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  • Glossary





    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



    Billion cubic feet


    Barrels of oil



    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


    Gigawatt hour


     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



    Million barrels of oil equivalent


    Million therms


    Megawatt hour



    Net book value


    Non-governmental organisation



    Property, plant and equipment


    Petroleum revenue tax



    Renewable obligation certificate


    Retail Price Index



    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



    Value added tax


    Value in use

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Performance Measures

Other Statutory Information

Management report

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

Full details of acquisitions and disposals are disclosed in the Business Review and notes 30 and 31 to the Financial Statements.

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.

Share capital

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.

Material shareholdings

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
of holding
Invesco Limited 258,200,185 4.99% 258,200,185 4.99% Indirect
Legal & General Group 201,705,927 3.89% 201,705,927 3.89% Direct
Petronas 199,375,000 3.85% Direct