Definitions used in computation of Group Financial Targets for Imperial_Chemical

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Imperial Chemical Industries (ICI)

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ICI » Topics » Definitions used in computation of Group Financial Targets

This excerpt taken from the ICI 20-F filed Mar 31, 2006.

Definitions used in computation of Group Financial Targets

Adjusted earnings per share	Net profit before special items attributable to the equity holders of the parent, divided by weighted average number of shares in issue (less weighted average number of shares held by the Group’s employee share plans) during the period.

Comparable sales growth	Sales growth compared with the prior period excluding the effects of currency translation differences and the impact of acquisitions and divestments.

Comparable trading profit growth	Trading profit growth compared with the prior period excluding the effects of currency translation differences and the impact of acquisitions and divestments.

Earnings per share	Net profit after special items attributable to the equity holders of the parent, divided by the weighted average number of shares in issue (less the weighted average number of shares held by the Group’s employee share plans) during the period.

Net debt	The borrowings of ICI (comprising loans and short-term borrowings other than overdrafts together with related derivatives, obligations under finance leases and the liabilities associated with the forward contracts for the acquisition of own shares (the extent that the contracts are ‘out of the money’)) less cash (including overdrafts), cash equivalents and current asset investments.

Net profit before special items	Net profit attributable to equity holders of the parent before special items.

Reporting segments	The Reporting segments comprise the Group’s National Starch, Quest, Uniqema, Paints and Regional and Industrial businesses.

Return on capital employed (ROCE)	Group trading profit after amortisation of intangibles, before special items, after restructuring amortisation* and after a tax charge^†for the last twelve months divided by the average of capital employed for this current period end and that of the twelve months previously, expressed as a percentage.

	Notes:
	*	Cash expenditure on restructuring is capitalised in each year that expenditure occurs and is then amortised over three years starting on 1 January following the year of the expenditure.

	†	A tax charge is applied to the Group trading profit (before amortisation of intangibles and after restructuring amortisation) using the Group’s effective tax rate for the year (2005: 21%, 2004: 21%).

	Capital employed: Net operating assets plus net operating special items.

	Net operating assets: Property, plant and equipment plus goodwill on acquisitions^øplus operating working capital.

	^ø	Goodwill on acquisitions relates to goodwill capitalised on the Group balance sheet and, therefore, excludes goodwill arising prior to 31 December 1997 (largely that arising on the acquisition of the Unilever Speciality Chemical businesses) which has been charged directly to reserves.

	Net operating special items: For financial ratio calculation purposes only, this is defined as: Asset write downs arising on restructuring plus cash cost of restructuring before tax and after amortisation: for financial ratio purposes only, cash expenditure is capitalised in each year that expenditure occurs and is then amortised over three years starting on 1 January following the year of expenditure.

Segment assets	Segment assets are those operating assets that are employed by a segment in its operating activities and that are either directly attributable to the segments or can be allocated to the segment on a reasonable basis.

Segment liabilities	Segment liabilities are those operating liabilities that are employed by a segment in its operating activities and that are either directly attributable to the segments or can be allocated to the segment on a reasonable basis.

Special items	Special items are those items of financial performance that should be separately disclosed to assist in the understanding of the financial performance achieved by the Group and in making projections of future results, as explained in IAS 1 Presentation of Financial Statements. Special items includes items relating to both continuing and discontinued businesses.

Trading margin	Trading profit, expressed as a percentage of sales.

Trading profit	Operating profit before special items.

Definitions

ICI Annual Report and Accounts 2005 157

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This excerpt taken from the ICI 6-K filed Mar 14, 2006.

Definitions used in computation of Group Financial Targets

Adjusted earnings per share	Net profit before special items attributable to the equity holders of the parent, divided by weighted average number of shares in issue (less weighted average number of shares held by the Group’s employee share plans) during the period.

Comparable sales growth	Sales growth compared with the prior period excluding the effects of currency translation differences and the impact of acquisitions and divestments.

Comparable trading profit growth	Trading profit growth compared with the prior period excluding the effects of currency translation differences and the impact of acquisitions and divestments.

Earnings per share	Net profit after special items attributable to the equity holders of the parent, divided by the weighted average number of shares in issue (less the weighted average number of shares held by the Group’s employee share plans) during the period.

Net debt	The borrowings of ICI (comprising loans and short-term borrowings other than overdrafts together with related derivatives, obligations under finance leases and the liabilities associated with the forward contracts for the acquisition of own shares (the extent that the contracts are ‘out of the money’)) less cash (including overdrafts), cash equivalents and current asset investments.

Net profit before special items	Net profit attributable to equity holders of the parent before special items.

Reporting segments	The Reporting segments comprise the Group’s National Starch, Quest, Uniqema, Paints and Regional and Industrial businesses.

Return on capital employed (ROCE)	Group trading profit after amortisation of intangibles, before special items, after restructuring amortisation* and after a tax charge^†for the last twelve months divided by the average of capital employed for this current period end and that of the twelve months previously, expressed as a percentage.

	Notes:
	*	Cash expenditure on restructuring is capitalised in each year that expenditure occurs and is then amortised over three years starting on 1 January following the year of the expenditure.

	†	A tax charge is applied to the Group trading profit (before amortisation of intangibles and after restructuring amortisation) using the Group’s effective tax rate for the year (2005: 21%, 2004: 21%).

	Capital employed: Net operating assets plus net operating special items.

	Net operating assets: Property, plant and equipment plus goodwill on acquisitions^øplus operating working capital.

	^ø	Goodwill on acquisitions relates to goodwill capitalised on the Group balance sheet and, therefore, excludes goodwill arising prior to 31 December 1997 (largely that arising on the acquisition of the Unilever Speciality Chemical businesses) which has been charged directly to reserves.

	Net operating special items: For financial ratio calculation purposes only, this is defined as: Asset write downs arising on restructuring plus cash cost of restructuring before tax and after amortisation: for financial ratio purposes only, cash expenditure is capitalised in each year that expenditure occurs and is then amortised over three years starting on 1 January following the year of expenditure.

Segment assets	Segment assets are those operating assets that are employed by a segment in its operating activities and that are either directly attributable to the segments or can be allocated to the segment on a reasonable basis.

Segment liabilities	Segment liabilities are those operating liabilities that are employed by a segment in its operating activities and that are either directly attributable to the segments or can be allocated to the segment on a reasonable basis.

Special items	Special items are those items of financial performance that should be separately disclosed to assist in the understanding of the financial performance achieved by the Group and in making projections of future results, as explained in IAS 1 Presentation of Financial Statements. Special items includes items relating to both continuing and discontinued businesses.

Trading margin	Trading profit, expressed as a percentage of sales.

Trading profit	Operating profit before special items.

Definitions

ICI Annual Report and Accounts 2005 157

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EXCERPTS ON THIS PAGE:

20-F	Mar 31, 2006

6-K	Mar 14, 2006

Imperial Chemical Industries (ICI)

ICI » Topics » Definitions used in computation of Group Financial Targets

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