1 Accounting policies
Basis of Accounting
The Financial Statements have been prepared on the going concern basis under the historical cost convention and in accordance with the Companies Act 1985 and UK Generally Accepted Accounting Principles.
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 Directors’ Report and Accounts. Consequently the Company is exempt under the terms of FRS1 (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, including where delays are anticipated in the receipt of monies from overseas.
Taxation provided is that chargeable on the profits of the period, 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 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(b) FRS8 from disclosing transactions with related parties that are part of the British American Tobacco p.l.c. Group.
The financial instrument disclosures of the Company are included in the Consolidated Group Accounts which are included in this Directors’ Report and Accounts. Consequently, the Company is exempt under paragraph 3C (b) of FRS25 from publishing these financial instrument disclosures.
Financial guarantees are recorded at fair value less accumulated amortisation.
2 Investments in Group companies
The Company’s directly owned subsidiaries are British American Tobacco (1998) Limited, B.A.T. International Finance p.l.c., B.A.T Capital Corporation, BATMark Limited, British American Ventures Limited and British American Tobacco QUEST Limited.
The Directors are of the opinion that the individual investments in the subsidiary undertakings have a value not less than the amount at which they are shown in the Balance Sheet.
| ||2007 |
| ||4,047 ||4,047 |
| ||2007 |
|Amounts due from Group undertakings||4,110 ||2,246 |