british american tobacco p.l.c. annual report 2008 - Directors' report (1 of 7)

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Introduction

The Directors present their report and the audited financial statements for the Group and the Company for the year ended 31 December 2008. A report from the Directors on corporate governance is set out in the Corporate governance statement and the Remuneration Committee report is in the Remuneration report.

Business review

The Companies Acts 1985 and 2006 require the Company to set out in this report the development and performance of the business of the Group during the financial year ended 31 December 2008, including an analysis of the position of the Group at the end of the financial year, and a description of the principal risks and uncertainties facing the Group.

The table below sets out the information relevant to the Directors’ report (including the information that fulfils the Business review requirements) that may be found in the other sections of the Annual Report. All the information detailed in these sections is incorporated by reference into this Directors’ report and is deemed to form part of this report:

This Directors’ report has been drawn up and is presented in accordance with, and reliance upon, applicable English company law and the liabilities of the Directors in connection with that report shall be subject to the limitations and restrictions provided by such law.

The Annual Report is published on www.bat.com. A printed copy is mailed to shareholders on the UK main register who have elected to receive it. Otherwise, such shareholders are notified that the Annual Report is available on the website and will, at the time of that notification, receive a short Performance Summary (which sets out an overview of the Group’s performance, headline facts and figures and key dates in the Company’s financial calendar) as well as a Notice of Annual General Meeting and Proxy Form. Specific local mailing and/or notification requirements will apply to shareholders on the South African branch register.

Principal activities

British American Tobacco p.l.c. is a holding company which owns, directly or indirectly, investments in the numerous companies constituting the British American Tobacco Group of companies. The principal subsidiaries and associates are listed on the Principal subsidiary undertakings and Principal associate undertakings pages. All subsidiary undertakings are involved in activities directly or indirectly related to the manufacture, distribution or sale of tobacco products.

Group results and dividends

The Group results are addressed fully in the financial statements and in the Business review. The Board recommends to shareholders a final dividend of 61.6p per ordinary share of 25p for the year ended 31 December 2008. If approved by shareholders at the Annual General Meeting to be held on 30 April 2009, the dividend will be payable on 6 May 2009 to shareholders registered on either the UK main register or the new South African branch register on 13 March 2009 (the record date). The ex-dividend trading dates are 9 March 2009 on the JSE Limited (JSE) and 11 March 2009 on the London Stock Exchange (LSE). As the Group reports in sterling, dividends are declared and payable in sterling except for shareholders on the branch register in South Africa whose dividends are payable in rand.

A rate of exchange of £:R = 14.32310 as at 24 February 2009 (the closing rate for that date as quoted on Bloomberg), results in an equivalent final dividend of 882.30296 SA cents per ordinary share. From the close of business on 6 March 2009 until the close of business on 13 March 2009, no transfers between the UK main register and the South African branch register are permitted and no shares may be dematerialised or rematerialised between 9 March 2009 and 13 March 2009, both days inclusive.

Further details of the total amounts of dividends paid in 2008 (with 2007 comparatives) are given in note 8.

Annual General Meeting

The Annual General Meeting will be held at The Mermaid Conference & Events Centre, Puddle Dock, Blackfriars, London EC4V 3DB at 11.30am on 30 April 2009. Details of the business to be proposed at the meeting are contained in the Notice of Annual General Meeting which is sent to all shareholders and is also published on www.bat.com.

Directors

The following persons are the current Directors of the Company:

Chairman
Jan du Plessis

Executive Directors
Paul Adams (Chief Executive)
Ben Stevens (Finance Director)
Nicandro Durante (Chief Operating Officer)

Non-Executive Directors
Sir Nicholas Scheele (Senior Independent Director)
Karen de Segundo
Robert Lerwill
Ana Maria Llopis
Christine Morin-Postel
Anthony Ruys
Thys Visser

Nicandro Durante was appointed to the Board as Chief Operating Officer on 1 January 2008. Paul Rayner ceased to be Finance Director with effect from the conclusion of the Annual General Meeting on 30 April 2008. Ben Stevens was appointed to the Board with effect from 3 March 2008 and succeeded Paul Rayner as Finance Director on 30 April 2008. Kenneth Clarke (Deputy Chairman and Senior Independent Director) also retired as a Director at the conclusion of the Annual General Meeting on 30 April 2008. Sir Nicholas Scheele, a Non-Executive Director, became Senior Independent Director on 1 May 2008.

In accordance with the Articles of Association, the Directors named below retire from the Board at the forthcoming Annual General Meeting and, being eligible, offer themselves for reappointment: Paul Adams; Jan du Plessis; Robert Lerwill; and Sir Nicholas Scheele.

Thys Visser, a Non-Executive Director since 2001, will retire from the Board at the conclusion of the Annual General Meeting on 30 April 2009. The Company is looking to recruit at least 1 further Non-Executive Director to the Board.

Biographical and related information about the Directors is given on the Board of Directors and Management Board pages and will also be given in the Secretary’s letter in the Notice of Annual General Meeting for those Directors who are offering themselves for reappointment.