Directors' Report: Governance - British American Tobacco

The Disclosure and Transparency Rules set out in detail the circumstances
in which an obligation of disclosure will arise, as well as certain
exemptions from those obligations for specified persons.
Under Section 793 of the Companies Act, the Company may, by notice
in writing, require a person that the Company knows or has reasonable
cause to believe is or was during the three years preceding the date of
notice interested in the Company’s shares, to indicate whether or not
that is the case and, if that person does or did hold an interest in the
Company’s shares, to provide certain information as set out in that Act.
The Disclosure and Transparency Rules further deal with the disclosure
by persons of interests in shares or debentures of the companies of
which they are Directors and certain associated companies.
The City Code on Takeovers and Mergers also imposes strict disclosure
requirements with regard to dealings in the securities of an offeror or
offeree company on all parties to a takeover and also on their respective
associates during the course of an offer period.
General meetings and notices
An Annual General Meeting and all other general meetings of the
Company must be called by at least 21 clear days’ written notice.
However, the Companies Act (as amended by the Shareholders’
Rights Regulations) allows for this period of notice for meetings other
than Annual General Meetings to be reduced to 14 clear days notice
provided that two conditions are met: (1) a company must allow
shareholders to make proxy appointments via a website (such as
that hosted by its share registrars); and (2) shareholders must pass a
special resolution at the Annual General Meeting every year approving
that shortening of the notice period to 14 days. A special resolution
enabling the Company to hold general meetings (other than Annual
General Meetings) on 14 days’ notice will be proposed at the Annual
General Meeting to be held on 28 April 2010.
Variation of rights
If the capital of the Company is divided into different classes of shares,
the rights attached to any class of shares may only be varied, either
in such a manner as provided by those rights or in the absence of any
provision, with the consent in writing of three-quarters in nominal
value of the issued shares of that class or with the sanction of a special
resolution passed at a separate meeting of holders of such shares. At
any separate meeting, the necessary quorum is two persons together
holding or representing by proxy at least one-third in nominal amount
of the issued shares of the class (but at an adjourned meeting shall be
any one person holding shares of the class or his proxy).
Unless otherwise expressly provided by the rights attached to any
shares, those rights shall be deemed to be varied by the reduction
of the capital paid up on those shares and by the creation or issue
of further shares ranking in priority for payment of a dividend or in
respect of capital or which confer on the holders voting rights more
favourable than those conferred by the first-mentioned shares, but
shall not otherwise be deemed to be varied by the creation or issue
of further shares ranking pari passu with them or subsequent to them.
OTHER STATUTORY AND REGULATORY
INFORMATION CONTINUED
Repurchase of shares
Subject to authorisation by shareholder resolution, the Company may
purchase its own shares in accordance with the Companies Act. Any
shares which have been bought back may be held as treasury shares
or, if not so held, must be cancelled immediately upon completion of
the purchase, thereby reducing the amount of the Company’s issued
share capital.
Creditor payment policy
Given the international nature of the Group’s operations, there is
not a global standard code for the Group in respect of payments to
suppliers. In the UK, the operating subsidiaries have signed up to the
Better Payment Practice Code under which each company undertakes
to: (1) seek agreement on payment terms with its suppliers at the
outset of each transaction; (2) explain its payment procedures to its
suppliers; (3) pay bills in accordance with the agreed terms and all legal
requirements; and (4) inform suppliers without delay when contesting
an invoice and settle disputes quickly. Details of the Code are available
on the website, www.payontime.co.uk.
Non-UK operating subsidiaries are responsible for agreeing terms
and conditions for their business transactions when orders for goods
and services are placed, ensuring that suppliers are aware of the terms
of payment and including the relevant terms in contracts where
appropriate. These arrangements are adhered to provided that
suppliers meet their contractual commitments.
Creditor days have not been calculated for the Company as it is
an investment holding Company and had no trade creditors at
31 December 2009.
Intra-Group pricing
The prices agreed between Group companies for Intra-Group sales
of materials, manufactured goods, charges for royalties, commissions,
services and fees are based on the normal commercial practices which
would apply between independent businesses.
On behalf of the Board
Nicola Snook
Secretary
24 February 2010
British American Tobacco p.l.c.
Registered in England and Wales No. 3407696
104 British American Tobacco Annual Report 2009 Directors’ report: Governance