Glossary

A

AA1000: An assurance model designed to improve the accountability and performance of organisations by learning through stakeholder engagement and increasing quality in social and ethical accounting, auditing and reporting.
Adjusted attributable earnings: Adjusted profit after tax attributable to the equity holders of the company.
Adjusted distribution margin: The adjusted profit from operations for the Logistics segment divided by distribution fees for the Logistics segment.
Adjusted Earnings per share: Adjusted profit after tax attributable to the equity holders of the Company divided by the weighted average number of shares in issue during the period excluding shares held to satisfy employee share schemes and shares purchased by the Company and held as Treasury shares.
Adjusted measures: Management believes that reporting adjusted measures provides a useful comparison of business performance and reflects the way in which the business is controlled. Accordingly, adjusted measures of profit from operations, net finance costs, profit before tax, taxation, attributable earnings and earnings per share exclude, where applicable, amortisation of acquired intangibles, restructuring costs, retirement benefits net financing income, fair value gains and losses on derivative financial instruments in respect of commercially effective hedges, one-off acquisition accounting adjustments, brand divestment gains and related taxation effects. The adjusted measures in this report are not defined terms under International Financial Reporting Standards and may not be comparable with similarly titled measures reported by other companies.
Adjusted net debt: Management monitors the Group’s borrowing levels using adjusted net debt which excludes interest accruals, the fair value of derivative financial instruments providing commercial cash flow hedges and finance lease liabilities.
Adjusted operating margin: The adjusted profit from operations for the Tobacco business divided by net revenue for the Tobacco segment.
Adjusted profit from operations: Profit from operations adjusted for amortisation of acquired intangibles, restructuring costs, one-off acquisition accounting adjustments and brand divestment gains.
Amortisation: A systematic charge to the income statement to write off the value of intangible assets with finite lives over their useful lives.
Attributable earnings: Profit after tax attributable to the equity holders of the company.
Assurance: Independent external validation to substantiate the management process and the veracity of any accounts of social and environmental performance as accurate, fair and meaningful.
Audit: Independent examination of facts and processes, usually to identify opportunities for improvement.

B

Base year: Historic datum (a specific year or an average over multiple years) against which a company’s emissions are tracked over time.
Benchmarking: Comparing one company with others (or one part of a company with others) on the basis of particular criteria.
BiE: An annual index of the environmental performance of companies produced by Business in the Community in the UK.
Biodiversity: The diversity of plant and animal life in a particular habitat; the range of species in a location.

C

Cap and trade system: A system that sets an overall emissions limit, allocates emissions allowances to participants and allows them to trade allowances and emission credits with each other.
Capacity building: Efforts aimed at developing human skills or social infrastructures within an organisation, community or country.
Carbon Disclosure Project: A co-ordinating secretariat for a group of institutional investors that asks the 500 largest companies in the world by market capitalisation to disclose investment-relevant information concerning their greenhouse gas emissions.
Carbon monoxide: A natural gas formed by the incomplete burning of organic material.
Cash conversion rate: Cash conversion is calculated as cash flow from operations before tax payments less net capital expenditure relating to property, plant and equipment and software as a percentage of adjusted profit from operations.
Child labour: We use the International Labour Organisation definition of child labour in conventions 138 and 182. For more information, please visit www.ilo.org
Competent authorities: Authorities to which governments or pan-governmental organisations (such as the EU) have delegated competence to deal with specific issues.
Consumers: Smokers, people who use our products.
Corporate responsibility (CR): Organisations fulfilling the social and environmental responsibilities and duties within their sphere of influence; achieved by the design and implementation of a comprehensive and integrated approach.
Customers: Our trading partners and distributors.

D

DEFRA: UK Department for Environment, Food and Rural Affairs that champions sustainable development, helping the UK Government to deliver economic, social and environmental sustainability. DEFRA has a strong international dimension, with a critical role in both EU and global policy making. DEFRA has published guidelines to help businesses address their most significant environmental impacts, and report on them in a way that meets the needs of current regulation.
Dialogue: Carefully planned and structured two-way, active and interactive discussion and listening. An essential management skill, needed to truly understand stakeholders’ views.
Distribution fees: Distribution fees comprises the Logistics segment revenue excluding the cost of distributed products. Management considers this an important measure in assessing the profitability of Logistics operations.

E

Earnings per share – adjusted: Adjusted profit after tax attributable to the equity holders of the Company divided by the weighted average number of shares in issue during the period excluding shares held to satisfy employee share plans and shares purchased by the Company and held as Treasury shares.
Earnings per share – basic: Profit after tax attributable to equity holders of the Company divided by the weighted average number of shares in issue during the period excluding shares held to satisfy employee share plans and shares purchased by the Company and held as Treasury shares.
Earnings per share – diluted: As for basic earnings per share except that the weighted average number of shares includes the weighted average number of shares that would be issued on conversion of all the dilutive potential ordinary shares arising from rights under the employee share plans.
Effective tax rate: The tax charge in the income statement as a percentage of profit before taxation.
Eliminating Child Labour in Tobacco (ECLT) Foundation: A partnership established by organisations representing tobacco workers, growers, suppliers and manufacturers, supported by the International Labour Organisation (ILO), which aims to improve access to education and ensure alternatives to childhood working.
Enterprise value (EV): Market capitalisation plus net debt.
Environmental tobacco smoke: Other people’s smoke (also referred to as ETS and second-hand smoke).
Ex-dividend date: The date from which shares are traded without the right to the most recently declared dividend payment.

F

Five-for-Five: Our five key areas of focus for the five years up to 2012 that commit us to better carbon management; product portfolio balance; supplier sustainability; empowering our local management to better address issues of corporate responsibility; and further increasing our transparency in how we adhere to Group policies.
Fine cut tobacco: Loose tobacco which is used with rolling papers or filter tubes (including make-your-own and roll-your-own).
FMC: Factory-made cigarettes.
Framework Convention on Tobacco Control: The World Health Organisation’s Framework Convention on Tobacco Control (FCTC) is the global tobacco treaty that seeks to regulate tobacco products.
FY: Imperial Tobacco Group’s Financial Year (1 October to 30 September).

G

Global Reporting Initiative (GRI): An international, multi-stakeholder effort that has developed a voluntary framework and guidelines for economic, social and environmental reporting.
Governance: In general, the system by which business corporations are directed and controlled. In this context, the incorporation of non-financial impacts into top-level management responsibility.
Green energy: Energy from renewable sources.
Greenhouse gases: Gases which trap the sun's heat in the atmosphere, producing the greenhouse effect; greenhouse gases include carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF₆).
GWh: A unit of energy consumption – gigawatt-hour.

I

Impact assessment: A detailed and impartial assessment of specific aspects of an organisation’s social, product, process or environmental impacts.
Indicators: Carefully considered measures of social or environmental success that can be used to monitor performance and influence decision-making.
Integrated pest management: An effective approach to pest management which is safe, productive and sustainable; minimises the use of pesticides through a wide range of practices aimed at growing a healthy crop.
International Labour Organisation (ILO): The ILO is the specialised agency of the United Nations which seeks the promotion of social justice and internationally recognised human and labour rights; the global body responsible for drawing up and overseeing international labour standards.
International Marketing Standards: Imperial Tobacco’s international standards for marketing its products.
ISO: The International Organisation for Standardisation, widely known as ISO, is an international standard-setting body comprised of representatives from various national standards organisations. It promulgates world wide industrial and commercial standards.
ISO 14001: A specification for an Environmental Management System issued by the International Standards Organisation.

K

Key Performance Indicators(KPI): An important measure defined by a company to measure its performance on a particular topic.

L

Licence to operate: Maintaining commercial legitimacy through the demonstration of responsible practices.

M

Market capitalisation: The market price of a share multiplied by the number of shares in issue.
Market share: Market share represents our best estimate of the volumes of our brands sold as a percentage of total market volumes during the reporting period, including the most appropriate independent data available. We use latest monthly data only where the moving annual total would be misleading – for example, if market entry or a significant product launch has taken place part way through the reporting period. Market share represents our best estimate of the volumes of our brands sold as a percentage of total market volumes during the reporting period. We use latest monthly data only where the share or the average would be misleading – for example if market entry or a significant product launch has taken place part way through the reporting period.
Microfinance: Sustainably delivering financial services to poor or low-income communities; providing them with access to loans, savings accounts and financial education to help improve their livelihoods and plan for their futures.
MWh: A unit of energy consumption – megawatt-hour.
MYO: Make your own: tobacco which is made into a cigarette using a tube machine and filter tubes.

N

Nicotine: A naturally occurring substance in plants, including tobacco.
Net Revenue: Net revenue comprises the Tobacco segment revenue less duty and similar items. Management considers this an important measure in assessing the profitability of Tobacco operations.

O

OECD (Organisation for Economic Cooperation and Development): The OECD is an organisation of 30 member countries committed to democracy and the market economy.
OECD Guidelines for Multinational Enterprises: Guidelines for the operation of multinational companies that provide voluntary principles and standards for responsible business conduct in a variety of areas including employment, industrial relations, human rights, environment, information disclosure and combating bribery.
OHSAS 18001: Issued by the British Standards Institute in 1999, this is an assessment and certification scheme for occupational health and safety management systems.
OHS&E: Occupational Health, Safety and the Environment.
Other tobacco products (OTP): Tobacco products other than cigarettes i.e. fine cut tobacco, cigars, pipe tobacco, snuff and snus.

P

Private label: An exclusive retailer or distributor brand usually in the low-price segment.
Productivity: Productivity is measured as factory output divided by paid hours.

R

REACH: The Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulations aim to improve the protection of human health and the environment from risks that can be posed by chemicals.
Renewable sources of energy: Energy sources which are essentially inexhaustible, for example solar radiation, wind and moving water.
RIDDOR: Reporting of injuries, diseases and dangerous occurrences regulations in the UK.
Roll your own (RYO): Tobacco which is used with rolling papers to hand make cigarettes.

S

SA8000: A human rights standard from Social Accountability International based on international workplace norms of the ILO, the Universal Declaration of Human Rights and the UN Convention on the Rights of the Child.
Singles Make Your Own: Pre-rolled cartridges of tobacco that are inserted into separately sold cigarette paper tubes with filters using a special device resembling a pen.
Snus: Snus is a moist oral tobacco product. It is manufactured and consumed primarily in Sweden and Norway.
Social Responsibility in Tobacco Production (SRiTP) programme: A tobacco industry initiative to assess the environmental and social impact of tobacco growing and processing.
Socially responsible investment (SRI) analysts: Advisers to investors who specialise in the ethical, social and environmental aspects of companies' performance.
Stakeholder engagement: Involvement of a company with those affected by, or who can affect, its business.
Stakeholders: Those individuals or groups who impact on or who are impacted by an organisation and its activities.
Stewardship: Exercising reasonable care, generally related to products and processes.
Supply chain: Those individuals and organisations providing raw materials and services to a company.

T

Tidyman logo: A logo depicting a person throwing litter into a bin, used internationally to encourage suitable disposal of waste.
Total shareholder return: The total investment gain to shareholders, resulting from the movement in the share price and assuming dividends are immediately reinvested in shares.
Travel Retail: Products made available in a market principally for travelling consumers.

U

UK Health & Safety Executive (HSE): The UK Health and Safety Commission (HSC) and the UK Health and Safety Executive (HSE) are responsible for the regulation of almost all the risks to health and safety arising from work activity in the UK.

V

Verification: Independent examination of the validity of data and statements made.
Volumes: Our volume KPI represents the number of units sold in the period.

W

Weighted average cost of capital: The weighted average of the costs of various types of capital that finance a company or a project. Capital would generally include a mix of debt and equity.

Reports

Corporate Responsibility Review 2009

Annual report 2008