Directors' Report: Governance - British American Tobacco

www.bat.com/annualreport2009
programme. In addition, a focused schedule of visits to key institutional
shareholders was undertaken following the appointment of Richard
Burrows as Chairman, as part of his induction process.
Investor seminars and analyst presentations, including those following
the announcement of the preliminary results and the half-year report,
are available by webcast, and other presentations made to institutional
investors are available on www.bat.com. There is a debt micro site
on www.bat.com for debt investors, which includes comprehensive
bondholder information on credit ratings, debt facilities, outstanding
bonds and maturity profiles.
At least twice a year, the Head of Investor Relations presents a report
to the Board on the various issues raised by institutional shareholders.
In addition, the Board receives a report at each of its meetings on any
changes to the holdings of the Company.
Communications with shareholders
As part of its continuing shareholder strategy, the Company
recognises the benefits of electronic communications with its
shareholders. During 2009, the Company contacted relevant
shareholders to encourage them to move away from receiving
paper copies of Company documentation and to register for email
communication. In particular, shareholders were encouraged to use
the dividend mandate instructions in preference to receiving individual
cheques. Shareholders will benefit by receiving their dividend on the
date of payment and the Company and the environment benefit
from a reduction of paper and energy consumption. It is with this
background that the Company is proposing to make the appropriate
amendment to its Articles of Association at the forthcoming Annual
General Meeting in order that it may, in the future, pay its dividends
solely by the direct credit method. The Company has no immediate
plans to implement this change but it is considered prudent to
incorporate the necessary provision at this time, given that other
changes are in any event being made to the Articles of Association.
Annual General Meeting
The Annual General Meeting will be held at The Mermaid Conference
& Events Centre, Puddle Dock, Blackfriars, London EC4V 3DB at
11.30am on 28 April 2010. Details of the business to be proposed at
the meeting are contained in the Notice of Annual General Meeting
which is sent to all shareholders and is also published on www.bat.com.
The Annual General Meeting provides a useful opportunity for
shareholder engagement and, in particular, for the Chairman to
explain the Company’s progress and receive questions from investors.
The chairmen of the Audit, CSR and Remuneration Committees are
normally available at the Annual General Meeting to take any relevant
questions, and all other Directors attend, unless illness or another
pressing commitment precludes them from doing so. All Directors
attended the Annual General Meeting in April 2009.
The Company provides for the vote on each resolution to be by poll
rather than by show of hands. This provides for greater transparency
and allows the votes of all shareholders to be counted, including those
cast by proxy. The Chairman announces the provisional voting results
at the Meeting, and the final results are announced on the same day
Directors’ report: Governance
British American Tobacco Annual Report 2009
to the London Stock Exchange and the JSE Limited in South Africa,
and also on www.bat.com. The Company appoints an independent
assessor to scrutinise the Annual General Meeting and to produce a
report of the meeting, covering the proxy voting process, attendance
and an audit of the poll procedures. The report in 2009 confirmed the
adequacy, accuracy and fairness of the proxy process and the voting
procedures and systems.
Stock market listings
The ordinary shares of the Company (as British American Tobacco
p.l.c.) have been listed on the Official List and traded on the main
market of the London Stock Exchange for listed securities since
8 September 1998 (Share Code: BATS and ISIN: GB0002875804).
The share registrar is Computershare Investor Services PLC.
Since 28 October 2008, the Company’s ordinary shares have had a
secondary listing on the JSE Limited in South Africa (JSE), under the
abbreviated name BATS and the trading code BTI. As at 31 December
2009, 239,887,274 ordinary shares of the Company (being 12.02 per
cent of the Company’s issued ordinary share capital – excluding
treasury shares) were on its South African branch register for which
Computershare Investor Services (Pty) Ltd are share registrars.
The Company’s ordinary shares are also traded on NYSE Alternext U.S.
in the form of American Depositary Receipts (ADRs) under the symbol
BTI with a CUSIP number 110448107. Each ADR represents two of the
Company’s ordinary shares and at 31 December 2009, 29,161,536
ADRs were outstanding, represented by 58,323,072 ordinary shares.
Citibank, N.A. continues to act as depositary for the ADR programme.
The Company has unlisted trading privileges for the ADR programme
and none of its securities are listed on any United States securities
exchange or registered pursuant to the securities laws of the United
States. As a result, the Company is subject to neither the NYSE
Alternext US listing standards nor the corporate governance rules
under the Sarbanes-Oxley Act of 2002. Nevertheless, the Board has
chosen, in the interests of good governance, to make a voluntary
statement explaining the principal differences and common areas
between the Company’s corporate governance practices (as explained
above) and those that would be required if the Company were
subject to those rules. The updated statement will be available on
the corporate governance section of www.bat.com from the date
of publication of the Annual Report.
Significant shareholders
At 24 February 2010, the following substantial interests (3 per cent or
more) in the Company’s ordinary share capital (voting securities) had
been notified to the Company:
Number of % of issued
ordinary shares share capital
BlackRock, Inc. 132,891,526 6.66
Legal & General Group Plc 89,640,900 4.49
Reinet Investments S.C.A. 84,303,670 4.22
Note:
The percentage of issued share capital excludes treasury shares.
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