1 Accounting policies
Basis of Accounting
The Parent Company financial statements have been prepared on the going concern basis, under the historical cost convention except as described in the accounting policy below on financial instruments and in accordance with the Companies Act 2006 and UK Generally Accepted Accounting Practice.
The Company is a public limited company which is listed on the London Stock Exchange and the Johannesburg Stock Exchange and is incorporated and domiciled in the UK.
Cash flow statement
The cash flows of the Company are included in the consolidated cash flow statement of British American Tobacco p.l.c. which is included in this Annual Report. Consequently the Company is
exempt under the terms of FRS 1 (Revised) from publishing a cash flow statement.
Transactions arising in currencies other than sterling are translated at
the rate of exchange ruling on the date of the transaction. Assets and
liabilities expressed in currencies other than sterling are translated at
rates of exchange ruling at the end of the financial year. All exchange
differences are taken to the profit and loss account in the year.
Accounting for income
Income is included in the profit and loss account when all contractual or other applicable conditions for recognition have been met.
Provisions are made for bad and doubtful debts, as appropriate.
Taxation provided is that chargeable on the profits of the year, together with deferred taxation. Deferred taxation is provided in full on timing differences between the recognition of gains and losses in the financial statements and their recognition in tax computations. However, the Company does not discount deferred tax assets and liabilities.
Fixed asset investments
Fixed asset investments are stated at cost, together with subsequent capital contributions, less provisions for any impairment in value.
Final dividend distributions to the Company’s shareholders are recognised as a liability in the financial statements in the period in
which the dividends are approved by the Company’s shareholders while the interim dividend distributions are recognised in the period
in which the dividends are declared and paid.
Repurchase of share capital
When share capital is repurchased, the amount of consideration paid, including directly attributable costs, is recognised as a deduction
from equity. Repurchased shares which are not cancelled, or shares purchased for the employee share ownership trusts, are classified
as treasury shares and presented as a deduction from total equity.
The Company has taken advantage of the exemption under paragraph 3(c) of FRS 8 from disclosing transactions with related
parties that are wholly owned subsidiaries of British American Tobacco p.l.c. Group.
The financial instrument disclosures of the Company are included in the Group financial statements which are included in this Annual Report.
Consequently, the Company is exempt under paragraph 2D (b) of FRS 29 from publishing these financial instruments disclosures.
Financial guarantees are recorded at fair value less accumulated amortisation.