SUMMARY CORPORATE GOVERNANCE

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

Corporate governanceBritish American Tobacco is committed to maintaininghigh standards of corporate governance. Our corporategovernance framework is directed towards achievingour business objectives in a manner which is responsibleand in accordance with high standards of honesty,transparency and accountability. These principles arereflected in our Standards of Business Conduct, whichhave been in place for many years and are kept undercontinual review in order to ensure that they remainat the forefront of best business practice. Every Groupcompany and every employee worldwide is expectedto live up to them. In addition, the principles set outwithin our Statement of Business Principles are designedto help meet the expectations placed on us by our variousstakeholders. Both documents are available from theCompany Secretary and through our bat.com website.

The principal governance rules applying to UK companieslisted on the London Stock Exchange are contained in theCombined Code on Corporate Governance adopted by theFinancial Reporting Council in July 2003 (the Code). TheCompany has either complied with the Provisions of theCode throughout the year or else a full explanation (in thecase of the continuing appointment of Rupert Pennant-Rea)has been provided in the Corporate Governance Statementat pages 67 to 72 of the Annual Report and Accountswhere it has not. The Board therefore considers that theCompany has satisfied its obligations under the Code.

The Board and its CommitteesThe Board is responsible to the Company’s shareholdersfor the success of the Group and for its overall strategicdirection, its values and its governance. Among thekey matters on which the Board alone may makedecisions are the Group’s business strategy, its annualbudget, dividends and major corporate activities. It isalso responsible for reviewing the Company’s internalcontrol and governance system and for approving ourStandards of Business Conduct. It held seven scheduledmeetings in 2006. Responsibility for implementing theGroup’s strategy and for creating the conditions for theGroup’s successful day-to-day operation is delegated tothe Management Board, which met nine times in 2006.

The Board is also responsible for the overall systemof internal control for the Company and its subsidiariesand for reviewing the effectiveness of the system. It carriesout such a review at least annually, covering all materialcontrols including financial, operational and compliancecontrols and risk management systems, and reports toshareholders that it has done so. The system is designedto manage risk that may impede the achievement of the

Company’s business objectives rather than to eliminatethese risks. The internal control system can thereforeonly provide reasonable, not absolute, assurance againstmaterial misstatement or loss.

The Audit Committee is chaired by Robert Lerwill. Itsrole is to monitor the integrity of the financial statementsof the Company, review and, where appropriate, makerepresentations to the Board on business risks, internalcontrol and compliance.

The Corporate Social Responsibility Committee is chairedby Kenneth Clarke and its role is to help identify and assess,with management, those significant social, environmentaland reputational risks that might impair the Company’sstrategic objective to be recognised as a responsiblecompany in a controversial industry. The Committeealso evaluates the adequacy of the Company’s policiesin this area and makes recommendations for change.

The Nominations Committee is chaired by Jan du Plessis.Its role is to make recommendations to the Board onsuitable candidates for appointment to the Board andManagement Board, ensuring that both boards have anappropriate balance of expertise and ability. In addition,it is responsible for reviewing the succession plans for theExecutive Directors and members of the Management Board.

The Remuneration Committee is chaired by KennethClarke and the summary remuneration report belowsets out its role, responsibilities and policies during 2006.

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34 British American Tobacco Annual Review 2006Summary Corporate Governance and Summary Financial Statement

Jan du Plessis (British/South African)Chairman ▲

Appointed Chairman in July 2004,having been a Non-Executive Directorsince his appointment to the Board in1999. He was previously Group FinanceDirector of Richemont. He is Chairmanof the Nominations Committee.He is Chairman of RHM plc and aNon-Executive Director of Lloyds TSBGroup plc. (53)

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Paul Adams (British)Chief ExecutiveAppointed a Director in March 2001and Chief Executive in January 2004.He joined British American Tobaccoin July 1991 and held seniorappointments as Regional Director,Asia-Pacific and Regional Director,Europe prior to becoming DeputyManaging Director in June 2001 andManaging Director in January 2002. (53)

Paul Rayner (Australian)Finance DirectorJoined Rothmans Holdings Limitedin Australia in 1991. He held seniorexecutive positions with Rothmansbefore becoming Chief OperatingOfficer of British American TobaccoAustralasia Limited in September 1999.He became Finance Director in January2002. He has been a Non-ExecutiveDirector of Centrica plc sinceSeptember 2004. (52)

Antonio Monteiro de Castro (Brazilian)Chief Operating Officer and Director,America-PacificAppointed a Director in March2002 and Chief Operating Officerin January 2004. He is President ofthe administrative council of SouzaCruz SA and a member of the boardof the Getulio Vargas Foundation.He has been a Director of ReynoldsAmerican Inc. since July 2004. (61)

Piet Beyers (South African)Non-Executive Director▲ ◆Appointed a Director in June 2004. Heis an Executive Director of Richemontand a Non-Executive Director of DistellGroup Limited and Remgro Limitedwhere he was previously MarketingStrategy Director. (57)

Robert Lerwill (British)Non-Executive Director ▲ ■ ● ◆Appointed a Director in 2005, he isChairman of the Audit Committee.He has been Chief Executive of AegisGroup plc since 2005 and was formerlya Director of Cable & Wireless plc andWPP Group PLC. He is Non-ExecutiveDirector of Synergy Healthcare plcand a Director of The Anthony NolanTrust. (55)

Dr Ana Maria Llopis (Spanish)Non-Executive Director ▲ ■ ● ◆Appointed a Director in 2003. Sheis Executive Deputy Chairman of theJ F Llopis Foundation and a memberof the Good Governance WorkingGroup for Spanish listed companies.Previously she was Executive Vice-President at Indra and Chief Executiveof Openbank, the Santander Grouponline bank. (56)

Rupert Pennant-Rea (British)Non-Executive Director ▲ ■ ● ◆Appointed Non-Executive Director ofB.A.T Industries p.l.c. in 1995,becoming a Director of BritishAmerican Tobacco in 1998. He willretire at the conclusion of this year’sAnnual General Meeting. FormerlyEditor of The Economist and DeputyGovernor of the Bank of England. He isChairman of Henderson Group plc andElectra Kingsway VCT plc. (59)

Anthony Ruys (Dutch)Non-Executive Director ▲ ■ ● ◆A Director from March 2006. He joinedHeineken N.V. in 1993 becomingChairman in 2002. He is a member ofthe Supervisory Boards of ABN AMROBank and Sara Lee International B.V.and a director of Lottomatica S.p.A.(Italy). He was appointed an Officerin the Order of Orange-Nassau in2005. (59)

Sir Nicholas Scheele (British/US)Non-Executive Director ▲ ■ ● ◆Appointed a Director in 2005.Formerly President and Chief OperatingOfficer of Ford Motor Company. He isChancellor of the University of Warwick.He is Chairman of The Cambridge-MITInstitute and Director of PegasusHoldings Group (USA), Grupo Proeza(Mexico) and Caparo plc. (63)

Thys Visser (South African)Non-Executive Director ▲ ◆A Director since 2001. He is CEO ofRemgro Limited, having held seniormanagement positions with RembrandtGroup since 1980. He is Chairman ofRainbow Chicken Ltd and is a Non-Executive Director of Medi-ClinicCorporation Limited, Nampak Limitedand Distell Group Limited. (52)

The Rt. Hon. Kenneth Clarke QC MP

(British)Deputy Chairman and SeniorIndependent Non-Executive Director▲ ■ ● ◆Appointed a Director in 1998.He is Chairman of the Remunerationand Corporate Social ResponsibilityCommittees. He is Non-ExecutiveDirector of Foreign & ColonialInvestment Trust PLC and IndependentNews & Media (UK) Limited. (66)


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Flavio de Andrade (Brazilian)Director, Latin America and CaribbeanJoined the Management Board asRegional Director for Latin America andCaribbean in January 2004, following along career in Brazil with Souza CruzSA, assuming a variety of seniormanagement roles (including Presidentof Souza Cruz) before being appointedto his current position. (58)

John Daly (Irish)Director, Asia-PacificJoined the Management Board asRegional Director for Asia-Pacific inOctober 2004. He held a number ofsenior management roles for RothmansInternational in Europe and the Far Eastbefore becoming Area Director forthe Middle East and North Africa in2001. (50)

Nicandro Durante (Italian)Director, Africa and Middle EastAppointed Regional Director for Africaand Middle East and appointed to theManagement Board in March 2006.He previously held senior financial andgeneral management roles in Brazil(including President of Souza Cruz) andalso in the UK and Hong Kong. (50)

Rudi Kindts (Belgian)Director, Human ResourcesJoined British American Tobacco in1988. He has held a number of seniorhuman resources roles across theGroup (including Europe, Africa, theMiddle East and Central and SouthAsia). He has been Director, HumanResources since July 2004. (49)

Michael Prideaux (British)Director, Corporate andRegulatory AffairsAppointed Director, Corporate andRegulatory Affairs in 1998 following thedemerger of B.A.T Industries. He hadpreviously joined B.A.T Industries in1989 from Charles Barker, a leadingfinancial and corporate public relations,advertising and design agency, wherehe was Chief Executive. (56)

Jimmi Rembiszewski (German)Director, MarketingJoined the Group as a MarketingDirector and as a Territorial Director in1991, having had various seniormarketing and business appointmentsin Procter & Gamble and JacobsSuchard. He has been a member of theManagement Board since 1996. (56)

Ben Stevens (British)Director, EuropeAppointed Director, Europe in January2004 having previously joined theManagement Board in 2001 asDevelopment Director. Since joiningBritish American Tobacco in 1989, hehas covered a number of seniormarketing, finance and managementroles particularly in Europe, South Asiaand Russia. (47)

Peter Taylor (British)Director, Operations and ITJoined British American Tobacco in1980 and worked in a variety ofoperational and general managementroles across the Group. He wasappointed Global Operations Directorin 2003. (54)

Neil Withington (British)Director, Legal and General CounselAppointed Director, Legal and Securityand General Counsel of BritishAmerican Tobacco in 2000, havingpreviously been the Group’s DeputyGeneral Counsel. He joined the Groupin 1993 after a career at the Bar andin the chemical and pharmaceuticalindustries. He has been a Directorof Reynolds American Inc. since July2004. (50)

The role of the Management BoardThe Management Board, chaired by the Chief Executive,comprises the Executive Directors of British AmericanTobacco p.l.c. together with the executives shownon this page. The Management Board has delegatedresponsibility for overseeing the implementation bythe Group’s operating subsidiaries of the policies andstrategy set by the Board of Directors, and for creatingthe conditions for their successful day-to-day operation.

Board CommitteesCommittee membership is indicated by the following symbols:▲ Nominations Committee■ Audit Committee● Remuneration Committee◆ Corporate Social Responsibility Committee


This report is extracted from the full RemunerationReport set out in the Directors’ Report and Accounts2006 (a copy of which is available on request and canbe found on our website, bat.com).

The role of the Remuneration Committee andExecutive remuneration policyThe Remuneration Committee determines theframework and policy on the terms of engagement(including remuneration) for the Chairman, the ExecutiveDirectors and the members of the Management Board.The Remuneration Committee also decides their specificremuneration, including awards under the share incentiveschemes and pension schemes.

The overriding objective of the British American Tobaccoremuneration policy is to reward the achievement ofcorporate and individual goals by linking success inthose areas to the Group strategy: a balanced approachto achieving growth, improving productivity, managingthe business in a responsible manner and developing awinning organisation. The delivery of strategy is measuredby the Key Performance Indicators (KPIs) and BusinessMeasures set out and described on pages 6 to 9 of thisAnnual Review. The continued focus by the ExecutiveDirectors of British American Tobacco and the membersof its Management Board in driving all four elements ofthe strategy will continue to build a sustainable business.This methodology is supported by a competitivelypositioned and integrated pay and benefits structurewhich reflects the nature of the Group’s worldwideoperations and the need to attract, motivate and retainhigh-quality executives.

In order to strengthen the alignment of executiveremuneration to the generation of shareholder value,a balance is maintained between the short and the longterm elements of the structure. The application of thispolicy will continue during 2007, with performance basedvariable rewards (cash and share-based performancerelated annual bonus plans; and a Long Term IncentivePlan – the LTIP) comprising about 56 per cent of totalremuneration with the balance of core fixed elementscovering base salary, pension and other benefits.

Remuneration – key componentsTable 1 Executive Directors’ remuneration policy summaryTable 2 Directors’ remunerationTable 3 Summary of share interests including long termincentives

Review of incentive arrangements and proposednew Long Term Incentive PlanThe Company’s current LTIP (the Current LTIP) willexpire in April 2008. The Remuneration Committeeundertook a comprehensive review of the currentincentive arrangements for the senior executiveteam with a view to advising the Board on possiblereplacement incentive arrangements to support theexecutive remuneration policy and its embeddedlink with the Group strategy (the Review).

As a result of the Review, shareholder approval isbeing sought for a new Long Term Incentive Plan(the New LTIP). Details of the New LTIP will be setout in the notice for the 2007 Annual General Meetingand its accompanying letter from the Chairman of theRemuneration Committee.

The proposed new plan, in which all Executive Directorsand members of the Management Board wouldparticipate, is, in many respects, very similar to theexisting arrangements and the key points and differences(including proposed award levels) are noted in Table 1 onpage 38. Awards under the New LTIP would deliver sharessubject to stretching performance conditions over threeyears. These performance conditions for the awards wouldcontinue to be based on Total Shareholder Return (TSR)and earnings per share (EPS) measures. Participants wouldcontinue to receive the LTIP Dividend Equivalent. In orderto provide flexibility and sufficient capacity for futureawards over the life of the Plan, the individual limit wouldbe increased to 300 per cent of salary. The RemunerationCommittee does not anticipate that awards will be madeup to this limit in normal circumstances and there is nocurrent intention to utilise this limit by making awardsin excess of the proposed levels referred to in Table 1on page 38. The Remuneration Committee will adviseshareholders in advance of any change in the currentproposed award levels, and any such change will bedisclosed in the Remuneration Report.

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Long Term Incentive Plan: vesting of 2004 awardAs reported last year, 77.1 per cent of the 2003 LTIP awardvested on 19 March 2006. The sixth LTIP award was madein 2004, with the performance period being completedat 31 December 2006. The Remuneration Committeehas assessed the performance of British American Tobaccoagainst the two performance conditions outlined in Table 1and has determined that 100 per cent of the award willvest. On the TSR measure, the Company ranked tenthout of the FTSE 100 group of companies, giving a vestingof 25 per cent for performance at the upper quartile.A vesting of 25 per cent was achieved for ranking secondout of the peer group of international FMCG companies,this being upper quartile. Earnings per share growth was8.98 per cent per annum in excess of inflation, resultingin a vesting of 50 per cent.

The members of the FMCG group for the 2004 awardvesting in March 2007 were:

Altadis Imperial Tobacco GroupAltria Group InBevAnheuser-Busch Johnson & JohnsonCadbury Schweppes KelloggCampbell Soup Kimberly-ClarkCarlsberg LVMH Moët HennessyCoca-Cola NestléColgate-Palmolive PepsicoDanone Procter & GambleDiageo Reckitt BenckiserGallaher Group SABMillerHeineken Sara LeeHJ Heinz Scottish & NewcastleThe Hershey Company Unilever

Performance graphSchedule 7A to the Companies Act requires that theCompany must provide a graph comparing the TSRperformance of a hypothetical holding of shares in theCompany with a broad equity market index over a fiveyear period – the performance graph. This illustrates theperformance of TSR against the FTSE 100 Index over afive year period commencing on 1 January 2002. In theopinion of the Directors, the FTSE 100 Index is the mostappropriate index against which TSR should be measuredbecause it is a widely used and understood index ofbroadly similar-sized UK companies to the Company.In addition to the performance graph, illustrative graphsshow the relative position on the TSR measures for theLTIP award vesting in March 2007.

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Historical TSR performancegrowth in the value of a hypothetical £100 holding over five years

FTSE 100 comparison based on 30 trading day average values.

Total shareholder return (annual %)(1 January 2004 – 31 December 2006) FMCG group

The FMCG comparison is based on three months’ average values.

Total shareholder return (annual %)(1 January 2004 – 31 December 2006) FTSE 100

The FTSE 100 comparison is based on three months’ average values.

350

300

250

200

150

100

50Dec2001

Dec2002

Dec2003

Dec2004

Dec2005

Dec2006

Upper QuartileLower Quartile

Median – 15.3% BAT – 32.2% 35

30

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Upper QuartileLower Quartile

Median – 19.9% BAT – 32.2% 70

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–10

British American TobaccoFTSE 100


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Table 1. Executive Directors’ remuneration policy summary

Remunerationconstituents

Base salary

Benefits in kind

Performance relatedbonus

Long term incentives(Long Term IncentivePlan or LTIP); new LongTerm Incentive Plan orNew LTIP proposed forshareholder approval atAnnual General Meetingon 26 April 2007

Pension

Rationale

– competitively rewardcorporate and individualperformance

– reflect skills and experience

– incentivise the attainmentof corporate targets onan annual basis

– alignment of executiveremuneration with thegeneration of shareholdervalue

– incentivise growth inearnings per share and TotalShareholder Return (TSR)over a three year period

– provision of competitivepost-retirement benefits

Delivery

– cash– monthly

– car or car allowance– private medical and personalaccident insurance

– International ExecutiveIncentive Scheme (IEIS)

– 50 per cent cash– 50 per cent shares (DeferredShare Bonus Scheme - DSBS)

– DSBS shares held in trust forthree years and participantsreceive cash sum equivalentto the dividend on the aftertax position of all unvestedshares held in the DSBS atthe dividend record date

– shares– discretionary annual award– LTIP dividend equivalent ascash at time of vesting

– the proportion of sharesawarded under an LTIP grantwhich later lapse upon thevesting of an award do notattract the LTIP dividendequivalent

– British American Tobacco UKPension Fund; definedbenefit plan

– benefit paid as on-goingpension

Policy summary

– annual review with changes effective from April– benchmarked against a mid-market level of main boarddirectors from a UK comparator group with a mainlyinternational consumer goods focus chosen from theFTSE 100 Index

– additional reference to published salary data withreference to companies in the UK comparator group

– UK management level benefit– Executive Directors receive the benefit of the use of adriver

– five common measures: underlying operating profit,market share of key players, Global Drive Brandvolume, net revenue and cash flow

– for an ‘on target’ performance, the cash andshares elements of the IEIS together carry a valueof 100 per cent of the base salary with an overallmaximum of 150 per cent

– maximum awards under the New LTIP will be increasedfrom 175 per cent of salary to 250 per cent for the ChiefExecutive, and from 125 per cent to 200 per cent of salaryfor the Finance Director and Chief Operating Officer

– cash LTIP dividend equivalent to the dividends thatparticipants would have received as shareholders fromthe date of the LTIP award to the award’s vesting date

– the value of the LTIP dividend equivalent is taken intoaccount when considering awards

– three year performance period– TSR performance (50 per cent of the total award)combines both the share price and dividendperformance during the three year performance periodas against two comparator groups: (1) the constituentsof the FTSE 100 Index; and (2) a peer group of FMCGcompanies (25 per cent for each measure)

– earnings per share measure (50 per cent of the totalaward) relates to earnings per share growth (on anadjusted diluted basis) relative to inflation

– pension accrues at 1/40 of annual basic salary– UK Pension Fund normal retirement age of 60– maximum pension payable will not exceed 2/3 ofbase salary averaged over the preceding 12 months

– Paul Adams and Paul Rayner are both members of theUK Pension Fund

– UK Pension Fund retains a scheme-specific cap followingthe introduction of the new UK pension regime inApril 2006

– excess benefits continue to be accrued within an unfundedunapproved retirement benefits scheme (UURBS)

– benefits for Antonio Monteiro de Castro are all accruedin the UURBS, offset by his entitlements under thedefined benefit plan of Souza Cruz of Brazil


Executive Directors’ service contractsThe Remuneration Committee continues to operate apolicy of one year rolling contracts for Executive Directors;these contracts incorporate a provision for a terminationor compensation payment in lieu of notice. This willcomprise: (1) 12 months’ salary at his then current basepay; and (2) a cash payment in respect of other benefitsunder the contract such as medical insurance, or theCompany may at its option continue those benefitsfor a 12 month period. In addition, the Committee alsomaintains discretion in respect of this policy for thoseExecutive Directors who may be recruited externallyor from overseas, when it may be appropriate to offera contract with an initial period of longer than one year,reducing to a one year rolling contract after the expiryof the initial period.

Non-Executive Directors’ terms of appointment andremuneration policyThe Non-Executive Directors do not have service contractswith the Company but instead have letters of appointment.The terms of appointment provide that a new Director isappointed for a specified term, being an initial period tothe next Annual General Meeting after appointment and,subject to reappointment at that meeting, for a furtherperiod ending at the Annual General Meeting held threeyears thereafter. Subsequent reappointment is subject toendorsement by the Board and the approval of shareholders.Fees for Non-Executive Directors are determined by theBoard with reference to the time commitment andresponsibilities associated with the roles. Under the termsof their letters of appointment, on termination (at any time),a Non-Executive Director is entitled to any accrued butunpaid Director’s fees but not to any other compensation.

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Table 2. Directors’ remunerationPerformance- 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 – – 68,524 588,524 533,743K H Clarke 150,000 – – 593 150,593 154,237P N Adams 984,896 710,000 745,425 132,397 2,572,718 2,118,457P A Rayner5 608,646 436,650 460,512 232,642 1,738,450 1,443,800A Monteiro de Castro6 835,956 482,800 504,779 213,176 2,036,711 1,803,123P E Beyers 60,000 – – 9,735 69,735 60,000R E Lerwill 75,000 – – 403 75,403 79,664A M Llopis 60,000 – – – 60,000 60,000R L Pennant-Rea 60,000 – – – 60,000 68,750A Ruys1 50,000 – – 831 50,831 –Sir Nicholas Scheele 60,000 – – 8,739 68,739 50,860M H Visser 60,000 – – 6,584 66,584 82,588Former DirectorK S Wong (deceased)1 – – – – – 10,000

Total remuneration 3,524,498 1,629,450 1,710,716 673,624 7,538,288 6,465,222Notes: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 ofa figure yet to be published). The Committee agreed that the performance-related bonus payments shown above could, as a consequence, increase or decrease by approximately1.5 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, willbe 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 the awards held byparticipants (including Executive Directors) in the Deferred Share Bonus Scheme at each dividend record date. For the year ended 31 December 2006, these payments forExecutive 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 Directorsthese 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 hederived 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 madein March 2004 which will vest on 17 March 2007. Reference should be made to Table 3 on page 40 note 5.


Chairman’s terms of appointment and remunerationJan du Plessis’s terms of appointment provide that he willhold the office of Chairman with effect from 1 July 2004for a period of three years unless terminated earlier by:(1) the Company giving three months’ notice or adiscretionary compensation payment in lieu of notice;or (2) by the Chairman giving one month’s writtennotice with the Company having discretion to make acompensation payment in lieu of such notice. This islimited to any fees which are payable for such part of the

relevant notice period as the Board does not require theChairman to perform his duties. The Chairman is subjectto the reappointment of Directors’ provisions contained inthe Company’s articles of association; he will therefore notordinarily serve as a Director for more than two yearsbefore seeking reappointment. In common with theNon-Executive Directors, he does not participate in theCompany’s share schemes, bonus schemes or incentiveplans and is not a member of any Group pension plan.

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Table 3. Summary of share interests including long term incentivesOrdinary shares Options and Options and Share optionsat 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 initialappointment 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 10LTIP – – – – 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 12LTIP – – – – 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 09LTIP – – – – 229,480 266,273 Mar 06-Mar 09

J P du Plessis 50,000 50,000 – – – – –K H Clarke 4,459 4,611 – – – – –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 – – – – – – –M H Visser – – – – – – –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 weregranted 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’spublished 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 lifeof 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 vestingawards 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.


We have examined the Summary Financial Statement onpages 42 to 47, including the Summary RemunerationReport (pages 36 to 40) of British American Tobacco p.l.c.for the year ended 31 December 2006.

Respective responsibilities of Directors and auditorsThe Directors are responsible for preparing the SummaryCorporate Governance and Summary Financial Statementin accordance with United Kingdom law. Our responsibilityis to report to you our opinion on the consistency of theSummary Financial Statement (including the SummaryRemuneration Report) within the Summary CorporateGovernance and Summary Financial Statement with thefull annual financial statements, the Directors’ Reportand the Remuneration Report and its compliance with therelevant requirements of Section 251 of the CompaniesAct 1985 and the regulations made thereunder. Wealso read the other information contained in the AnnualReview and consider the implications for our report if webecome aware of any apparent misstatements or materialinconsistencies with the Summary Financial Statement.

This statement, including the opinion, has been preparedfor and only for the Company’s members as a body inaccordance with Section 251 of the Companies Act 1985and for no other purpose. We do not, in giving this opinion,accept or assume responsibility for any other purposeor to any other person to whom this statement is shownor into whose hands it may come save where expresslyagreed by our prior consent in writing.

Basis of opinionWe conducted our work in accordance with Bulletin1999/6, ‘The Auditors’ Statement on The SummaryFinancial Statement’ issued by the Auditing PracticesBoard. Our reports on the Company’s full annual financialstatements describe the basis for our audit opinions onthose financial statements and the Directors’ Report andthe Remuneration Report.

OpinionIn our opinion the Summary Financial Statement isconsistent with the full annual financial statements, theDirectors’ Report and the Remuneration Report of BritishAmerican Tobacco p.l.c. for the year ended 31 December2006 and complies with the applicable requirementsof Section 251 of the Companies Act 1985, and theregulations made thereunder.

PricewaterhouseCoopers LLPChartered Accountants and Registered Auditors1 Embankment Place, London

1 March 2007

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2006 2005Restated

£m £m

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

Revenue 9,762 9,325Raw materials and consumables used (2,861) (2,760)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 179Other 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 118Finance 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 2,584Taxation on ordinary activities (716) (690)

Profit for the year 2,048 1,894

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

Minority interests 152 127

Earnings per shareBasic 92.08p 84.34p

Diluted 91.33p 83.66pSU

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2006 2005Restated

£m £m

AssetsNon-current assetsIntangible assets 7,476 7,987Property, plant and equipment 2,207 2,331Investments in associates and joint ventures 2,108 2,193Retirement benefit assets 29 35Deferred tax assets 273 290Trade and other receivables 192 197Available-for-sale investments 24 27Derivative financial instruments 76 87

Total non-current assets 12,385 13,147

Current assetsInventories 2,056 2,274Income tax receivable 59 81Trade and other receivables 1,568 1,577Available-for-sale investments 128 96Derivative financial instruments 124 86Cash and cash equivalents 1,456 1,790

Total current assets 5,391 5,904

Total assets 17,776 19,051

EquityTotal equity 6,688 6,877

LiabilitiesNon-current liabilitiesBorrowings 5,568 5,058Retirement benefit liabilities 435 543Deferred tax liabilities 296 277Other provisions for liabilities and charges 161 261Trade and other payables 146 180Derivative financial instruments 29 19

Total non-current liabilities 6,635 6,338

Current liabilitiesBorrowings 1,058 2,202Income tax payable 292 374Other provisions for liabilities and charges 253 234Trade and other payables 2,766 2,883Derivative 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 byJan du Plessis, Chairman.

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2006 2005Restated

£m £m

Differences on exchange (685) 425Cash flow hedges (2) 58Available-for-sale investments (2)Net investment hedges 117 (52)Tax on items recognised directly in equity (12) (41)

Net (losses)/gains recognised directly in equity (584) 390Profit 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 72Dividends 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) 802Balance 1 January page 43 6,877 6,117Change 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 sharesheld in Employee Share Ownership Trusts of £197 million (2005: £182 million), and minority interests of £227 million(2005: £247 million).

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The Summary Financial Statement on pages 42 to 47is a summary of information in the Annual Report andAccounts and should be read with the reviews on pages1 to 32. Reference should also be made to the SummaryRemuneration Report on pages 36 to 40.

The Annual Review and Summary Financial Statementdoes not contain sufficient information to allow for asfull an understanding of the results of the Group andthe state of affairs of the Company, or of the Group, andtheir policies and arrangements concerning Directors’remuneration, as would be provided by the full AnnualReport and Accounts. Shareholders requiring moredetailed information have the right to obtain, free ofcharge, a copy of the full Annual Report and Accounts for2006, or for future years, by contacting British AmericanTobacco Publications as set out on the inside back cover.

Report of the auditorsThe auditors’ report on the full annual accounts of the Groupfor the year ended 31 December 2006 is unqualified anddoes not contain any statement concerning accounting recordsor failure to obtain necessary information and explanations.

Going concernAfter reviewing the Group’s annual budget and plans, theDirectors consider that the Group has adequate resourcesto continue in operational existence for the foreseeablefuture and that it is therefore appropriate to continue toadopt the going concern basis in preparing the accounts.

Accounting policiesFrom 1 January 2005, the Group has prepared its annualconsolidated financial statements in accordance withInternational Financial Reporting Standards (IFRS) as adoptedby the European Union and implemented in the UK.

Changes in accounting policies are as described on page 29.

Dividends and share buy-backThe dividends are as described on pages 27 and 28.

For the first time the Company needed to file interimaccounts which were prepared to recognise additionaldividend income during 2006. As a result of the Companynot doing so, the interim dividend of £323 million paidon 13 September 2006 did not comply with the technicalrequirements of the Companies Act 1985. It is proposedthat the appropriation of distributable profits to the paymentof the interim dividend will be ratified by shareholders byway of a special resolution at the Annual General Meeting.Accordingly, the payment has been presented as a dividendpayment on page 44.

Between 22 September 2006 and 4 December 2006,the Company sought to repurchase 6,927,790 sharesfor an aggregate consideration of £100 million, whichare included in the purchase of own shares on page 44.

However, as a result of the technical infringement of theCompanies Act 1985, the repurchase and cancellationof these shares was invalid and accordingly, their nominalvalue is included within the Company's share capital as at31 December 2006. These shares will be repurchased on1 March 2007 from their present holders, the Company'sbrokers, at the same prices agreed between 22 September2006 and 4 December 2006.

Contingent liabilitiesThere are contingent liabilities in respect of litigation,overseas taxes and guarantees in various countries.

Product liability litigationGroup companies, notably Brown & Williamson Holdings,Inc. (B&W), as well as other leading cigarette manufacturers,are defendants, principally in the US, in a number of productliability cases. In a number of these cases, the amounts ofcompensatory and punitive damages sought are significant.

IndemnityOn 30 July 2004, B&W completed transactions combiningits US tobacco business assets, liabilities and operationswith R.J. Reynolds Tobacco Company. A new companycalled R.J. Reynolds Tobacco Company (RJRT) was createdas a result of the combination transactions. As a result ofthese transactions: (a) B&W discontinued the active conductof any tobacco business in the US; (b) B&W contributedto RJRT all of its assets other than the capital stock ofcertain subsidiaries engaged in non-US businesses andother limited categories of assets; (c) RJRT assumed allliabilities of B&W (except liabilities to the extent relatingto businesses and assets not contributed by B&W to RJRTand other limited categories of liabilities) and contributedsubsidiaries or otherwise to the extent related to B&W’stobacco business as conducted in the US on or prior to30 July 2004; and, (d) RJRT agreed to indemnify B&W andeach of its affiliates (other than Reynolds American Inc.and its subsidiaries) against, among other matters, alllosses, liabilities, damages, expenses, judgments, attorneys’fees, etc, to the extent relating to or arising from suchassumed liabilities or the assets contributed by B&W toRJRT (the RJRT Indemnification). The scope of the RJRTIndemnification includes all expenses and contingentliabilities in connection with litigation to the extent relatingto or arising from B&W’s US tobacco business as conductedon or prior to 30 July 2004, including smoking and healthtobacco litigation, whether the litigation is commencedbefore or after 30 July 2004 (the tobacco litigation).

Pursuant to the terms of the RJRT Indemnification, RJRTis liable for any possible judgments, the posting of appealbonds or security, and all other expenses of and responsibilityfor managing the defence of the tobacco litigation. RJRThas assumed control of the defence of the tobacco litigationinvolving B&W. Affiliates of B&W have retained control of

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the defence in certain tobacco litigation cases with respectto which such affiliates are entitled to indemnification.

US litigation1. Medical reimbursement casesThese civil actions seek to recover amounts spent bygovernment entities and other third party providerson healthcare and welfare costs claimed to result fromillnesses associated with smoking. As at 31 December2006, a reimbursement suit brought by an Indian tribeand two non-governmental reimbursement suits werepending against B&W. The vast majority of other suchclaims have been dismissed on legal grounds.

As at 31 December 2006, B&W was named as defendantin two US cases brought by foreign government entities(São Paulo and Panama) seeking reimbursement of medicalcosts. In July 2006, the Delaware Superior Court granteddefendants’ motion to dismiss these cases. Plaintiffsappealed to the Supreme Court of Delaware, which heardoral argument in December 2006 and reserved decision.

2. Class actionsAs at 31 December 2006, B&W was named as a defendantin some 15 separate actions attempting to assert claims onbehalf of classes of persons allegedly injured by smoking.In the Engle case (Florida), one jury awarded compensatorydamages totalling US$12.7 million and assessedUS$17.6 billion in punitive damages against B&W. Theintermediate appellate court reversed the trial court’sjudgment. In July 2006, the Florida Supreme Court upheldthe intermediate appellate court’s decision to decertifythe class, and vacated the jury’s punitive damages award.In Scott, the jury returned a verdict of US$591 millionon the class’s claim for a smoking cessation programme.Defendants’ appeal to the Louisiana Fourth Circuit Courtof Appeal resulted in the reduction of the award byUS$312 million. In the Schwab class action complaint,the court granted plaintiffs’ motion for class certification.By order in November 2006, the Second Circuit Court ofAppeals granted defendants’ motion to stay proceedingsin this case, and further granted defendants’ petition forleave to appeal the class certification order.

3. Individual casesApproximately 3,471 cases were pending against B&Wat 31 December 2006, filed by or on behalf of individualsin which it is contended that diseases or deaths have beencaused by cigarette smoking or by exposure to environmentaltobacco smoke (ETS).

4. Consolidated claimsIn the West Virginia consolidated smoking and health cases,the court so-ordered the parties' stipulation dismissingB.A.T Industries p.l.c. from the action, with prejudice,on 12 December 2006. This is a significant decision

as B.A.T Industries p.l.c. was previously a defendantin around 1,000 consolidated individual cases in WestVirginia. British American Tobacco (Investments) Limitedhas been dismissed from those West Virginia consolidatedsmoking and health cases in which it was a defendant.

5. Conduct-based claimsIn 1999, the US Department of Justice brought an actionagainst various industry members, including RJRT andB&W. British American Tobacco (Investments) Limitedis a co-defendant in the action. The trial of this claimwas completed in June 2005. In August 2006, the DistrictCourt issued its final judgment, finding in favour of theGovernment, and against certain defendants, includingB&W and British American Tobacco (Investments) Limited.The court also ordered a wide array of injunctive relief,including a ban on the use of ‘lights’ and other similardescriptors. Defendants filed a motion to stay enforcementof the judgment shortly after the judgment was issued.The court denied the stay motion, but defendants fileda notice of appeal and an emergency motion to stay thejudgment before the Washington DC Circuit Court ofAppeals in September 2006. In October 2006, the Courtof Appeals granted defendants’ motion to stay enforcementof the judgment pending the outcome of the appeal.

6. Settlement of State Health Care Reimbursement CasesAfter an Independent Auditor found that the terms of theMaster Settlement Agreement (MSA) were a ‘significantfactor’ in market share losses experienced by signatoriesto the MSA in 2003, several US tobacco companiesasserted their rights under the MSA to recover a paymentcredit or offset for MSA payments made in April 2004.The amount at stake exceeds US$1 billion. The settlingstates have filed motions seeking enforcement of certainMSA provisions and defendants have opposed thesemotions, arguing instead for arbitration.

7. Other claimsThe Flintkote Company (Flintkote), a US asbestos productionand sales company, was included in the acquisition ofGenstar Corporation by Imasco Limited (now ImperialTobacco Canada Limited (Imperial)) in 1986 and becamea Group subsidiary following the restructuring of Imascoin 2000. In 2003, Imperial divested Flintkote and then,in 2004, Flintkote filed for bankruptcy in the US. In 2006,Flintkote, certain representatives of both the present andfuture asbestos claimants as well as certain individualasbestos claimants were permitted by the bankruptcy courtto file a complaint against Imperial and other defendantsfor the recovery of dividends paid and other compensationunder various legal theories. The parties are presentlyengaged in case management discussions to establish thescope and manner of discovery in this case. This litigationis expected to take several years to proceed to trial.

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In Wisconsin, the Authorities have identified potentiallyresponsible parties to fund the clean up of the Fox Riverafter pollution from paper mills operating nearby, a taskcurrently estimated to cost in the order of US$600m.Among the potentially liable parties are NCR Corporationand Appleton Papers Inc. B.A.T Industries p.l.c. purchasedwhat was then NCR’s Appleton Papers Division from NCRCorporation, and B.A.T Industries p.l.c. spun off theAppleton Paper business in 1990 having obtained fullindemnities from Appleton Papers Inc. for past and futureenvironmental claims. Disputes have arisen between NCRCorporation and B.A.T Industries p.l.c. as to the indemnitiesgiven and received under the purchase agreement in1978 which disputes have been the subject of arbitrationin 1998 and 2006. Under the terms of the arbitrationawards B.A.T Industries p.l.c. has an obligation to sharethe costs of environmental claims with NCR Corporation,although it has never been required to do this becauseAppleton Papers Inc. has paid any sums demanded.It is our belief that all future environmental liabilitieswill continue to be met directly by Appleton Papers Inc.by self funding or insurance cover and no demand willbe made upon B.A.T Industries p.l.c. by NCR Corporation.

Other foreign litigationAt 31 December 2006, active claims against Groupcompanies existed in 18 countries outside the United Statesbut the only countries with more than five active claims wereArgentina, Brazil, Canada, Chile, Italy and the Republic ofIreland. As at 31 December 2006, there were some 1,142pending individual cases in Italy. 1,113 cases are pendingbefore the Justice of the Peace Courts, the majority ofwhich relate to claims of alleged fraud in connection with‘light’ cigarettes. Because of the type of court involved,the most an individual plaintiff can recover is €1,033.There are around 27 smoking and health cases filed byor on behalf of individuals. There are also two labourcases for alleged occupational exposure pending in Italy.

The Supreme Court of Canada has upheld the constitutionalityof the British Columbian Tobacco Damages and Health CareCosts Recovery Act. Non-Canadian defendants challengedthe personal jurisdiction of the British Columbia Court butthese motions were dismissed. The Court found a ‘real andsubstantial connection’ between British Columbia and theforeign defendants. Defendants’ appeal to this decisionwas dismissed in September 2006. Defendants then filedleave to appeal to the Supreme Court in November 2006.

In addition, there are five class actions and four individualcases in Canada. In the Knight class action, the SupremeCourt of British Columbia certified a class of all consumersof Imperial manufactured cigarettes in British Columbia, notjust British Columbia residents. Defendant’s appeal washeard in February 2006, and the Appeal Court confirmed

the certification of the class but limited any liability, ifproved, to the period from 1997. In Quebec, in February2005, two smoking and health class actions were certified.There is no right of appeal against class certification.

Imperial is currently being investigated by the Royal CanadianMounted Police relating to its business records and sales ofproducts exported from Canada between 1989 and 1994.No action has been commenced against Imperial. Imperialbelieves that it has conducted itself appropriately at all times,but cannot predict the outcome of any such investigation,or whether additional investigations will occur.

Two actions have been started in Russia by a minorityshareholder in OJSC Company British American Tobacco-Yava (BAT-Yava), a Russian incorporated subsidiary ofBritish American Tobacco Holdings (Russia) B.V. Theminority shareholder, Branston Holdings, issued a claimin Moscow seeking to have a contract between BAT-Yavaand its sister company invalidated, and issued anotherclaim in the Stavropol region alleging that certain ofthe directors of BAT-Yava, and other parties, took variousunlawful steps. The Moscow Court has dismissed the claimand the Stavropol Court has ordered the transfer of thecase filed there to Moscow. An appeal of the dismissedMoscow case has been sent to the Moscow AppellateCourt. Branston has also threatened actions in theNetherlands and England but has not yet commencedthese. The Company considers these actions to bewithout merit and will defend the claims strenuously.

ConclusionWhile it is impossible to be certain of the outcome of anyparticular case or of the amount of any possible adverseverdict, the Company believes that the defences of theGroup companies to all these various claims are meritoriousboth on the law and the facts, and a vigorous defence isbeing made everywhere. If an adverse judgment wereentered against any of the Group companies in any case,an appeal will be made. Such appeals could require theappellants to post appeal bonds or substitute securityin amounts which could in some cases equal or exceedthe amount of the judgment. In any event, with regardto US litigation, the Group has the benefit of the RJRTIndemnification. At least in the aggregate and despitethe quality of defences available to the Group, it is notimpossible that the results of operations or cash flows ofthe Group in particular quarterly or annual periods couldbe materially affected by this and by the final outcome ofany particular litigation.

Having regard to these matters, the Directors (i) do notconsider it appropriate to make any provision in respectof any pending litigation and (ii) do not believe that theultimate outcome of all this litigation will significantlyimpair the financial condition of the Group.

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RegistrarEnquiries concerning your shareholding, mandating yourdividends (including consolidated dividend tax vouchers)and notifying changes in your personal details should bedirected to Computershare Investor Services PLC, PO Box 82,The Pavilions, Bridgwater Road, Bristol BS99 7NH,tel: 0800 408 0094 (UK); +44 870 889 3159

Onlinewww.bat.comAccess comprehensive information about British AmericanTobacco and download shareholder publications at thecorporate website; visit the Investor Centre for valuationand charting tools and dividend and share price data; andsubscribe to the e-mail and SMS alert services for key financialevents in the British American Tobacco financial calendar

www.computershare.com/uk/investor/briAccess the web-based enquiry service for shareholdersoperated by Computershare Investor Services; view detailsof your British American Tobacco shareholding and recentdividend payments and register for shareholder electroniccommunications to receive notification of British AmericanTobacco shareholder mailings by e-mail

www.computershare.com/dealing/UKGo online or telephone 0870 703 0084 (UK) to buy or sellBritish American Tobacco shares

[email protected] Computershare Investor Services by e-mail

PublicationsCopies of current and past Annual Report and Accountsand Annual Reviews are available on request. Copiesof the Group corporate descriptive booklet About Usand past Quarterly Reports are also available. Highlightsfrom these publications can be produced in alternativeformats such as Braille, audio tape and large print.Contact British American Tobacco Publications, Unit 80,London Industrial Park, Roding Road, London E6 6LStel: +44 (0)20 7511 7797, facsimile: +44 (0)20 7540 4326,e-mail: [email protected]

Dividend Reinvestment PlanA straightforward and economic way of utilising yourdividends to build up your shareholding in BritishAmerican Tobacco; contact Computershare InvestorServices for details

American Depositary ReceiptsBritish American Tobacco sponsors an AmericanDepositary Receipt (ADR) programme in the UnitedStates. Enquiries regarding ADR holder accounts andpayment of dividends should be directed to ShareholderRelations, The Bank of New York, PO Box 11258,

Church Street Station, New York, NY 10286-1258, USA,tel: +1 888 BNY ADRS (toll-free) or +1 212 815 3700,e-mail: [email protected]: www.adrbny.com

Individual Savings Accounts (ISAs)A British American Tobacco sponsored ISA; contact TheShare Centre, PO Box 2000, Aylesbury, Bucks, HP21 8ZB,tel: 0800 800 008 (UK); +44 (0)1296 414 141,e-mail: [email protected]; website: www.share.co.uk

Capital gains taxFact sheet for British American Tobacco historicalcapital gains tax information; contact the BritishAmerican Tobacco Company Secretarial Department,tel: +44 (0)20 7845 1000 or access the Investor Centreat www.bat.com/investorcentre/cgt

Final dividend 2006Ex-dividend date – 7 March 2007Record date – 9 March 2007Payment date – 3 May 2007

Annual General MeetingThursday, 26 April 2007 at 11.30am, The MermaidConference & Events Centre, Puddle Dock, Blackfriars,London EC4V 3DB

Financial results 2007First quarter – 3 MayInterim – 26 JulyThird quarter – 1 November

Analyses of shareholdersAt 31 December 2006, there were 2,068,803,944ordinary shares in issue held by 60,226 shareholders.These shareholdings are analysed as follows by categoryof shareholder and size of shareholding:

PercentagePercentage of issued

Category of Number of of total Number of ordinaryshareholder holders holders ordinary shares share capital

Individuals 53,283 88.47 77,196,613 3.74Financial institutions/pension funds 273 0.46 5,913,028 0.29Nominee companies 6,162 10.23 1,356,353,424 65.56Other corporate holders 507 0.84 25,004,252 1.21R&R Holdings S.A. 1 – 604,336,627 29.20

60,226 100.00 2,068,803,944 100.00

Percentage of issuedSize of shareholding Number of holders ordinary share capital

1 – 1,999 48,232 1.262,000 – 9,999 9,852 1.7910,000 – 199,999 1,609 3.24200,000 – 499,999 215 3.33500,000 and over 318 90.38

60,226 100.00

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