subject to civil 
remedies such as fines injunctions or product 
recalls andor criminal sanctions any of which 
could have a material adverse effect on our 
business reputation financial condition and 
results of operations 
we are subject to the introduction of new 
regulations modification of existing regulations 
or changes in interpretations of existing or  
new regulations changes to the laws and 
regulations to which we and our operations  
are subject whether as a result of new or  
more stringent requirements or more stringent 
interpretations of existing requirements  
could impact the way we conduct our business 
or market our products for example  
upscheduling of an otc product would result 
in it being moved from ontheshelf to behind 
the counter and could impose significant 
compliance costs and have a material adverse 
effect on our results of operations 
the laws and regulations to which we are 
subject may not be transparent may be  
difficult to interpret andor may be enforced 
inconsistently 
in our experience emerging markets can pose 
heightened risks with respect to laws and 
regulations when compared with countries 
with more developed institutional structures 
given our focus on growth in rumea and 
lapac we are exposed to heightened 
regulatory risks for example in some  
emerging market countries the laws and 
regulations to which we are subject may not 
always be fully transparent can be difficult to 
interpret and may be enforced inconsistently 
the legal systems in such countries may not  
be wellestablished or reliable there may be  
a lack of respect for the rule of law a lack of 
enforcement of property rights inconsistent  
or insufficient access to remedy through legal 
systems lack of judicial independence and 
corruption which could result in greater 
uncertainty in enforcing contracts difficulties  
in obtaining legal redress particularly against 
the state or stateowned entities and higher 
operational costs and risks to our business 
we could be subject to investigations and 
potential enforcement action which could have 
a material adverse effect on our business 
we could be subject to regulatory investigations 
or potential enforcement action that targets  
an industry a set of business practices or our 
specific operations these investigations or 
enforcement actions could be in respect of 
specific industry issues or broader business 
conduct issues moreover these investigations 
or enforcement actions could be triggered by 
allegations of general corporate misconduct or  98 rb annual report 2013
our relationships and principal risks
tax investigations in a number of jurisdictions 
around the world if material challenges were 
to be successful our effective tax rate may 
increase we may be required to modify 
structures at significant costs to us we may 
also be subject to interest and penalty charges 
and we may incur costs in defending litigation 
or reaching a settlement any of the foregoing 
could materially and adversely affect our 
business financial condition and results  
of operations 
we may be unable to secure and protect our 
intellectual property rights 
our business relies on protecting our brands 
and intellectual property rights we may not  
be able to obtain and perfect our intellectual 
property rights and even if obtained these 
rights may be invalidated circumvented or 
challenged in future third parties may infringe 
on or misappropriate our rights by for 
example asserting rights in or ownership of 
our trademarks trade dress rights designs 
patents copyrights or other intellectual 
property rights if we fail to discover any 
infringements of our intellectual property 
rights or are otherwise unable to successfully 
defend and enforce our rights our business 
prospects and results of operations could be 
materially adversely affected sales of 
counterfeit or unauthorised versions of our 
brands or inferior ‘lookalike’ brands which 
resemble ours could result in confusion among 
consumers between our products and such 
other brands consequently our brand equity 
and reputation may be undermined any failure 
to perfect or successfully assert our intellectual 
property rights could make us less competitive 
and may have a material adverse effect  
on our business operating results and  
financial condition 
in addition our intellectual property rights  
may be undermined if one of our trademarks  
or brand names were to become a generic 
name for or synonymous with a general class 
of product or service should any of our 
trademarks become genericised competitors 
may be allowed to use the genericised 
trademark to describe their similar products  
in certain countries 
the loss of patent protection ineffective 
protection or expiration of our patents may 
impact our financial condition and results of 
operations 
intellectual property laws and patent offices  
are still developing particularly in emerging 
markets patent protection varies in different 
countries and can be substantially weaker  
in emerging markets in which we operate  
when compared to the united states and the 
european union we have in the past faced 
and may in the future face significant 
challenges in enforcing or extending our 
current intellectual property protections or any 
protections we may obtain in future in the 
same manner as in more developed regions 
such as the united states and european union 
we have obtained patent protection for a 
variety of our intellectual property including the 
composition of some of our products such as 
coverage we maintain may not cover our losses 
fully or at all 
we cannot predict the outcome of individual 
legal actions we may settle litigation or 
regulatory proceedings prior to a final judgment 
or determination of liability we may do so to 
avoid the cost management efforts or negative 
business regulatory or reputational 
consequences of continuing to contest liability 
even when we believe we have valid defences 
to liability we may also do so when the 
potential consequences of failing to prevail 
would be disproportionate to the costs of 
settlement substantial legal liability could 
materially adversely affect our business 
financial condition or results of operations  
or could cause significant reputational harm 
which could seriously harm our business
labour disruptions may affect our results  
of operations 
a substantial portion of our workforce is 
unionised and our relationship with unions 
including labour disputes or work stoppages 
could have an adverse impact on our financial 
results we are a party to collective bargaining 
agreements covering approximately onethird 
of our direct employees if upon the expiration 
of such collective bargaining agreements we 
are unable to negotiate acceptable contracts 
with labour unions it could result in strikes by 
the affected workers and thereby significantly 
disrupt our operations further if we are  
unable to control health care and pension  
costs provided for in the collective bargaining 
agreements we may experience increased 
operating costs and an adverse impact on 
future results of operations
changes in tax legislation and other 
circumstances that affect tax calculations could 
adversely affect our financial condition and 
results of operations
we conduct business operations in a number  
of countries and are therefore subject to tax 
and intercompany pricing laws in multiple 
jurisdictions including those relating to the 
flow of funds between rb and its subsidiaries 
our effective tax rate in any given financial year 
reflects a variety of factors that may not be 
present in succeeding financial years and may 
be affected by changes in the tax laws of the 
jurisdictions in which we operate or the 
interpretation of such tax laws certain tax 
positions taken by us are based on industry 
practice tax advice and drawing similarities 
from our facts and circumstances to those in 
case law in particular international transfer 
pricing is an area of taxation that depends 
heavily on the underlying facts and 
circumstances and generally involves a 
significant degree of judgement
changes in tax laws regulations and related 
interpretations and increased enforcement 
actions and penalties may alter the environment 
in which we do business and tax planning 
arrangements are frequently scrutinised by tax 
authorities worldwide 
we have in the past faced and may in the 
future face audits and challenges brought by 
tax authorities and we are involved in ongoing 
could result in significant damage we have 
paid in the past and may be required in the 
future to pay compensation for losses or 
injuries that are allegedly caused by our 
products product liability claims may arise 
among other things from claims that our 
products are defective contain contaminants 
provide inadequate warnings or instructions or 
cause personal injury to persons or damage to 
property product liability claims if resolved 
unfavourably or if settled could result in 
injunctions andor may require us to pay 
substantial damages and related costs 
including punitive damages as well as result in 
the imposition of civil and criminal sanctions 
if one of our products is found to be defective 
we could be required to recall it andor we  
may be required to alter our trademarks labels 
or packaging which could result in adverse 
publicity significant expenses potential 
disruptions in our supply chain and loss of 
revenue we have in the past voluntarily 
implemented and may in the future face 
product quality concerns and voluntarily 
implement product recalls which could expose 
us to product liability claims additionally 
complaints investigations and litigation by 
consumers or government authorities relating 
to our products our competitors’ products or 
individual ingredients may result in judgments 
that affect us andor the industry in which we 
operate a recall of a product that is similar to 
ours could result in confusion concerning the 
scope of the recall andor a decline in consumer 
confidence about our products which may 
consequently impact our business and results  
of operations we may not be insured fully or 
at all in respect of such risks and we have in 
the past and may in the future face disputes 
with our insurers in the event that they refuse 
to cover a particular claim in such instances 
we may be required to bear substantial losses 
which could adversely impact our capital 
expenditures expenses and liabilities any of 
the foregoing could materially adversely impact 
our business financial condition and results of 
operations
legal proceedings in respect of claims outside 
the product liability area could also adversely 
impact our business results of operations and 
financial condition 
outside the product liability area we are 
subject to legal proceedings and other claims 
arising out of the ordinary course of business 
and we may become involved in legal 
proceedings which include but are not  
limited to claims alleging intellectual property 
rights infringement breach of contract 
environmental laws and health and safety  
laws from time to time we face consumer 
complaints andor civil or criminal investigations 
in respect of our products and their alleged 
purposes including in respect of advertising 
claims that we make about our products 
significant claims or a substantial number of 
small claims may be expensive to defend and 
may divert management time and our resources 
away from our operations where appropriate 
we establish provisions to cover potential 
litigationrelated costs such provisions may 
turn out to be insufficient and any insurance  rb annual report 2013 99
our relationships and principal risks
foreign exchange risk
the group prepares its financial statements in 
sterling but conducts business in many foreign 
currencies as a result it is subject to foreign 
exchange risk due to the effects that exchange 
rate movements have on the translation of the 
results and the underlying net assets of its 
foreign subsidiaries
the group’s policy is to align interest costs  
and operating profit of its major currencies in 
order to provide some protection against the 
translation exposure on foreign currency profits 
after tax the group may undertake borrowings 
and other hedging methods in the currencies  
of the countries where most of its assets  
are located
for transactions it is the group’s policy to 
monitor and only where appropriate hedge its 
foreign currency transaction exposures these 
transaction exposures arise mainly from foreign 
currency receipts and payments for goods and 
services and from the remittance of foreign 
currency dividends and loans the local business 
units enter into forward foreign exchange 
contracts with gt to manage these exposures 
where practical and allowed by local 
regulations gt manages the group exposures 
and hedges the net position where possible 
using spot and forward foreign currency 
exchange contracts
market price risk
due to the nature of its business the group is 
exposed to commodity price risk related to the 
production or packaging of finished goods such 
as oilrelated and a diverse range of other  
raw materials this risk is however managed 
primarily through mediumterm contracts with 
certain key suppliers and is not viewed as being 
a material risk the group is not exposed to 
equity securities price risk
interest rate risk
the group has both interestbearing and non 
interestbearing assets and liabilities the group 
monitors its interest expense rate exposure on  
a regular basis the group manages its interest 
rate exposure on its gross financial assets by 
using fixed rate term deposits
credit risk
the group has no significant concentrations of 
credit risk financial institution counterparties 
are subject to approval under the group’s 
counterparty risk policy and such approval is 
limited to financial institutions with a bbb 
rating or above the group uses bbb and 
higher rated counterparties to manage risk and 
uses bbb rated counterparties by exception  
the amount of exposure to any individual 
counterparty is subject to a limit defined within 
the counterparty risk policy which is reassessed 
annually by the board
liquidity risk
the group has bilateral credit facilities with 
highquality international banks all of these 
facilities have similar or equivalent terms and 
conditions and have a financial covenant 
which is not expected to restrict the group’s 
future operations the committed borrowing 
facilities together with available uncommitted 
facilities and central cash and investments are 
implementation of this strategy will increase 
our levels of interest expense compared to 
recent years that benefited from low interest 
rates since 2008 
we are subject to risks relating to estimates and 
assumptions that we are required to make and 
that affect the reported amounts in our 
financial statements 
the preparation of our financial statements 
requires management to make estimates and 
assumptions that affect the reported amounts 
of assets and liabilities at the balance sheet 
date and revenue and expenses during the 
reporting period although estimates are based 
on management’s best knowledge at the time 
actual amounts may ultimately differ from 
those estimates for example measurement  
of intangible assets both in acquisitions and 
business combinations requires us to identify 
such assets and any assumptions and estimates 
of future cash flows and appropriate discount 
rates to value identified assets may be impacted 
by various factors including adverse economic 
conditions or integration issues 
compliance and routine risks
in order to manage the more numerous and 
routine risks the group maintains a complete 
and robust governance framework this 
consists of a full set of policies processes and 
systems covering all aspects of compliance 
with international and local laws as well as with 
the group’s stated minimum control standards
management provides primary assurance by 
driving risk compliance through their respective 
area regional or functional responsibility this  
is done through regular and detailed business 
reviews secondary assurance is provided 
independently through a combination of 
internal and external audit covering all aspects 
of the group’s operations
financial risk management
the group’s multinational operations expose  
it to a variety of financial risks that include the 
effects of changes in foreign currency exchange 
rates foreign exchange risk market prices 
interest rates credit risks and liquidity 
the group has in place a risk management 
programme that uses foreign currency financial 
instruments including debt and other 
instruments to limit the impact of these risks 
on the financial performance of the group
the group’s financing and financial risk 
management activities are centralised into 
group treasury gt to achieve benefits of scale 
and control gt manages financial exposures  
of the group centrally in a manner consistent 
with underlying business risks gt manages 
only those risks and flows generated by the 
underlying commercial operations and 
speculative transactions are not undertaken 
the board reviews and agrees policies 
guidelines and authority levels for all areas  
of treasury activity and individually approves 
significant activities gt operates under the 
close control of the cfo and is subject to 
periodic independent reviews and audits  
both internal and external
detergent and in respect of our prescription 
drug suboxone sublingual film infringement  
of our patentprotected intellectual property 
may occur particularly in emerging market 
countries certain countries may adopt 
measures to facilitate competition within their 
markets from generic manufacturers and 
refuse to recognise patent protection for 
example a recent decision in india not to grant 
a new patent to an industry participant for a 
modified form of a drug that holds patent 
protection elsewhere reflects the heightened 
risk we may face in emerging markets 
additionally expiry of our patents may increase 
competition and pricing pressures and 
adversely impact our sales revenue if generic 
products in the same or similar product class 
were to emerge we could be similarly 
impacted if competitors lose patent protection 
in a product class in which we compete 
we may face challenges to our intellectual 
property rights including allegations of 
infringement of others’ rights 
we may face challenges to our intellectual 
property rights from third parties who allege 
that we are infringing on their rights if we  
are unable to successfully defend against 
allegations of infringement we may face 
various sanctions including injunctions 
monetary sanctions for past infringement 
product recalls alterations to our intellectual 
property products andor packaging which 
could result in significant expense and negative 
publicity and may have a material adverse 
effect on our financial condition and results  
of operations 
our business may be adversely affected by our 
funding requirements
our liquidity needs are driven by our ability to 
generate cash from operations and the level of 
borrowings and related levels of headroom 
the level of acquisition the level of share 
repurchases and dividends dispositions target 
ratings for our debt and options available to  
us	in	the	equity	and	debt	markets	historically	 
we have obtained our funding from the 
commercial paper market and have benefited 
from the low interest rate environment 
following the financial crisis 
we maintain committed backup credit 
facilities which have remained undrawn since 
fy 2009 at 31 december 2013 we had 
£4350m in undrawn commitments if we  
are not able to access the commercial paper 
market to the extent that we require or at all 
we may need to drawdown amounts under  
our committed bilateral credit facilities which 
accrue interest at floating rates based on 
changes in certain published rates such as 
libor increases in such rates could result in 
significantly higher interest expense for us 
which would negatively affect our results  
of operations 
as part of our strategy to maintain financial 
flexibility as well as to procure additional 
funding for future acquisitions including both 
bolton acquisitions as well as acquisitions that 
may be more material in size we are seeking  
to increase the level of mediumterm funding  100 rb annual report 2013
our relationships and principal risks
considered sufficient to meet the group’s 
projected cash requirements 
funds over and above those required for 
shortterm working capital purposes by the 
overseas businesses are generally remitted to 
gt the group uses the remittances to settle 
obligations repay borrowings or in the event 
of a surplus invest in shortterm instruments 
issued by institutions with a bbb rating or above
capital management
the group’s objectives for managing capital  
are to safeguard the group’s ability to continue 
as a going concern in order to provide returns 
for shareholders and benefits for other 
stakeholders and to maintain an efficient 
capital structure to optimise the cost of capital
in maintaining an appropriate capital structure 
and providing returns for shareholders in 2013 
the company has provided returns to 
shareholders in the form of dividends the 
current details of which are included in the 
financial review for the year on page 15 and 
share buy backs
the group monitors net debt total borrowings 
less cash and cash equivalents shortterm 
available for sale financial assets and financing 
derivative financial instruments and at the year 
end the group had net debt of £2096m 2012 
£2426m the group seeks to pay down net 
debt using cash generated by the business to 
maintain an appropriate level of financial 
flexibility
details of numerical disclosures relating to the 
group’s financial risk management are included 
in note 14 to the financial statements on pages 
70 to 73 rb annual report 2013 101
notes 102 rb annual report 2013
notes rb annual report 2013 103
notes 104 rb annual report 2013
shareholder information
american depositary receipts
reckitt benckiser group plc american depositary receipts adrs are 
traded on the overthecounter market otc under the symbol rbgly 
five adrs represent one ordinary share jp  morgan chase bank na is 
the depositary
if you should have any queries please contact 
jp  morgan chase bank na 
po box 64504 st paul mn 551640504 us 
email jpmorganadrwellsfargocom 
telephone number for general queries 800 990 1135 
telephone number from outside the us 1 651 453 2128 
key dates
announcement of quarter 1 interim 
 management statement 16 april 2014 
annual general meeting 7 may 2014 
payment of final ordinary dividend 29 may 2014 
announcement of interim results 28 july 2014 
payment of interim ordinary dividend september 2014 
announcement of quarter 3 interim  
 management statement 21 october 2014 
preliminary announcement of 2014 results 11 february 2015 
publication of 2014 annual report and accounts april 2015 
annual general meeting may 2015
analysis of shareholders as at 31 december 2013
 no of 
distribution of shares by type of shareholder holdings shares 
nominees and institutional investors 9774 719378732 
individuals 14368 17156447 
total 24142 736535179
 
 no of 
size of shareholding holdings shares
1 – 500 14678 3052238
501 – 1000 4047 2964286 
1000 – 5000  3770 7687368 
5001 – 10000 459 3250149 
10001 – 50000 558 13143965 
50001 – 100000 165 11768568 
100001 – 1000000 366 114891103 
1000000 and above 99 579777502 
total 24142 736535179
‘boiler room’ scams
shareholders who are offered unsolicited investment advice discounted 
shares a premium price for shares or free company or research reports 
should take these steps before handing over any money
1  get the name of the person and organisation 
2  check the financial services register at wwwfsagovukregister to 
ensure they are authorised
3  use the details on the financial services register to contact the firm
4	 	 call	the	fca	consumer	helpline	on	0800	111	6768	if	ther e	ar e	no	
contact details on the register or if they are out of date
5  search the fca’s list of unauthorised firms and individuals to avoid 
doing business with at wwwfcaorgukscams
6  if you are approached by fraudsters please contact the fca using their 
helpline or share fraud reporting form at wwwfcaorgukscams
7  consider getting independent financial advice 
using an unauthorised firm to buy or sell shares or other investments will 
prohibit access to the financial ombudsman service or financial services 
compensation scheme fscs if things go wrong
electronic communications
the shareholders passed a resolution at the 2008 agm enabling the 
company’s website to be used as the primary means of communication 
with them shareholders who have positively elected or are deemed to 
have consented to receiving electronic communications in accordance 
with the companies act 2006 will receive written notification whenever 
shareholder documents are available to view on the company’s website
shareholders who have received a notice of availability of a document  
on the company’s website are entitled to request a hard copy of any  
such document at any time free of charge from the company’s registrar 
shareholders can also revoke their consent to receive electronic 
communications at any time by contacting the registrar
the company’s 2013 annual report and notice of the 2014 agm are 
available to view at wwwrbcomonlineannualreport2013 
the investor relations section of the website contains uptodate 
information for shareholders including
•	 detailed	shar e	price	information
•	 financial	r esults
•	 dividend	payment	dates	and	amounts
•	 access	to	shar eholder	documents	including	the	annual	report	and
•	 shar e	capital	information
annual general meeting 
to be held on wednesday 7 may 2014 at 1115 am at the london 
heathr ow	marriott	hotel	bath	road	hayes	middlesex	ub3	5an
every shareholder is entitled to attend and vote at the meeting  
the notice convening the meeting is contained in a separate document 
for shareholders shareholders who have registered for electronic 
communication can
•	 receive	an	email	alert	when	shar eholder	documents	ar e	available	
•	 	 v iew	the	annual	report	and	notice	of	agm	on	the	day	they	ar e	
published
•	 cast	their	agm	vote	electr onically	and
•	 manage	their	shar eholding	quickly	and	secur ely	online
final dividend for the year ended 31 december 2013
the directors have recommended a final dividend of 77p per share for 
the year ended 31 december 2013 subject to approval at the 2014 
agm payment will be on 29 may 2014 to all shareholders on the 
register as at 21 february 2014
company secretary 
elizabeth richardson
registered office 
103105	bath	road	slough	berkshir e	sl1	3uh 
telephone 01753 217800  
facsimile 01753 217899
registered and domiciled in england 
no 6270876
company status
public limited company
auditors 
pricewaterhousecoopers llp
solicitors 
slaughter and may
registrar and transfer office
the company’s registrar computershare is responsible for maintaining 
and updating the shareholder register and making dividend payments
if you have any queries relating to your shareholding please write to  
or telephone the company’s registrar at the following address 
computershare investor services plc 
the pavilions bridgwater road bristol  bs99 6zy 
reckitt benckiser shareholder helpline 0870 703 0118
website wwwcomputersharecomuk
shareholder information the following are trademarks of the reckitt benckiser group of companies  
or used under license  
airborne air wick aqua mist bang calgon cherry blossom clearasil dcon 
dermicool dermodex dettol digestive advantage durex easywax filter  fresh 
finish flip  fresh frank’s red hot french’s freshmatic gaviscon graneodin harpic 
harpic hygienic luftal lysol manyanshuning megared micostatin move free 
mortein mucinex naldecon notouch nugget nurofen our home our planet 
performax intense picot power plus quantum quantumatic resolve schiff schiff 
vitamins scholl spray ‘n wash strepsils suboxone subutex tempra tiger’s milk 
vanish veet veja woolite as well as reckitt benckiser and the rb kite logos 
designed and produced by the workroom wwwworkroomcouk
cover photo credits getty images istock save the children  
lucia zoro  save the children
printed by leycol printers limited
the paper used for this report and the envelope used for postal 
distribution are made from fsc forest stewardship council® 
certified sustainable forest stocks
this report is part of an integrated approach to reporting our total 
performance our family of reports also includes the annual report 
highlights the sustainability report on our social and environmental 
responsibilities and regularly updated corporate responsibility information 
at wwwrbcom
left annual report highlights 2013
right sustainability report 2013 report to be published at wwwrbcom reckitt benckiser group plc 
103105 bath road 
slough berkshire sl1 3uh 
united kingdom
wwwrbcom


Summary:
 rb annual report 2013 1
strategic report   chairman’s statement
will update shareholders on the review’s 
progress during 2014 
cash and dividend
the strong growth produced strong 
cash flow allowing the company to pay 
down more of its debt the company is 
in strong financial health and your board 
is proposing a final dividend of 77p per 
share this brings the dividend for the 
year to 137p per share an increase of 
2 over 2012 
corporate social responsibility
in addition to being a financial 
contributor to society the company  
is also a contributor to environmental 
and humanitarian needs of society  
the company was proud to announce 
a major new global initiative with save 
the children a longstanding partner to 
address the scourge of child deaths from 
diarrhoea which is highly preventable 
through better health and hygiene 
corporate governance
the detailed corporate governance 
statement and report on pages 24 
to 32 reflects the board’s recognition 
of the importance of our governance 
responsibilities 
the board conducted regular reviews 
of the performance of the business 
its strategy brands human resources 
corporate responsibility and reputation 
and business risks it was decided 
to change the trading name of the 
company to ‘rb’ moving away from  
the harder to say spell and search 
‘reckitt benckiser’ there are no  
changes to legal entity names
board of directors
it was with great regret that i accepted 
in june the resignation due to ill health 
of graham mackay our then senior 
independent director graham sadly 
passed away in december he delivered 
great service to your company over 
his eight years on the board and will 
be missed andré lacroix has been 
appointed senior independent director
on behalf of the board i have 
pleasure in reporting that your 
company delivered strong  
results ahead of targets for  
2013 net revenue excluding  
rb pharmaceuticals grew 7 
operating profit adjusted
1
 excluding 
rb pharmaceuticals grew 7 and 
adjusted
1
 net income grew at 2  
all at constant exchange rates 
the company’s twin strategy is to  
focus on growing the health and 
hygiene brands of its core portfolio and 
to achieve a stronger emerging market 
penetration to better balance its historic 
developed market strength 
at the end of 2013 health and hygiene 
brands represented 72 of the core 
portfolio and the emerging market  
areas represented 43 this progress  
is pleasing but equally so were the  
results in europe and north america 
which achieved growth in every  
quarter of the year our acquisitions  
more fully reported elsewhere in  
this report contributed materially to 
these achievements 
rb pharmaceuticals
after the entry of generic us  
competition to rb pharmaceuticals’ 
suboxone and the stable performance  
of the film alternative your board 
announced a strategic review of this  
part of the company the review will 
recommend the optimal future for  
rb pharmaceuticals and the company 
new purposeinspired strategy 
delivers strong performance
in december we appointed  
nicandro durante as an independent 
nonexecutive director nicandro an 
italianbrazilian and ceo of bat brings 
significant consumer goods industry and 
emerging markets experience also in 
december richard cousins advised me 
that he would not be available to stand 
for reelection to the board i thank 
richard for his contributions to our 
company judith sprieser and kenneth 
hydon will step down as chairs of the 
remuneration and audit committees 
respectively in 2014 they have both 
been extraordinarily effective chairs of 
the committees
your nominations committee is 
actively involved in a project to appoint 
additional nonexecutive directors 
annual general meeting resolutions
the resolutions to be voted on at our 
agm on 7 may 2014 are explained in 
the notice of meeting including the 
new requirement to offer shareholders 
a binding vote on our remuneration 
policy the details of which are set out in 
the directors’ remuneration report on 
pages 34 to 46 we believe this policy 
has served the company well and hope 
shareholders will endorse it 
thanks 
on behalf of the board i thank our 
ceo rakesh kapoor his executive 
management team and our employees 
globally for their commitment to 
delivering strong performance the board 
is often reminded that an enduring 
differentiator of the company is its 
people and their positive performance
minded culture my thanks go also to 
my board colleagues for their continued 
support and guidance 
the board thanks you our shareholders 
for your ongoing confidence in the 
company 
adrian bellamy chairman
1
   adjusted to exclude the impact of exceptional items