Annual Review 2006 British American 33 Summary Corporate Governance and Summary Financial Statement

SUMMARY CORPORATE GOVERNANCE

Corporate governance Company’s business objectives rather than to eliminate is committed to maintaining these risks. The internal control system can therefore high standards of corporate governance. Our corporate only provide reasonable, not absolute, assurance against governance framework is directed towards achieving material misstatement or loss. our business objectives in a manner which is responsible

The Audit Committee is chaired by Robert Lerwill. Its GOVERNANCE CORPORATE SUMMARY and in accordance with high standards of honesty, role is to monitor the integrity of the financial statements transparency and accountability. These principles are of the Company, review and, where appropriate, make reflected in our Standards of Business Conduct, which representations to the Board on business risks, internal have been in place for many years and are kept under control and compliance. continual review in order to ensure that they remain at the forefront of best business practice. Every Group The Corporate Social Responsibility Committee is chaired company and every employee worldwide is expected by Kenneth Clarke and its role is to help identify and assess, to live up to them. In addition, the principles set out with management, those significant social, environmental within our Statement of Business Principles are designed and reputational risks that might impair the Company’s to help meet the expectations placed on us by our various strategic objective to be recognised as a responsible stakeholders. Both documents are available from the company in a controversial industry. The Committee Company Secretary and through our bat.com website. also evaluates the adequacy of the Company’s policies in this area and makes recommendations for change. The principal governance rules applying to UK companies listed on the London Stock Exchange are contained in the The Nominations Committee is chaired by . Combined Code on Corporate Governance adopted by the Its role is to make recommendations to the Board on Financial Reporting Council in July 2003 (the Code). The suitable candidates for appointment to the Board and Company has either complied with the Provisions of the Management Board, ensuring that both boards have an Code throughout the year or else a full explanation (in the appropriate balance of expertise and ability. In addition, case of the continuing appointment of Rupert Pennant-Rea) it is responsible for reviewing the succession plans for the has been provided in the Corporate Governance Statement Executive Directors and members of the Management Board. at pages 67 to 72 of the Annual Report and Accounts The Remuneration Committee is chaired by Kenneth where it has not. The Board therefore considers that the Clarke and the summary remuneration report below Company has satisfied its obligations under the Code. sets out its role, responsibilities and policies during 2006.

The Board and its Committees GOVERNANCE CORPORATE SUMMARY The Board is responsible to the Company’s shareholders for the success of the Group and for its overall strategic direction, its values and its governance. Among the key matters on which the Board alone may make decisions are the Group’s business strategy, its annual budget, dividends and major corporate activities. It is also responsible for reviewing the Company’s internal control and governance system and for approving our Standards of Business Conduct. It held seven scheduled meetings in 2006. Responsibility for implementing the Group’s strategy and for creating the conditions for the Group’s successful day-to-day operation is delegated to the Management Board, which met nine times in 2006. The Board is also responsible for the overall system of internal control for the Company and its subsidiaries and for reviewing the effectiveness of the system. It carries out such a review at least annually, covering all material controls including financial, operational and compliance controls and risk management systems, and reports to shareholders that it has done so. The system is designed to manage risk that may impede the achievement of the 34 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

BOARD OF DIRECTORS UMR OPRT GOVERNANCE CORPORATE SUMMARY

Jan du Plessis (British/South African) The Rt. Hon. Kenneth Clarke QC MP Paul Adams (British) Paul Rayner (Australian) Chairman ▲ (British) Chief Executive Finance Director Appointed Chairman in July 2004, Deputy Chairman and Senior Appointed a Director in March 2001 Joined Rothmans Holdings Limited having been a Non-Executive Director Independent Non-Executive Director and Chief Executive in January 2004. in Australia in 1991. He held senior since his appointment to the Board in ▲■● ◆ He joined British American Tobacco executive positions with Rothmans 1999. He was previously Group Finance Appointed a Director in 1998. in July 1991 and held senior before becoming Chief Operating Director of Richemont. He is Chairman He is Chairman of the Remuneration appointments as Regional Director, Officer of British American Tobacco of the Nominations Committee. and Corporate Social Responsibility Asia-Pacific and Regional Director, Australasia Limited in September 1999. He is Chairman of RHM plc and a Committees. He is Non-Executive Europe prior to becoming Deputy He became Finance Director in January Non-Executive Director of Lloyds TSB Director of Foreign & Colonial Managing Director in June 2001 and 2002. He has been a Non-Executive Group plc. (53) Investment Trust PLC and Independent Managing Director in January 2002. (53) Director of Centrica plc since News & Media (UK) Limited. (66) September 2004. (52)

Antonio Monteiro de Castro (Brazilian) Piet Beyers (South African) Robert Lerwill (British) Dr Ana Maria Llopis (Spanish) Chief Operating Officer and Director, Non-Executive Director▲ ◆ Non-Executive Director ▲■● ◆ Non-Executive Director ▲■● ◆ America-Pacific Appointed a Director in June 2004. He Appointed a Director in 2005, he is Appointed a Director in 2003. She Appointed a Director in March is an Executive Director of Richemont Chairman of the Audit Committee. is Executive Deputy Chairman of the 2002 and Chief Operating Officer and a Non-Executive Director of Distell He has been Chief Executive of Aegis J F Llopis Foundation and a member in January 2004. He is President of Group Limited and Remgro Limited Group plc since 2005 and was formerly of the Good Governance Working the administrative council of Souza where he was previously Marketing a Director of Cable & Wireless plc and Group for Spanish listed companies. CruzSAandamemberoftheboard Strategy Director. (57) WPP Group PLC. He is Non-Executive Previously she was Executive Vice-

OR FDIRECTORS OF BOARD of the Getulio Vargas Foundation. Director of Synergy Healthcare plc President at Indra and Chief Executive He has been a Director of Reynolds and a Director of The Anthony Nolan of Openbank, the Santander Group American Inc. since July 2004. (61) Trust. (55) online bank. (56)

Rupert Pennant-Rea (British) Anthony Ruys (Dutch) Sir Nicholas Scheele (British/US) Thys Visser (South African) Non-Executive Director ▲■● ◆ Non-Executive Director ▲■● ◆ Non-Executive Director ▲■● ◆ Non-Executive Director ▲ ◆ Appointed Non-Executive Director of A Director from March 2006. He joined Appointed a Director in 2005. A Director since 2001. He is CEO of B.A.T Industries p.l.c. in 1995, Heineken N.V. in 1993 becoming Formerly President and Chief Operating Remgro Limited, having held senior becoming a Director of British Chairman in 2002. He is a member of Officer of Ford Motor Company. He is management positions with Rembrandt American Tobacco in 1998. He will the Supervisory Boards of ABN AMRO Chancellor of the University of Warwick. Group since 1980. He is Chairman of retire at the conclusion of this year’s Bank and Sara Lee International B.V. He is Chairman of The Cambridge-MIT Rainbow Chicken Ltd and is a Non- Annual General Meeting. Formerly and a director of Lottomatica S.p.A. Institute and Director of Pegasus Executive Director of Medi-Clinic Editor of The Economist and Deputy (Italy). He was appointed an Officer Holdings Group (USA), Grupo Proeza Corporation Limited, Nampak Limited Governor of the Bank of England. He is in the Order of Orange-Nassau in (Mexico) and Caparo plc. (63) and Distell Group Limited. (52) Chairman of Henderson Group plc and 2005. (59) Electra VCT plc. (59) Annual Review 2006 British American Tobacco 35 Summary Corporate Governance and Summary Financial Statement

MANAGEMENT BOARD UMR OPRT GOVERNANCE CORPORATE SUMMARY

Flavio de Andrade (Brazilian) John Daly (Irish) (Italian) Rudi Kindts (Belgian) Director, Latin America and Caribbean Director, Asia-Pacific Director, Africa and Middle East Director, Human Resources Joined the Management Board as Joined the Management Board as Appointed Regional Director for Africa Joined British American Tobacco in Regional Director for Latin America and Regional Director for Asia-Pacific in and Middle East and appointed to the 1988. He has held a number of senior Caribbean in January 2004, following a October 2004. He held a number of Management Board in March 2006. human resources roles across the long career in with senior management roles for Rothmans He previously held senior financial and Group (including Europe, Africa, the SA, assuming a variety of senior International in Europe and the Far East general management roles in Brazil Middle East and Central and South management roles (including President before becoming Area Director for (including President of Souza Cruz) and Asia). He has been Director, Human of Souza Cruz) before being appointed the Middle East and North Africa in also in the UK and Hong Kong. (50) Resources since July 2004. (49) to his current position. (58) 2001. (50)

Michael Prideaux (British) Jimmi Rembiszewski (German) Ben Stevens (British) Peter Taylor (British) Director, Corporate and Director, Marketing Director, Europe Director, Operations and IT Regulatory Affairs Joined the Group as a Marketing Appointed Director, Europe in January Joined British American Tobacco in Appointed Director, Corporate and Director and as a Territorial Director in 2004 having previously joined the 1980 and worked in a variety of Regulatory Affairs in 1998 following the 1991, having had various senior Management Board in 2001 as operational and general management demerger of B.A.T Industries. He had marketing and business appointments Development Director. Since joining roles across the Group. He was previously joined B.A.T Industries in in Procter & Gamble and Jacobs British American Tobacco in 1989, he appointed Global Operations Director 1989 from Charles Barker, a leading Suchard. He has been a member of the has covered a number of senior in 2003. (54)

financial and corporate public relations, Management Board since 1996. (56) marketing, finance and management BOARD MANAGEMENT advertising and design agency, where roles particularly in Europe, South Asia he was Chief Executive. (56) and Russia. (47)

The role of the Management Board The Management Board, chaired by the Chief Executive, comprises the Executive Directors of British American Tobacco p.l.c. together with the executives shown on this page. The Management Board has delegated responsibility for overseeing the implementation by the Group’s operating subsidiaries of the policies and Neil Withington (British) Director, Legal and General Counsel strategy set by the Board of Directors, and for creating Appointed Director, Legal and Security the conditions for their successful day-to-day operation. and General Counsel of British American Tobacco in 2000, having previously been the Group’s Deputy General Counsel. He joined the Group Board Committees in 1993 after a career at the Bar and Committee membership is indicated by the following symbols: in the chemical and pharmaceutical ▲ Nominations Committee industries. He has been a Director ■ Audit Committee of Inc. since July ● Remuneration Committee 2004. (50) ◆ Corporate Social Responsibility Committee 36 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

SUMMARY REMUNERATION REPORT

This report is extracted from the full Remuneration Remuneration – key components Report set out in the Directors’ Report and Accounts Table 1 Executive Directors’ remuneration policy summary 2006 (a copy of which is available on request and can Table 2 Directors’ remuneration be found on our website, bat.com). Table 3 Summary of share interests including long term incentives

UMR OPRT GOVERNANCE CORPORATE SUMMARY The role of the Remuneration Committee and Executive remuneration policy Review of incentive arrangements and proposed The Remuneration Committee determines the new Long Term Incentive Plan framework and policy on the terms of engagement The Company’s current LTIP (the Current LTIP) will (including remuneration) for the Chairman, the Executive expire in April 2008. The Remuneration Committee Directors and the members of the Management Board. undertook a comprehensive review of the current The Remuneration Committee also decides their specific incentive arrangements for the senior executive remuneration, including awards under the share incentive team with a view to advising the Board on possible schemes and pension schemes. replacement incentive arrangements to support the executive remuneration policy and its embedded The overriding objective of the British American Tobacco link with the Group strategy (the Review). remuneration policy is to reward the achievement of corporate and individual goals by linking success in As a result of the Review, shareholder approval is those areas to the Group strategy: a balanced approach being sought for a new Long Term Incentive Plan to achieving growth, improving productivity, managing (the New LTIP). Details of the New LTIP will be set the business in a responsible manner and developing a out in the notice for the 2007 Annual General Meeting winning organisation. The delivery of strategy is measured and its accompanying letter from the Chairman of the by the Key Performance Indicators (KPIs) and Business Remuneration Committee. Measures set out and described on pages 6 to 9 of this The proposed new plan, in which all Executive Directors Annual Review. The continued focus by the Executive and members of the Management Board would Directors of British American Tobacco and the members participate, is, in many respects, very similar to the of its Management Board in driving all four elements of existing arrangements and the key points and differences the strategy will continue to build a sustainable business. (including proposed award levels) are noted in Table 1 on This methodology is supported by a competitively page 38. Awards under the New LTIP would deliver shares positioned and integrated pay and benefits structure subject to stretching performance conditions over three

UMR EUEAINREPORT REMUNERATION SUMMARY which reflects the nature of the Group’s worldwide years. These performance conditions for the awards would operations and the need to attract, motivate and retain continue to be based on Total Shareholder Return (TSR) high-quality executives. and earnings per share (EPS) measures. Participants would In order to strengthen the alignment of executive continue to receive the LTIP Dividend Equivalent. In order remuneration to the generation of shareholder value, to provide flexibility and sufficient capacity for future a balance is maintained between the short and the long awards over the life of the Plan, the individual limit would term elements of the structure. The application of this be increased to 300 per cent of salary. The Remuneration policy will continue during 2007, with performance based Committee does not anticipate that awards will be made variable rewards (cash and share-based performance up to this limit in normal circumstances and there is no related annual bonus plans; and a Long Term Incentive current intention to utilise this limit by making awards Plan – the LTIP) comprising about 56 per cent of total in excess of the proposed levels referred to in Table 1 remuneration with the balance of core fixed elements on page 38. The Remuneration Committee will advise covering base salary, pension and other benefits. shareholders in advance of any change in the current proposed award levels, and any such change will be disclosed in the Remuneration Report. Annual Review 2006 British American Tobacco 37 Summary Corporate Governance and Summary Financial Statement

Long Term Incentive Plan: vesting of 2004 award Historical TSR performance As reported last year, 77.1 per cent of the 2003 LTIP award growth in the value of a hypothetical £100 holding over five years vested on 19 March 2006. The sixth LTIP award was made 350 in 2004, with the performance period being completed 300 British American Tobacco at 31 December 2006. The Remuneration Committee FTSE 100 has assessed the performance of British American Tobacco 250 GOVERNANCE CORPORATE SUMMARY against the two performance conditions outlined in Table 1 200 and has determined that 100 per cent of the award will 150 vest. On the TSR measure, the Company ranked tenth 100 out of the FTSE 100 group of companies, giving a vesting 50 of 25 per cent for performance at the upper quartile. Dec Dec Dec Dec Dec Dec A vesting of 25 per cent was achieved for ranking second 2001 2002 2003 2004 2005 2006 out of the peer group of international FMCG companies, FTSE 100 comparison based on 30 trading day average values. this being upper quartile. Earnings per share growth was Total shareholder return (annual %) 8.98 per cent per annum in excess of inflation, resulting (1 January 2004 – 31 December 2006) FMCG group in a vesting of 50 per cent. Upper Quartile Median – 15.3% BAT – 32.2% 35 Lower Quartile The members of the FMCG group for the 2004 award 30 vesting in March 2007 were: 25 Altadis Imperial Tobacco Group 20 Altria Group InBev 15 Anheuser-Busch Johnson & Johnson 10

Cadbury Schweppes Kellogg 5 Campbell Soup Kimberly-Clark 0 Carlsberg LVMH Moët Hennessy Coca-Cola Nestlé –5 Colgate-Palmolive Pepsico The FMCG comparison is based on three months’ average values. Danone Procter & Gamble Total shareholder return (annual %) Diageo Reckitt Benckiser (1 January 2004 – 31 December 2006) FTSE 100

Gallaher Group SABMiller REPORT REMUNERATION SUMMARY Upper Quartile Median – 19.9% BAT – 32.2% 70 Heineken Sara Lee Lower Quartile HJ Heinz Scottish & Newcastle 60 The Hershey Company Unilever 50 40 Performance graph Schedule 7A to the Companies Act requires that the 30 Company must provide a graph comparing the TSR 20 performance of a hypothetical holding of shares in the 10

Company with a broad equity market index over a five 0 year period – the performance graph. This illustrates the –10 performance of TSR against the FTSE 100 Index over a five year period commencing on 1 January 2002. In the The FTSE 100 comparison is based on three months’ average values. opinion of the Directors, the FTSE 100 Index is the most appropriate index against which TSR should be measured because it is a widely used and understood index of broadly similar-sized UK companies to the Company. In addition to the performance graph, illustrative graphs show the relative position on the TSR measures for the LTIP award vesting in March 2007. 38 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

SUMMARY REMUNERATION REPORT CONTINUED

Table 1. Executive Directors’ remuneration policy summary

Remuneration constituents Rationale Delivery Policy summary

UMR OPRT GOVERNANCE CORPORATE SUMMARY Base salary – competitively reward –cash – annual review with changes effective from April corporate and individual – monthly – benchmarked against a mid-market level of board performance directors from a UK comparator group with a mainly – reflect skills and experience international consumer goods focus chosen from the FTSE 100 Index – additional reference to published salary data with reference to companies in the UK comparator group

Benefits in kind – car or car allowance – UK management level benefit – private medical and personal – Executive Directors receive the benefit of the use of a accident insurance driver

Performance related – incentivise the attainment – International Executive – five common measures: underlying operating profit, bonus of corporate targets on Incentive Scheme (IEIS) market share of key players, Global Drive Brand an annual basis – 50 per cent cash volume, net revenue and cash flow – 50 per cent shares (Deferred – for an ‘on target’ performance, the cash and Share Bonus Scheme - DSBS) shares elements of the IEIS together carry a value – DSBS shares held in trust for of 100 per cent of the base salary with an overall three years and participants maximum of 150 per cent receive cash sum equivalent to the dividend on the after tax position of all unvested shares held in the DSBS at the dividend record date

Long term incentives – alignment of executive – shares – maximum awards under the New LTIP will be increased (Long Term Incentive remuneration with the – discretionary annual award from 175 per cent of salary to 250 per cent for the Chief Plan or LTIP); new Long generation of shareholder – LTIP dividend equivalent as Executive, and from 125 per cent to 200 per cent of salary Term Incentive Plan or value cash at time of vesting for the Finance Director and Chief Operating Officer New LTIP proposed for – incentivise growth in – the proportion of shares – cash LTIP dividend equivalent to the dividends that shareholder approval at earnings per share and Total awarded under an LTIP grant participants would have received as shareholders from

UMR EUEAINREPORT REMUNERATION SUMMARY Annual General Meeting Shareholder Return (TSR) which later lapse upon the the date of the LTIP award to the award’s vesting date on 26 April 2007 over a three year period vesting of an award do not – the value of the LTIP dividend equivalent is taken into attract the LTIP dividend account when considering awards equivalent – three year performance period – TSR performance (50 per cent of the total award) combines both the share price and dividend performance during the three year performance period as against two comparator groups: (1) the constituents of the FTSE 100 Index; and (2) a peer group of FMCG companies (25 per cent for each measure) – earnings per share measure (50 per cent of the total award) relates to earnings per share growth (on an adjusted diluted basis) relative to inflation

Pension – provision of competitive – British American Tobacco UK – pension accrues at 1/40 of annual basic salary post-retirement benefits Pension Fund; defined – UK Pension Fund normal retirement age of 60 benefit plan – maximum pension payable will not exceed 2/3 of – benefit paid as on-going base salary averaged over the preceding 12 months pension – Paul Adams and Paul Rayner are both members of the UK Pension Fund – UK Pension Fund retains a scheme-specific cap following the introduction of the new UK pension regime in April 2006 – excess benefits continue to be accrued within an unfunded unapproved retirement benefits scheme (UURBS) – benefits for Antonio Monteiro de Castro are all accrued in the UURBS, offset by his entitlements under the defined benefit plan of Souza Cruz of Brazil Annual Review 2006 British American Tobacco 39 Summary Corporate Governance and Summary Financial Statement

Executive Directors’ service contracts Non-Executive Directors’ terms of appointment and The Remuneration Committee continues to operate a remuneration policy policy of one year rolling contracts for Executive Directors; The Non-Executive Directors do not have service contracts these contracts incorporate a provision for a termination with the Company but instead have letters of appointment. or compensation payment in lieu of notice. This will The terms of appointment provide that a new Director is comprise: (1) 12 months’ salary at his then current base appointed for a specified term, being an initial period to GOVERNANCE CORPORATE SUMMARY pay; and (2) a cash payment in respect of other benefits the next Annual General Meeting after appointment and, under the contract such as medical insurance, or the subject to reappointment at that meeting, for a further Company may at its option continue those benefits period ending at the Annual General Meeting held three for a 12 month period. In addition, the Committee also years thereafter. Subsequent reappointment is subject to maintains discretion in respect of this policy for those endorsement by the Board and the approval of shareholders. Executive Directors who may be recruited externally Fees for Non-Executive Directors are determined by the or from overseas, when it may be appropriate to offer Board with reference to the time commitment and a contract with an initial period of longer than one year, responsibilities associated with the roles. Under the terms reducing to a one year rolling contract after the expiry of their letters of appointment, on termination (at any time), of the initial period. a Non-Executive Director is entitled to any accrued but unpaid Director’s fees but not to any other compensation.

Table 2. Directors’ remuneration Performance- Performance- related pay: related pay: annual cash deferred share Benefits 2006 2005 Salary/fees bonus2 bonus2, 3 in kind4 Total Total ££££££ J P du Plessis 520,000 – – 68,524 588,524 533,743 K H Clarke 150,000 – – 593 150,593 154,237 PNAdams 984,896 710,000 745,425 132,397 2,572,718 2,118,457 P A Rayner5 608,646 436,650 460,512 232,642 1,738,450 1,443,800 A Monteiro de Castro6 835,956 482,800 504,779 213,176 2,036,711 1,803,123

P E Beyers 60,000 – – 9,735 69,735 60,000 REPORT REMUNERATION SUMMARY R E Lerwill 75,000 – – 403 75,403 79,664 A M Llopis 60,000 – – – 60,000 60,000 R L Pennant-Rea 60,000 – – – 60,000 68,750 A Ruys1 50,000 – – 831 50,831 – Sir Nicholas Scheele 60,000 – – 8,739 68,739 50,860 M H Visser 60,000 – – 6,584 66,584 82,588 Former Director K S Wong (deceased)1 –––––10,000 Total remuneration 3,524,498 1,629,450 1,710,716 673,624 7,538,288 6,465,222 Notes: 1 K S Wong died on 16 February 2005; Anthony Ruys was appointed a Director on 1 March 2006. 2 The Remuneration Committee, following its usual procedures, agreed that the performance targets for the year ended 31 December 2006 have been met (subject to confirmation of a figure yet to be published). The Committee agreed that the performance-related bonus payments shown above could, as a consequence, increase or decrease by approximately 1.5 per cent following the publication of the outstanding information which would enable the relevant calculations to be finalised after 1 March 2007. Such changes, if any, will be reported in the Remuneration Report for the year ending 31 December 2007. 3 The deferred share bonus payments include cash sums equivalent to the dividend on the after tax position on all unvested ordinary shares comprised in theawardsheldby participants (including Executive Directors) in the Deferred Share Bonus Scheme at each dividend record date. For the year ended 31 December 2006, these payments for Executive Directors were as follows: Paul Adams £35,425 (2005: £29,374); Paul Rayner £23,862 (2005: £19,750); and Antonio Monteiro de Castro £21,979 (2005: £18,376). 4 Benefits in kind include: (a) a car or a car allowance; (b) use of a driver; (c) spouse travel and associated expenses for business-related purposes. For Non-Executive Directors these benefits relate to spouse travel only. 5 Paul Rayner’s benefits in kind included payments in respect of family education (£56,344) which followed his relocation to the UK from Australia. 6 Antonio Monteiro de Castro’s benefits in kind included tax advice of £65,424 in respect of his former contractual arrangements up to 1 January 2004 prior to which date he derived his emoluments in both the UK and Brazil. 7 The Directors’ remuneration shown above does not include the illustrative value (as at 23 February 2007) of the Executive Directors’ Long Term Incentive Plan awards made in March 2004 which will vest on 17 March 2007. Reference should be made to Table 3 on page 40 note 5. 40 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

SUMMARY REMUNERATION REPORT CONTINUED

Chairman’s terms of appointment and remuneration relevant notice period as the Board does not require the Jan du Plessis’s terms of appointment provide that he will Chairman to perform his duties. The Chairman is subject hold the office of Chairman with effect from 1 July 2004 to the reappointment of Directors’ provisions contained in for a period of three years unless terminated earlier by: the Company’s articles of association; he will therefore not (1) the Company giving three months’ notice or a ordinarily serve as a Director for more than two years UMR OPRT GOVERNANCE CORPORATE SUMMARY discretionary compensation payment in lieu of notice; before seeking reappointment. In common with the or (2) by the Chairman giving one month’s written Non-Executive Directors, he does not participate in the notice with the Company having discretion to make a Company’s share schemes, bonus schemes or incentive compensation payment in lieu of such notice. This is plans and is not a member of any Group pension plan. limited to any fees which are payable for such part of the

Table 3. Summary of share interests including long term incentives

Ordinary shares Options and Options and Share options at 1 Jan 2006 Ordinary shares Ordinary shares awards over awards over exercisable from/to or date of Ordinary shares (Deferred Scheme) (Deferred Scheme) ordinary shares ordinary shares LTIP awards initial appointment at 31 Dec 2006 at 1 Jan 2006 at 31 Dec 2006 at 1 Jan 2006 at 31 Dec 2006 vesting date P N Adams 143,051 143,394 125,517 118,611 – – – Sharesave Scheme – – – – 2,492 2,492 Jan 10-Jun 10 LTIP – – – – 341,383 362,067 Mar 07-Mar 09 P A Rayner 83,228 83,558 83,155 82,821 – – – Share Option and Sharesave Schemes – – – – 6,777 6,266 Sep 02-Jun 12 LTIP – – – – 200,511 177,490 Mar 07-Mar 09 A Monteiro de Castro 179,564 179,844 76,784 75,889 – – – Sharesave Scheme – – – – 957 957 Jan 09-Jun 09 LTIP – – – – 229,480 266,273 Mar 06-Mar 09 J P du Plessis 50,000 50,000 – – – – – KHClarke 4,459 4,611 – – – – – UMR EUEAINREPORT REMUNERATION SUMMARY P E Beyers –– – ––– – R E Lerwill 3,000 3,000 – – – – – A M Llopis 2,200 2,200 – – – – – R L Pennant-Rea 3,295 3,407 – – – – – A Ruys1 – 3,000 – – – – – Sir Nicholas Scheele –– – ––– – MHVisser –– – ––– – Notes: 1 Anthony Ruys was appointed a Director on 1 March 2006. 2 No Director had a non-beneficial interest in the shares of the Company at the dates stated above. 3 Share options granted under the Share Option Scheme are not normally granted in any year to Executive Directors who receive an award under the LTIP; no options were granted in the year ended 31 December 2006. The aggregate gains on share options exercised by Executive Directors during the year ended 31 December 2006 were £17,562 (2005: £423,516). Options granted under the Share Option Scheme are exercisable subject to a performance condition based on earnings per share growth; the Company’s published adjusted earnings per share growth has to exceed inflation by an average of 3 per cent per annum over any consecutive three year period during the 10 year life of the options. 4 The value of LTIP awards which vested to Executive Directors during the year ended 31 December 2006 was £2,783,533 (2005: £1,300,628). 5 The March 2004 LTIP award will vest on 17 March 2007 at 100 per cent in the manner described on page 37. For illustrative purposes only, the aggregate value of the vesting awards for the Executive Directors was £3,820,370 based on a share price on 23 February 2007 (being the latest practicable date prior to publication) of 1,584p per ordinary share. Annual Review 2006 British American Tobacco 41 Summary Corporate Governance and Summary Financial Statement

INDEPENDENT AUDITORS’ STATEMENT TO THE MEMBERS OF BRITISH AMERICAN TOBACCO P.L.C.

We have examined the Summary Financial Statement on pages 42 to 47, including the Summary Remuneration Report (pages 36 to 40) of British American Tobacco p.l.c. for the year ended 31 December 2006. Respective responsibilities of Directors and auditors

The Directors are responsible for preparing the Summary STATEMENT FINANCIAL SUMMARY Corporate Governance and Summary Financial Statement in accordance with United Kingdom law. Our responsibility is to report to you our opinion on the consistency of the Summary Financial Statement (including the Summary Remuneration Report) within the Summary Corporate Governance and Summary Financial Statement with the full annual financial statements, the Directors’ Report and the Remuneration Report and its compliance with the relevant requirements of Section 251 of the Companies Act 1985 and the regulations made thereunder. We also read the other information contained in the Annual Review and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Summary Financial Statement. This statement, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 251 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this statement is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Basis of opinion STATEMENT AUDITORS’ INDEPENDENT We conducted our work in accordance with Bulletin 1999/6, ‘The Auditors’ Statement on The Summary Financial Statement’ issued by the Auditing Practices Board. Our reports on the Company’s full annual financial statements describe the basis for our audit opinions on those financial statements and the Directors’ Report and the Remuneration Report. Opinion In our opinion the Summary Financial Statement is consistent with the full annual financial statements, the Directors’ Report and the Remuneration Report of British American Tobacco p.l.c. for the year ended 31 December 2006 and complies with the applicable requirements of Section 251 of the Companies Act 1985, and the regulations made thereunder. PricewaterhouseCoopers LLP Chartered Accountants and Registered Auditors 1 Embankment Place, London 1 March 2007 42 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

GROUP INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER

2006 2005 Restated £m £m Gross turnover (including duty, excise and other taxes of £15,427m (2005: £14,659m)) 25,189 23,984

Revenue 9,762 9,325 Raw materials and consumables used (2,861) (2,760) UMR IACA STATEMENT FINANCIAL SUMMARY Changes in inventories of finished goods and work in progress (11) (2) Employee benefit costs (1,554) (1,557) Depreciation and amortisation costs (401) (383) Other operating income 181 179 Other operating expenses (2,494) (2,382) Profit from operations 2,622 2,420 after (charging)/crediting – restructuring costs (216) (271) – (losses)/gains on disposal of a business, brands and joint venture 41 72 Finance income 110 118 Finance costs (399) (346) Net finance costs (289) (228) Share of post-tax results of associates and joint ventures 431 392 after (charging)/crediting – restructuring costs (13) – US Federal tobacco buy-out (12) – brand impairments (13) (29) – exceptional tax credits and other impairments 17 57 Profit before taxation 2,764 2,584 Taxation on ordinary activities (716) (690)

RU NOESTATEMENT INCOME GROUP Profit for the year 2,048 1,894

Attributable to: Shareholders’ equity 1,896 1,767

Minority interests 152 127

Earnings per share Basic 92.08p 84.34p

Diluted 91.33p 83.66p Annual Review 2006 British American Tobacco 43 Summary Corporate Governance and Summary Financial Statement

GROUP BALANCE SHEET AT 31 DECEMBER

2006 2005 Restated £m £m Assets Non-current assets Intangible assets 7,476 7,987

Property, plant and equipment 2,207 2,331 STATEMENT FINANCIAL SUMMARY Investments in associates and joint ventures 2,108 2,193 Retirement benefit assets 29 35 Deferred tax assets 273 290 Trade and other receivables 192 197 Available-for-sale investments 24 27 Derivative financial instruments 76 87 Total non-current assets 12,385 13,147 Current assets Inventories 2,056 2,274 Income tax receivable 59 81 Trade and other receivables 1,568 1,577 Available-for-sale investments 128 96 Derivative financial instruments 124 86 Cash and cash equivalents 1,456 1,790 Total current assets 5,391 5,904 Total assets 17,776 19,051

Equity Total equity 6,688 6,877 Liabilities Non-current liabilities

Borrowings 5,568 5,058 SHEET BALANCE GROUP Retirement benefit liabilities 435 543 Deferred tax liabilities 296 277 Other provisions for liabilities and charges 161 261 Trade and other payables 146 180 Derivative financial instruments 29 19 Total non-current liabilities 6,635 6,338 Current liabilities Borrowings 1,058 2,202 Income tax payable 292 374 Other provisions for liabilities and charges 253 234 Trade and other payables 2,766 2,883 Derivative financial instruments 84 143 Total current liabilities 4,453 5,836 Total equity and liabilities 17,776 19,051

This Summary Financial Statement was approved by the Board of Directors on 1 March 2007 and signed on its behalf by Jan du Plessis, Chairman. 44 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

GROUP STATEMENT OF CHANGES IN TOTAL EQUITY FOR THE YEAR ENDED 31 DECEMBER

2006 2005 Restated £m £m Differences on exchange (685) 425 Cash flow hedges (2) 58 Available-for-sale investments (2) Net investment hedges 117 (52) UMR IACA STATEMENT FINANCIAL SUMMARY Tax on items recognised directly in equity (12) (41) Net (losses)/gains recognised directly in equity (584) 390 Profit for the year page 42 2,048 1,894 Total recognised income for the year 1,464 2,284 – shareholders’ equity 1,334 2,128 – minority interests 130 156 Employee share options 69 72 Dividends and other appropriations – to British American Tobacco shareholders (1,008) (910) – to minority interests (137) (112) Purchase of own shares – held in Employee Share Ownership Trusts (77) (48) – share buy-back programme (500) (501) Other movements 17 (189) 802 Balance 1 January page 43 6,877 6,117 Change in accounting policy page 29 (42) Balance 31 December 6,688 6,877

Total equity comprised £6,461 million of shareholders’ funds (2005: £6,630 million), after deducting cost of own shares held in Employee Share Ownership Trusts of £197 million (2005: £182 million), and minority interests of £227 million

RU TTMN FCAGSI OA EQUITY TOTAL IN CHANGES OF STATEMENT GROUP (2005: £247 million). Annual Review 2006 British American Tobacco 45 Summary Corporate Governance and Summary Financial Statement

SUMMARY FINANCIAL STATEMENT AND NOTES

The Summary Financial Statement on pages 42 to 47 However, as a result of the technical infringement of the is a summary of information in the Annual Report and Companies Act 1985, the repurchase and cancellation Accounts and should be read with the reviews on pages of these shares was invalid and accordingly, their nominal 1 to 32. Reference should also be made to the Summary value is included within the Company's share capital as at Remuneration Report on pages 36 to 40. 31 December 2006. These shares will be repurchased on The Annual Review and Summary Financial Statement 1 March 2007 from their present holders, the Company's UMR IACA STATEMENT FINANCIAL SUMMARY does not contain sufficient information to allow for as brokers, at the same prices agreed between 22 September full an understanding of the results of the Group and 2006 and 4 December 2006. the state of affairs of the Company, or of the Group, and Contingent liabilities their policies and arrangements concerning Directors’ There are contingent liabilities in respect of litigation, remuneration, as would be provided by the full Annual overseas taxes and guarantees in various countries. Report and Accounts. Shareholders requiring more detailed information have the right to obtain, of Product liability litigation charge, a copy of the full Annual Report and Accounts for Group companies, notably Brown & Williamson Holdings, 2006, or for future years, by contacting British American Inc. (B&W), as well as other leading cigarette manufacturers, Tobacco Publications as set out on the inside back cover. are defendants, principally in the US, in a number of product liability cases. In a number of these cases, the amounts of Report of the auditors compensatory and punitive damages sought are significant. The auditors’ report on the full annual accounts of the Group for the year ended 31 December 2006 is unqualified and Indemnity does not contain any statement concerning accounting records On 30 July 2004, B&W completed transactions combining or failure to obtain necessary information and explanations. its US tobacco business assets, liabilities and operations with R.J. Reynolds Tobacco Company. A new company Going concern called R.J. Reynolds Tobacco Company (RJRT) was created After reviewing the Group’s annual budget and plans, the as a result of the combination transactions. As a result of Directors consider that the Group has adequate resources these transactions: (a) B&W discontinued the active conduct to continue in operational existence for the foreseeable of any tobacco business in the US; (b) B&W contributed future and that it is therefore appropriate to continue to to RJRT all of its assets other than the capital stock of adopt the going concern basis in preparing the accounts. certain subsidiaries engaged in non-US businesses and Accounting policies other limited categories of assets; (c) RJRT assumed all From 1 January 2005, the Group has prepared its annual liabilities of B&W (except liabilities to the extent relating NOTES AND STATEMENT FINANCIAL SUMMARY consolidated financial statements in accordance with to businesses and assets not contributed by B&W to RJRT International Financial Reporting Standards (IFRS) as adopted and other limited categories of liabilities) and contributed by the European Union and implemented in the UK. subsidiaries or otherwise to the extent related to B&W’s tobacco business as conducted in the US on or prior to Changes in accounting policies are as described on page 29. 30 July 2004; and, (d) RJRT agreed to indemnify B&W and Dividends and share buy-back each of its affiliates (other than Reynolds American Inc. The dividends are as described on pages 27 and 28. and its subsidiaries) against, among other matters, all losses, liabilities, damages, expenses, judgments, attorneys’ For the first time the Company needed to file interim fees, etc, to the extent relating to or arising from such accounts which were prepared to recognise additional assumed liabilities or the assets contributed by B&W to dividend income during 2006. As a result of the Company RJRT (the RJRT Indemnification). The scope of the RJRT not doing so, the interim dividend of £323 million paid Indemnification includes all expenses and contingent on 13 September 2006 did not comply with the technical liabilities in connection with litigation to the extent relating requirements of the Companies Act 1985. It is proposed to or arising from B&W’s US tobacco business as conducted that the appropriation of distributable profits to the payment on or prior to 30 July 2004, including smoking and health of the interim dividend will be ratified by shareholders by tobacco litigation, whether the litigation is commenced way of a special resolution at the Annual General Meeting. before or after 30 July 2004 (the tobacco litigation). Accordingly, the payment has been presented as a dividend payment on page 44. Pursuant to the terms of the RJRT Indemnification, RJRT is liable for any possible judgments, the posting of appeal Between 22 September 2006 and 4 December 2006, bonds or security, and all other expenses of and responsibility the Company sought to repurchase 6,927,790 shares for managing the defence of the tobacco litigation. RJRT for an aggregate consideration of £100 million, which has assumed control of the defence of the tobacco litigation are included in the purchase of own shares on page 44. involving B&W. Affiliates of B&W have retained control of 46 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

SUMMARY FINANCIAL STATEMENT AND NOTES CONTINUED

the defence in certain tobacco litigation cases with respect as B.A.T Industries p.l.c. was previously a defendant to which such affiliates are entitled to indemnification. in around 1,000 consolidated individual cases in West Virginia. British American Tobacco (Investments) Limited US litigation has been dismissed from those West Virginia consolidated 1. Medical reimbursement cases smoking and health cases in which it was a defendant. These civil actions seek to recover amounts spent by government entities and other third party providers 5. Conduct-based claims UMR IACA STATEMENT FINANCIAL SUMMARY on healthcare and welfare costs claimed to result from In 1999, the US Department of Justice brought an action illnesses associated with smoking. As at 31 December against various industry members, including RJRT and 2006, a reimbursement suit brought by an Indian tribe B&W. British American Tobacco (Investments) Limited and two non-governmental reimbursement suits were is a co-defendant in the action. The trial of this claim pending against B&W. The vast majority of other such was completed in June 2005. In August 2006, the District claims have been dismissed on legal grounds. Court issued its final judgment, finding in favour of the Government, and against certain defendants, including As at 31 December 2006, B&W was named as defendant B&W and British American Tobacco (Investments) Limited. in two US cases brought by foreign government entities The court also ordered a wide array of injunctive relief, (São Paulo and Panama) seeking reimbursement of medical including a ban on the use of ‘lights’ and other similar costs. In July 2006, the Delaware Superior Court granted descriptors. Defendants filed a motion to stay enforcement defendants’ motion to dismiss these cases. Plaintiffs of the judgment shortly after the judgment was issued. appealed to the Supreme Court of Delaware, which heard The court denied the stay motion, but defendants filed oral argument in December 2006 and reserved decision. a notice of appeal and an emergency motion to stay the 2. Class actions judgment before the Washington DC Circuit Court of As at 31 December 2006, B&W was named as a defendant Appeals in September 2006. In October 2006, the Court in some 15 separate actions attempting to assert claims on of Appeals granted defendants’ motion to stay enforcement behalf of classes of persons allegedly injured by smoking. of the judgment pending the outcome of the appeal. In the Engle case (Florida), one jury awarded compensatory 6. Settlement of State Health Care Reimbursement Cases damages totalling US$12.7 million and assessed After an Independent Auditor found that the terms of the US$17.6 billion in punitive damages against B&W. The Master Settlement Agreement (MSA) were a ‘significant intermediate appellate court reversed the trial court’s factor’ in market share losses experienced by signatories judgment. In July 2006, the Florida Supreme Court upheld to the MSA in 2003, several US tobacco companies

UMR IACA TTMN N NOTES AND STATEMENT FINANCIAL SUMMARY the intermediate appellate court’s decision to decertify asserted their rights under the MSA to recover a payment the class, and vacated the jury’s punitive damages award. credit or offset for MSA payments made in April 2004. In Scott, the jury returned a verdict of US$591 million The amount at stake exceeds US$1 billion. The settling on the class’s claim for a smoking cessation programme. states have filed motions seeking enforcement of certain Defendants’ appeal to the Louisiana Fourth Circuit Court MSA provisions and defendants have opposed these of Appeal resulted in the reduction of the award by motions, arguing instead for arbitration. US$312 million. In the Schwab class action complaint, the court granted plaintiffs’ motion for class certification. 7. Other claims By order in November 2006, the Second Circuit Court of The Flintkote Company (Flintkote), a US asbestos production Appeals granted defendants’ motion to stay proceedings and sales company, was included in the acquisition of in this case, and further granted defendants’ petition for Genstar Corporation by Imasco Limited (now Imperial leave to appeal the class certification order. Tobacco Canada Limited (Imperial)) in 1986 and became a Group subsidiary following the restructuring of Imasco 3. Individual cases in 2000. In 2003, Imperial divested Flintkote and then, Approximately 3,471 cases were pending against B&W in 2004, Flintkote filed for bankruptcy in the US. In 2006, at 31 December 2006, filed by or on behalf of individuals Flintkote, certain representatives of both the present and in which it is contended that diseases or deaths have been future asbestos claimants as well as certain individual caused by cigarette smoking or by exposure to environmental asbestos claimants were permitted by the bankruptcy court tobacco smoke (ETS). to file a complaint against Imperial and other defendants 4. Consolidated claims for the recovery of dividends paid and other compensation In the West Virginia consolidated smoking and health cases, under various legal theories. The parties are presently the court so-ordered the parties' stipulation dismissing engaged in case management discussions to establish the B.A.T Industries p.l.c. from the action, with prejudice, scope and manner of discovery in this case. This litigation on 12 December 2006. This is a significant decision is expected to take several years to proceed to trial. Annual Review 2006 British American Tobacco 47 Summary Corporate Governance and Summary Financial Statement

In Wisconsin, the Authorities have identified potentially the certification of the class but limited any liability, if responsible parties to fund the clean up of the Fox River proved, to the period from 1997. In Quebec, in February after pollution from paper mills operating nearby, a task 2005, two smoking and health class actions were certified. currently estimated to cost in the order of US$600m. There is no right of appeal against class certification. Among the potentially liable parties are NCR Corporation Imperial is currently being investigated by the Royal Canadian and Appleton Papers Inc. B.A.T Industries p.l.c. purchased Mounted Police relating to its business records and sales of what was then NCR’s Appleton Papers Division from NCR STATEMENT FINANCIAL SUMMARY products exported from Canada between 1989 and 1994. Corporation, and B.A.T Industries p.l.c. spun off the No action has been commenced against Imperial. Imperial Appleton Paper business in 1990 having obtained full believes that it has conducted itself appropriately at all times, indemnities from Appleton Papers Inc. for past and future but cannot predict the outcome of any such investigation, environmental claims. Disputes have arisen between NCR or whether additional investigations will occur. Corporation and B.A.T Industries p.l.c. as to the indemnities given and received under the purchase agreement in Two actions have been started in Russia by a minority 1978 which disputes have been the subject of arbitration shareholder in OJSC Company British American Tobacco- in 1998 and 2006. Under the terms of the arbitration Yava (BAT-Yava), a Russian incorporated subsidiary of awards B.A.T Industries p.l.c. has an obligation to share British American Tobacco Holdings (Russia) B.V. The the costs of environmental claims with NCR Corporation, minority shareholder, Branston Holdings, issued a claim although it has never been required to do this because in Moscow seeking to have a contract between BAT-Yava Appleton Papers Inc. has paid any sums demanded. and its sister company invalidated, and issued another It is our belief that all future environmental liabilities claim in the Stavropol region alleging that certain of will continue to be met directly by Appleton Papers Inc. the directors of BAT-Yava, and other parties, took various by self funding or insurance cover and no demand will unlawful steps. The Moscow Court has dismissed the claim be made upon B.A.T Industries p.l.c. by NCR Corporation. and the Stavropol Court has ordered the transfer of the case filed there to Moscow. An appeal of the dismissed Other foreign litigation Moscow case has been sent to the Moscow Appellate At 31 December 2006, active claims against Group Court. Branston has also threatened actions in the companies existed in 18 countries outside the United States Netherlands and England but has not yet commenced but the only countries with more than five active claims were these. The Company considers these actions to be Argentina, Brazil, Canada, Chile, Italy and the Republic of without merit and will defend the claims strenuously. Ireland. As at 31 December 2006, there were some 1,142

pending individual cases in Italy. 1,113 cases are pending Conclusion NOTES AND STATEMENT FINANCIAL SUMMARY before the Justice of the Peace Courts, the majority of While it is impossible to be certain of the outcome of any which relate to claims of alleged fraud in connection with particular case or of the amount of any possible adverse ‘light’ . Because of the type of court involved, verdict, the Company believes that the defences of the the most an individual plaintiff can recover is €1,033. Group companies to all these various claims are meritorious There are around 27 smoking and health cases filed by both on the law and the facts, and a vigorous defence is or on behalf of individuals. There are also two labour being made everywhere. If an adverse judgment were cases for alleged occupational exposure pending in Italy. entered against any of the Group companies in any case, an appeal will be made. Such appeals could require the The Supreme Court of Canada has upheld the constitutionality appellants to post appeal bonds or substitute security of the British Columbian Tobacco Damages and Health Care in amounts which could in some cases equal or exceed Costs Recovery Act. Non-Canadian defendants challenged the amount of the judgment. In any event, with regard the personal jurisdiction of the British Columbia Court but to US litigation, the Group has the benefit of the RJRT these motions were dismissed. The Court found a ‘real and Indemnification. At least in the aggregate and despite substantial connection’ between British Columbia and the the quality of defences available to the Group, it is not foreign defendants. Defendants’ appeal to this decision impossible that the results of operations or cash flows of was dismissed in September 2006. Defendants then filed the Group in particular quarterly or annual periods could leave to appeal to the Supreme Court in November 2006. be materially affected by this and by the final outcome of In addition, there are five class actions and four individual any particular litigation. cases in Canada. In the Knight class action, the Supreme Having regard to these matters, the Directors (i) do not Court of British Columbia certified a class of all consumers consider it appropriate to make any provision in respect of Imperial manufactured cigarettes in British Columbia, not of any pending litigation and (ii) do not believe that the just British Columbia residents. Defendant’s appeal was ultimate outcome of all this litigation will significantly heard in February 2006, and the Appeal Court confirmed impair the financial condition of the Group. 48 British American Tobacco Annual Review 2006 Summary Corporate Governance and Summary Financial Statement

SHAREHOLDER INFORMATION

Registrar Church Street Station, New York, NY 10286-1258, USA, Enquiries concerning your shareholding, mandating your tel: +1 888 BNY ADRS (toll-free) or +1 212 815 3700, dividends (including consolidated dividend tax vouchers) e-mail: [email protected] and notifying changes in your personal details should be website: www.adrbny.com directed to Computershare Investor Services PLC, PO Box 82, Individual Savings Accounts (ISAs) The Pavilions, Bridgwater Road, Bristol BS99 7NH, A British American Tobacco sponsored ISA; contact The tel: 0800 408 0094 (UK); +44 870 889 3159 Share Centre, PO Box 2000, Aylesbury, Bucks, HP21 8ZB, Online tel: 0800 800 008 (UK); +44 (0)1296 414 141, DIINLINFORMATION ADDITIONAL www.bat.com e-mail: [email protected]; website: www.share.co.uk Access comprehensive information about British American Capital gains tax Tobacco and download shareholder publications at the Fact sheet for British American Tobacco historical corporate website; visit the Investor Centre for valuation capital gains tax information; contact the British and charting tools and dividend and share price data; and American Tobacco Company Secretarial Department, subscribe to the e-mail and SMS alert services for key financial tel: +44 (0)20 7845 1000 or access the Investor Centre events in the British American Tobacco financial calendar at www.bat.com/investorcentre/cgt www.computershare.com/uk/investor/bri Final dividend 2006 Access the web-based enquiry service for shareholders Ex-dividend date – 7 March 2007 operated by Computershare Investor Services; view details Record date – 9 March 2007 of your British American Tobacco shareholding and recent Payment date – 3 May 2007 dividend payments and register for shareholder electronic communications to receive notification of British American Annual General Meeting Tobacco shareholder mailings by e-mail Thursday, 26 April 2007 at 11.30am, The Mermaid Conference & Events Centre, Puddle Dock, Blackfriars, www.computershare.com/dealing/UK London EC4V 3DB Go online or telephone 0870 703 0084 (UK) to buy or sell British American Tobacco shares Financial results 2007 First quarter – 3 May [email protected] Interim – 26 July Contact Computershare Investor Services by e-mail Third quarter – 1 November HRHLE INFORMATION SHAREHOLDER Publications Analyses of shareholders Copies of current and past Annual Report and Accounts At 31 December 2006, there were 2,068,803,944 and Annual Reviews are available on request. Copies ordinary shares in issue held by 60,226 shareholders. of the Group corporate descriptive booklet About Us These shareholdings are analysed as follows by category and past Quarterly Reports are also available. Highlights of shareholder and size of shareholding: from these publications can be produced in alternative Percentage formats such as Braille, audio tape and large print. Percentage of issued Contact British American Tobacco Publications, Unit 80, Category of Number of of total Number of ordinary shareholder holders holders ordinary shares share capital London Industrial Park, Roding Road, London E6 6LS Individuals 53,283 88.47 77,196,613 3.74 tel: +44 (0)20 7511 7797, facsimile: +44 (0)20 7540 4326, Financial institutions/ e-mail: [email protected] pension funds 273 0.46 5,913,028 0.29 Nominee companies 6,162 10.23 1,356,353,424 65.56 Dividend Reinvestment Plan Other corporate holders 507 0.84 25,004,252 1.21 A straightforward and economic way of utilising your R&R Holdings S.A. 1 – 604,336,627 29.20 dividends to build up your shareholding in British 60,226 100.00 2,068,803,944 100.00 American Tobacco; contact Computershare Investor Services for details Percentage of issued Size of shareholding Number of holders ordinary share capital American Depositary Receipts 1 – 1,999 48,232 1.26 British American Tobacco sponsors an American 2,000 – 9,999 9,852 1.79 Depositary Receipt (ADR) programme in the United 10,000 – 199,999 1,609 3.24 200,000 – 499,999 215 3.33 States. Enquiries regarding ADR holder accounts and 500,000 and over 318 90.38 payment of dividends should be directed to Shareholder 60,226 100.00 Relations, The Bank of New York, PO Box 11258,