Annual report 2010 - Imperial Tobacco Group

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Consolidated Cash Flow Statementfor the year ended 30 September 2010£ million NotesYear ended30 September2010Year ended30 September2009Cash flows from operating activities 25 2,859 3,569Cash flows from investing activitiesInterest received 29 57Purchase of property, plant and equipment (269) (245)Proceeds from sale of property, plant and equipment 26 69Purchase of intangible assets – software (14) (8)Purchase of intangible assets – trademarks and supply agreements – (4)Purchase of businesses – net of cash acquired 24 (46)Proceeds from sale of businesses – net of cash disposed 5 –Net cash used in investing activities (199) (177)Strategy Performance Governance FinancialsCash flows from financing activitiesInterest paid (609) (562)Cash from employees on maturity/exercise of share schemes 5 6Settlement of exchange rate derivative financial instruments (299) (5)Increase in borrowings 1,542 4,324Repayment of borrowings (2,790) (6,042)Reduction/(increase) in collateralisation deposits 70 (125)Repayment of obligations under finance leases (2) (2)Dividends paid to non-controlling interests (12) (12)Dividends paid to owners of the parent (773) (640)Net cash used in financing activities (2,868) (3,058)Net (decrease)/increase in cash and cash equivalents (208) 334Cash and cash equivalents at start of year 1,036 642Effect of foreign exchange rates on cash and cash equivalents (55) 60Cash and cash equivalents at end of year 773 1,036102
Accounting PoliciesBasis of PreparationThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standardsand IFRIC interpretations as adopted by the European Union (collectively IFRS) and with those parts of the Companies Act2006 applicable to companies reporting under IFRS.The financial statements have been prepared under the historical cost convention except where fair value measurement isrequired under IFRS as described below in the accounting policies on financial instruments, retirement benefit schemes,share schemes, intangible assets and property, plant and equipment.The preparation of the consolidated financial statements requires management to make estimates and assumptions thataffect the reported amounts of revenues and expenses during the period and of assets, liabilities and contingent liabilitiesat the balance sheet date. The key estimates and assumptions are set out in the Critical Accounting Estimates andJudgements note on pages 110 and 111. Such estimates and assumptions are based on historical experience and variousother factors that are believed to be reasonable in the circumstances and constitute management’s best judgement atthe date of the financial statements. In the future, actual experience may deviate from these estimates and assumptions.This could affect future financial statements as the original estimates and assumptions are modified, as appropriate,in the year in which the circumstances change.A summary of the more important Group accounting policies is set out below.Adoption of IAS 1 (Revised) Presentation of Financial StatementsThe adoption of IAS 1 (Revised) has had no impact on the net assets or results of the Group, resulting only in changes tothe format and content of the primary statements including derivative financial instruments assets and liabilities (includingcomparatives) being classified according to their settlement as described below.Classification of Derivative Financial Instruments Between Assets and LiabilitiesDerivative financial instruments providing commercial hedges but not designated as hedges for accounting purposesunder IAS 39 were previously all classified as current assets and liabilities. Since it is our intention to hold these financialinstruments to maturity we have, following the adoption of IAS 1 (Revised), now classified them according to theircontractual cash settlements with the following effects.30 September 2009 30 September 2008Previouslyreported Reclassification ReclassifiedPreviouslyreported Reclassification Reclassified£ millionNon-current derivative financialinstrument assets 9 125 134 76 44 120Current derivative financialinstrument assets 239 (41) 198 97 2 99Current derivative financialinstrument liabilities (564) 280 (284) (238) 115 (123)Non-current derivative financialinstrument liabilities (669) (364) (1,033) (2) (161) (163)Net derivative financialinstruments (985) – (985) (67) – (67)At 30 September 2010, under the previous method of classification, non-current derivative financial instrument assetswould have been nil, current derivative financial instrument assets would have been £549 million, current derivative financialinstrument liabilities would have been £718 million and non-current derivative financial instrument liabilities would havebeen £271 million.The revised treatment has no effect on profit or loss or net assets in 2008, 2009 or 2010.Adoption of IFRS 8 Operating SegmentsThe adoption of IFRS 8 has resulted in some presentational changes, but has not significantly affected the overall level ofsegmental analysis provided. We have taken advantage of early adoption of 2009 annual improvements to IFRS 8 not todisclose segmental asset measures as they are not reported to the chief operating decision maker.103
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Imperial Tobacco Group PLCAnnual Re
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…to deliver sustainableshareholde
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Operational HighlightsDelivering Su
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and product portfolio to evolving c
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In this section9 Strategic Review10
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Our StrategyWe are focused on deliv
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Total Tobacco5 % Our Powerful Brand
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Our global strategic cigarette bran
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Our global team is fully aligned be
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Satisfying consumers and aligning o
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We are a responsive business with s
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Operating responsibly, combined wit
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Our growth drivers of sales growth,
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Principal Risks and UncertaintiesA
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Competition LawOverviewWe take comp
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Reconciliation of Adjusted Performa
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Key Performance Indicators (KPIs) 1
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Lambert & Butler and Richmond remai
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Within this the travel retail marke
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OutlookThe strength of our portfoli
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Blondes. In the Middle East, we aga
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Corporate ResponsibilityOur Corpora
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Corporate Responsibility and our St
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We have revised our IMS and employe
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Environmental Performance 1Absolute
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across the business. More informati
Page 53 and 54: Supplier RelationshipsOur main supp
Page 55 and 56: Non-financial performance indicator
Page 57 and 58: “High standards of corporategover
Page 59 and 60: 5. Pierre Jungels, CBE (HON), PHD,
Page 61 and 62: Management and Corporate StructureB
Page 63 and 64: Meetings of the Board, Board Commit
Page 65 and 66: and supplemented by our Non-Executi
Page 67 and 68: 6 Performance evaluation: How do we
Page 69 and 70: The Board recognises that we operat
Page 71 and 72: Assurance process for financial rep
Page 73 and 74: - receiving reports from, and quest
Page 75 and 76: Directors’ Report: Other Informat
Page 77 and 78: - state whether IFRSs as adopted by
Page 79 and 80: We understand that a purported coll
Page 81 and 82: This Report covers the following:1
Page 83 and 84: 2 Directors’ Emoluments for the Y
Page 85 and 86: Directors’ Interests in Ordinary
Page 87 and 88: Executive Directors’ Service Agre
Page 89 and 90: When setting base salary the Remune
Page 91 and 92: First ElementFifty per cent of the
Page 93 and 94: In respect of the October 2007 - Oc
Page 95 and 96: Any annual bonus earned up to 100 p
Page 97 and 98: Benefit Trusts have also been provi
Page 99 and 100: Independent Auditors’ Reportto th
Page 101 and 102: Consolidated Statement ofComprehens
Page 103: Consolidated Statement of Changes i
Page 107 and 108: Duty and Similar ItemsDuty and simi
Page 109 and 110: InventoriesInventories are stated a
Page 111 and 112: Restructuring CostsSignificant one-
Page 113 and 114: Property, Plant and Equipment and I
Page 115 and 116: Tobacco net revenue£ million 2010
Page 117 and 118: 3 Restructuring Costs£ million 201
Page 119 and 120: Factors affecting the tax charge fo
Page 121 and 122: 9 Intangible Assets2010£ million G
Page 123 and 124: 10 Property, Plant and Equipment201
Page 125 and 126: 13 Trade and Other Receivables2010
Page 127 and 128: Sensitivity analysisIFRS 7 requires
Page 129 and 130: At 30 September 2009Balance sheetam
Page 131 and 132: (iii) Currency analysis and effecti
Page 133 and 134: (iv) Derivative financial instrumen
Page 135 and 136: Matures in financial year ending in
Page 137 and 138: The following tables are provided i
Page 139 and 140: Matures in financial year ending in
Page 141 and 142: (vi) Hedge of net investments in fo
Page 143 and 144: 18 Retirement Benefit SchemesThe Gr
Page 145 and 146: Assumptions regarding future mortal
Page 147 and 148: 21 Share SchemesThe Group recognise
Page 149 and 150: Year from 1 October 2008 to 30 Sept
Page 151 and 152: 23 CommitmentsCapital commitments£
Page 153 and 154: 27 Reconciliation of Cash Flow to M
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Imperial Tobacco Group PLC Balance
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(iii) Debtors: Amounts Falling Due
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Principal SubsidiariesThe principal
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Shareholder InformationRegistered O
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IndexAAccounting Policies 103Acquis
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Annual report 2010 - Imperial Tobacco Group

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