Operating Review continuedStrategy Performance Governance Financials<strong>Tobacco</strong> logistics delivers products for domestic andinternational tobacco manufacturers, including <strong>Imperial</strong><strong>Tobacco</strong>, to tobacconists and other sales outlets in Spain,France, Italy, Portugal and Poland. The business is run onan operationally neutral basis, providing individual customersolutions based on our cutting edge technology and ourspecialised network. The high quality of the service weprovide has allowed us to achieve a market share above 90per cent in the distribution of tobacco in Spain, France andItaly and just under 20 per cent in Portugal.Our integrated logistics services can assure full traceabilitythroughout the entire logistics value chain, from pick-up andtransport of the product at customers’ factories to post-saleservice. We can also provide specialised services for customersin a number of different sectors in Spain, Portugal, France andItaly: convenience, telecommunications, transportation,pharmaceutical, publishing, lottery and others.We are market leaders in the distribution of convenienceproducts to petrol stations in Spain, Portugal and France.Convenience products are also distributed to other pointsof sales in these countries and Italy including tobacconists,bakeries and grocery stores.We have an e-transaction business with our own technologicalplatform for e-recharge, installed in the main network of pointsof sale including in tobacconists, kiosks and convenience shopsin Spain, Portugal and France. In this area, different productsare offered including telephone cards and transport tickets.We are present in the transportation segment, throughcourier and industrial parcel activities in Spain and Portugal.Our long distance transport network across Europe allowsus to provide our customers with an integral solution for theirlogistics needs covering all services, from their factories tothe point of sale. In addition, our logistics business is theleading logistics provider in Spain and Portugal in differentsectors including pharmaceutical and publishing.Our PerformanceDistribution fees were £936 million (2009: £964 million) withadjusted operating profit of £176 million (2009: £177 million).Given current economic conditions, our overall logisticsbusiness has performed robustly.In tobacco logistics, in spite of volume declines, our businesshas been resilient. In Spain, we have offset market declineswith price increases and cost saving initiatives, performingahead of our expectations. In France, we delivered a goodperformance with market volumes broadly stable and in Italyour results benefited from price increases.In other logistics, our focus continues to be on maintainingour profitability while continuing to seek opportunities toprofitably grow our operations. We have continued to gainmarket share in our French wholesale business and weachieved strong volume growth of 15 per cent in our pharmadivision. Following the signing of our joint venture last yearto provide a range of services to one of the Spanish Lotterycompanies, we have made an upfront investment andcommenced operations.OutlookWe will further consolidate our leading positions and focuson our core profitable activities in currently challenging marketconditions. With our ongoing emphasis on enhancing ourservice levels to existing customers while seeking opportunitiesto extend our logistics footprint combined with cost savinginitiatives, we believe our logistics business will continue tobe effectively positioned.40
Corporate ResponsibilityOur Corporate Responsibility strategyis integral to our overall businessstrategy and is embedded throughoutthe <strong>Imperial</strong> <strong>Tobacco</strong> <strong>Group</strong>.Corporate responsibility is integral to our business success.We are committed to operating in a way that is financially,socially and environmentally responsible. We believe that thisfocus and commitment enhances our foundation for long-termsustainable sales growth.Information within this ReportReflecting our belief that operating in a responsible manneris simply part of how we do business, this year’s annual<strong>report</strong> incorporates our Corporate Responsibility Reviewto provide stakeholders with a comprehensive overview ofour activities and achievements. Our performance review isstructured around our strategy and highlights the progresswe have made against our current objectives and the targetswe are setting for the future.Key information about CR within this <strong>report</strong> can be foundas follows:22 Key Performance Indicators25 Principal Risks and Uncertainties41 CR Performance Review53 Non-Financial Performance Indicators54 GovernanceCR Assurance and VerificationStatement from Corporate Citizenship<strong>Imperial</strong> <strong>Tobacco</strong> commissioned Corporate Citizenship toprovide external assurance on its Corporate Responsibility(CR) <strong>report</strong>ing for <strong>2010</strong>, including this corporate responsibilitysection of its <strong>Annual</strong> Report and Accounts and key parts ofthe corporate responsibility section of its website.<strong>Imperial</strong> <strong>Tobacco</strong> has chosen to use the AA1000 AssuranceStandard (AA1000AS) 2008. Our assurance is a Type 1 andthe level of assurance offered is moderate as defined by theStandard. Details of our assurance scope, methodologyand conclusions appear in our full statement published atwww.imperial-tobacco.com/cr.In our opinion <strong>Imperial</strong> <strong>Tobacco</strong>’s CR <strong>report</strong>ing reflects theprinciples of AA1000AS (2008). In our full statement weprovide information on the Company’s performance againstthese principles and provide feedback that can help theCompany and its stakeholders identify where its <strong>report</strong>ingcan be strengthened in future.Corporate CitizenshipLondon, November <strong>2010</strong>SGS VerificationSGS United Kingdom Limited have verified the accuracy andreliability of our occupational health, safety and environmentdata. Their findings are available in their assurance statementpublished on our website.CR Information OnlineMore detailed and background information on our approachis available on our website.Here you will find:––More details on our CR Framework––Our views on important issues in the tobacco industry––A full progress <strong>report</strong> against our objectives set out inour CR Review published in March <strong>2010</strong>––Our performance aligned to the GRI index––Case studies demonstrating our progress––External feedback from our assurance and verificationand our Stakeholder Panel for more information visit:www.imperial-tobacco.com/cr41
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In respect of the October 2007 - Oc
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Any annual bonus earned up to 100 p
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Benefit Trusts have also been provi
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Independent Auditors’ Reportto th
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Consolidated Statement ofComprehens
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Consolidated Statement of Changes i
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Accounting PoliciesBasis of Prepara
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Duty and Similar ItemsDuty and simi
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InventoriesInventories are stated a
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Restructuring CostsSignificant one-
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Property, Plant and Equipment and I
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Tobacco net revenue£ million 2010
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3 Restructuring Costs£ million 201
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Factors affecting the tax charge fo
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9 Intangible Assets2010£ million G
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10 Property, Plant and Equipment201
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13 Trade and Other Receivables2010
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Sensitivity analysisIFRS 7 requires
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At 30 September 2009Balance sheetam
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(iii) Currency analysis and effecti
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(iv) Derivative financial instrumen
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Matures in financial year ending in
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The following tables are provided i
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Matures in financial year ending in
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(vi) Hedge of net investments in fo
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18 Retirement Benefit SchemesThe Gr
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Assumptions regarding future mortal
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21 Share SchemesThe Group recognise
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Year from 1 October 2008 to 30 Sept
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23 CommitmentsCapital commitments£
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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