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Refers to US dollars unless specified otherwise
- <1 year
Less than 1 year
- >1 year
Greater than 1 year
Proven and probable
An entity in which the Group has an equity interest and over which it has the ability to exercise significant influence
Certified emissions reduction (carbon emissions certificate)
Carbon emissions reduction target
Cash generating unit
Consumer Price Index
Earnings before interest, tax, depreciation and amortisation
European Union allowance (carbon emissions certificate)
Financial Services Authority
- FTSE 100
Financial Times Stock Exchange 100 share index, an average of share prices in the 100 largest, most actively traded companies on the London Stock Exchange
Fair value less costs to sell
- g CO2/kWh
Grammes of carbon dioxide per kilowatt hour
Group Financial Risk Management Committee
- IAS 19
The International Accounting Standard related to Employee Benefits. These financial reporting rules include requirements related to pension accounting
- IAS 39
The International Accounting Standard related to financial instruments (recognition & measurement)
International Financial Reporting Standard
- Jointly controlled entity
A joint venture which involves the establishment of an entity to engage in economic activity, which the Group controls jointly with its fellow venturers
- Level 1
Fair value is determined using observable inputs that reflect unadjusted quoted market prices for identical assets and liabilities, for example exchange-traded commodity contracts valued using close-of-day settlement prices. The adjusted market price used for financial assets held by the Group is the current bid price
- Level 2
Fair value is determined using significant inputs that may be either directly observable inputs or unobservable inputs that are corroborated by market data, for example over-the-counter energy contracts within the active period valued using broker-quotes or third-party pricing services and foreign exchange or interest rate derivatives valued using market-based data
- Level 3
Fair value is determined using significant unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management's best estimate of fair value, for example energy contracts within the inactive period valued using in-house valuation techniques
Liquefied natural gas
Comprised of Treasury gilts designated at fair value through profit or loss on initial recognition and available-for-sale financial assets. The fair values of securities are based on quoted market prices, when available. If quoted market prices are not available, fair values are estimated using observable market data
Supplementary charge associated with UK Corporation Tax
- Spark spread
The difference between the price of a unit of electricity and the cost of the gas used to generate it
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Other Statutory Information
The Directors' Report for the year comprises the Chairman's Statement, the Business Review, the Board of Directors and Senior Executives, the Corporate Governance Report, the Remuneration Report and the Other Statutory Information. The management report for the year, as required by the Disclosure and Transparency Rules, is incorporated by reference within the Directors' Report.
Major acquisitions and disposals
Events after the balance sheet date
Events after the balance sheet date are disclosed in note 37 to the Financial Statements.
Related party transactions
Related party transactions are set out in note 35 to the Financial Statements.
Creditor payment policy
It is the Group's policy to:
- agree the terms of payment in advance with the supplier;
- ensure that suppliers are aware of the terms of payment; and
- pay in accordance with contractual and other legal obligations.
The number of days' purchases outstanding as at 31 December 2011 was 33 (2010: 34) for the Group (excluding Centrica Energy Limited) and 30 (2010: 28) for the Company.
Essential contractual arrangements
The Group has contractual and other arrangements with various third parties. Whilst the loss of, or disruption to, certain of these arrangements could affect the operations of the Group temporarily, this Annual Report does not contain information about these third parties as none of the arrangements are considered to be essential to the Group's business.
Significant agreements – change of control
The following are significant agreements to which the Company is party which take effect, alter or terminate in the event of a change of control in the Company following a takeover bid:
- as part of the demerger in 1997, BG Group plc (which is a separately listed company and not a part of the Centrica Group) assigned ownership of the British Gas trade marks and related logos to Centrica for use in Great Britain. BG Group plc has the right to call for a re-assignment of this intellectual property if control of Centrica is acquired by a third party; and
- in 2009, Centrica entered into certain transactions with EDF Group in relation to an investment in British Energy, an owner and operator of nuclear power stations in the UK. The transactions include rights for EDF Group and Centrica to offtake power from existing and new build British Energy nuclear power stations and to invest in new build nuclear power stations. As part of these arrangements, on a change of control of Centrica, the Group loses its rights to participate on the Boards of the companies in which it has invested and on Technical Committees for new nuclear development. Furthermore, where the acquirer is not located in certain specified countries, EDF Group is able to require Centrica to sell out its investments.
Charitable and political donations
During the year, the Group made cash charitable donations to support the community of £1.8 million (2010: £21.1 million). Total community contributions and related activities on community support are described in the appendix to the Directors' Report. Centrica's political donations policy states that Centrica operates on a politically neutral basis. No donations were made by the Group for political purposes during the year. However, in accordance with the Federal Election Campaign Act, Direct Energy has authorised the establishment of a Political Action Committee (PAC), to facilitate voluntary political contributions by its US employees. The PAC is not controlled by Centrica and contributions from the fund are determined by a governing board of PAC members. Participation in the PAC is voluntary for eligible employees. In 2011, contributions to the PAC by employees amounted to US$2,000. However, there were no donations to political organisations by the PAC.
The Company was authorised at the 2011 AGM to allot shares within certain limits and as permitted by the Companies Act. A renewal of this authority will be proposed at the 2012 AGM. The Company's issued share capital as at 31 December 2011, together with details of shares issued during the year, is set out in note 26 to the Financial Statements.
Each ordinary share of the Company carries one vote. Further information on the voting and other rights of shareholders are set out in the Articles and in the explanatory notes which accompany notices of general meetings, all of which are available on the Company's website.
Authority to purchase shares
The Company was authorised at the 2011 AGM to purchase its own shares, within certain limits and as permitted by the Articles. A renewal of this authority will be proposed at the 2012 AGM. Shares repurchased may be cancelled or retained as treasury shares to accommodate requirements for shares under the Group's share incentive schemes. No shares were purchased under this authority during 2011.
At 31 December 2011 and 23 February 2012, Centrica had received notification of the following material shareholdings pursuant to the Disclosure and Transparency Rules:
|31 December 2011||23 February 2012|
| % of share
| % of share
|Legal & General Group||201,705,927||3.89%||201,705,927||3.89%||Direct|