118 Dialog Semiconductor Plc | Annual report and accounts 2012 |  Section 3 | Management and governance Section 6 | Additional information Glossary continued Financial glossary CAGR  Compound Annual Growth Rate, a method of assessing the  average growth of a value over time. Cash flow  The primary purpose of a statement of cash flow is to provide  relevant information about the cash receipts and cash payments of an  enterprise during a period. It helps to assess the enterprise’s ability to  generate positive future net cash flows. A statement of cash flows shall  explain the change in cash and cash equivalents during the period by  classifying cash receipts and payments according to whether they stem  from operating, investing or financing activities. Cash flow from operating activities includes all transactions and other  events that are not defined as investing or financing activities in  paragraphs. Operating activities generally involve producing and delivering  goods and providing services. Cash flows from operating activities are  generally the cash effects of transactions and other events that enter into  the determination of net income. Comprehensive income  The purpose of reporting comprehensive income  is to report a measure of all changes in equity of an enterprise that results  from recognised transactions and other economic events of the period  other than transactions with owners such as capital increases or dividends.  An example of items affecting comprehensive income is foreign currency  translation adjustments resulting from the process of translating an entity’s  financial statements in a foreign currency into the reporting currency. Corporate Governance  The system by which business corporations are  directed and controlled. The Corporate Governance structure specifies the  distribution of rights and responsibilities among different participants in  the corporation, such as the Board, managers, Shareholders and other  stakeholders, and spells out the rules and procedures for making decisions  on corporate affairs. By doing this, it also provides the structure through  which the Company’s objectives are set, and the means of attaining those  objectives and monitoring performance. Deferred taxes  Deferred tax assets or liabilities are temporary differences  between the tax basis of an asset or liability and its reported amount in  the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is  recovered or settled, respectively. Derivative financial instruments  A financial instrument that derives  its value from the price or expected price of an underlying asset (e.g. a security, currency or bond). Dividends  Payments made by a company to its shareholders. When the  company earns a profit, that money can be put to two uses: it can either  be reinvested in the business (called retained earnings) or it can be paid  to the shareholders of the company as a dividend. DTR  The UK Disclosure and Transparency Rules implementing the  provisions of the Transparency Directive.  EURIBOR  The Euro Interbank Offered Rate is the rate at which euro  interbank term deposits within the euro zone are offered by one prime  bank to another prime bank.  Free-float  The proportion of an issuer’s share capital that is available for purchase in the public equity markets by investors. Working capital  The excess of current assets over current liabilities and identifies the relatively liquid portion of total enterprise capital that constitutes a margin or buffer for meeting obligations within the  ordinary operating cycle of the business. Total assets  All current and non-current assets. Total assets equal total  liabilities and Shareholders’ equity. Stock option plans  This refers to all agreements by an entity to issue  shares of stock or other equity instruments to employees. Stock option  plans provide employees the opportunity to receive stock resulting in  an additional compensation based on future share price performance.  The purpose of stock option plans is to motivate employees to increase  Shareholder value on a long-term basis. Shareholders’ equity  This reflects the investment of Shareholders in  a Company. Shareholders’ equity comprises ordinary shares, additional  paid-in capital, retained earnings and accumulated other  comprehensive income. Securities  Debt securities are instruments representing a creditor  relationship with an enterprise and includes government securities,  corporate bonds, commercial paper and all securitised debt instruments.  Available-for-sale securities are debt securities not classified as held to  maturity or trading securities. Restructuring charges  Costs associated with an exit or disposal activity, e.g. termination benefits provided to employees that are  involuntarily terminated. Prime Standard  The new segmentation of the equity market of the  German Stock Exchange comprises a Prime Standard segment in addition  to the General Standard segment that applies the statutory minimum  requirements. The Prime Standard segment addresses companies that wish  to target international investors. These companies are required to meet  high international transparency criteria, over and above those set out by  the General Standard. IFRS  (International Financial Reporting Standards) Accounting standards  generally to be used for financial years commencing on or after 1 January  2005 by all publicly listed European Union companies in compliance with  the European Parliament and Council Regulation adopted in July 2002. Impairment  The condition that exists when the carrying amount of a long-lived asset exceeds its fair value (the sum of the undiscounted cash flows expected to result from the use and eventual disposition of  the asset). Gross margin  This is difference between revenues and cost of sales as presented in the statement of operations. AGM  Annual General Meeting.