REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 193 4 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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each representing one ordinary share |
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4.906% Notes due 203 0 |
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* | Application made for registration purposes only, not for trading, and only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission. |
☒ | Accelerated filer | ☐ | ||||
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☐ | Emerging growth company |
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
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![]() Explore the story of our year Featuring downloadable versions of this report, along with our ESG report and other content – all accessible on desktop, tablet and mobile. www.bat.com/reporting |
Delivering A Better Tomorrow TM |
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BAT Annual Report and Form 20-F 2021 |
* |
As verified by Vertis based on product Life Cycle Assessment data provided by an independent third party, taking into account the Group’s purchase of carbon credits through reforestation projects. |
As the global COVID-19 pandemic continues to evolve, so does the Group’s response. We remain fully committed to supporting all our stakeholders throughout the pandemic and have responded rapidly to the evolving situation, taking action to protect their interests. |
Keeping the Group Operating in a Time of Crisis The COVID-19 pandemic continues to impact the lives of many people around the world, with temporary restrictions and lockdowns across many countries leading to changes in consumer behaviour and in our operating environments. The Group continues to navigate the challenges associated with the pandemic with effective crisis management and risk management processes in place, and remains a financially resilient business. Our Board has maintained close oversight of the Group’s response to the impact of COVID-19 throughout this period. The Group remains financially robust. Looking After our People Throughout the pandemic, we have prioritised the health and wellbeing of our people. We have not furloughed any staff or utilised any government schemes (or subsidies) as a result of the pandemic, other than in respect of the deferral of tax instalment payments, largely in the U.S. in 2020. We continue to strictly adhere to guidance from governments and public health authorities, as well as our own health and safety risk assessments, to ensure that our workplaces are COVID-19 secure. Our digital transformation has enabled us to continue to utilise remote home working when needed, ensuring all employees and customers stay connected, while continuing to invest in the development of new capabilities through virtual training programmes. In many parts of the world, including our global headquarters in the UK, we have introduced a hybrid working model as appropriate and as the local regulations allow. We have implemented COVID-19-secure workplace measures for employees who have returned to their workplace. These include regular cleaning and sanitising, temperature checkpoints and COVID-19 testing. |
For all employees, we are also making sure they are aware of the extensive wellbeing support available to them, including: – Online medical consultations; – Counselling services; and – Mental health support. Vaccine Development In December of 2020 an initial New Drug Application for our COVID candidate vaccine was approved by the U.S. Food and Drug Administration (FDA) and we progressed into a Phase 1 study. This study has now been fully recruited and remains ongoing. We expect data to be available during Q1 of 2022 and will determine next steps based on these data, but also the rapidly evolving COVID-19 and treatment landscape. In addition to the ongoing clinical studies, further pre-clinical work was also completed which reinforced the potential of the plant-based platform. The team successfully produced 19 different monoclonal antibodies that met pharmaceutical requirements in about 10 days, demonstrating the flexibility, consistency and speed of the plant-based system to produce clinical-quality antibodies. To accelerate the research, development and production of novel treatments, BAT launched KBio Holdings Limited (KBio) in January 2022. The company has been created to leverage the existing and extensive plant-based technology capabilities of BAT and Kentucky BioProcessing Inc (KBP), the existing BAT-owned U.S. plant biologics organisation. Testing and Logistical Support The forms of direct support we have deployed to address the global impact of COVID-19 have continued to evolve. We have: – Provided personal protective equipment and other essential items to communities in which we operate; – Loaned testing equipment to the UK Government; – Provided access to 3D printers to help produce protective face shields; and – Donated to many funds around the world focusing on supporting local COVID-19 responses. |
Supporting our Suppliers and Communities Protecting the communities where we operate is an important pillar of our response to the pandemic. We have harnessed our strengths in science, engineering and logistics to support national responses to COVID-19. We have distributed thousands of items of PPE, sanitation kits, food and other essential items to our contracted farmers and their communities. We have also leveraged our existing farmer communication channels, including mobile apps, web portals, local media spots, videos and fact sheets, to rapidly deploy essential COVID-19 information, often to remote rural communities. Some tobacco growing communities may be particularly vulnerable to both the virus and the economic implications of a global pandemic. We are taking great care that we don’t increase the immediate vulnerability of these communities and are committed to supporting them during the inevitable economic recovery that will follow. | ||
03 |
BAT Annual Report and Form 20-F 2021 |
![]() |
![]() transformation. Our commitment to change, while delivering value to stakeholders, can be seen in the progress that has been made on our strategic priorities.
![]() |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
– |
The growth, from 13.5 million to 18.3 million, in consumers of non-combustible products was our strongest to date; |
– |
Non-combustible products now account for 12% of Group revenue, up from 4% in 2017; |
– |
Revenue from our vapour products was up 52%, with our global brand, Vuse, now the leading global vapour brand by value share; |
– |
Following volume share gains in ENA and Japan, revenue from our THP, glo, was up 34%; and |
– |
Revenue in the Modern Oral category, largely through Velo, was up 39%. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
£5 billion of revenue and profitability in our New Categories by 2025; and |
– |
50 million consumers of non-combustible products by 2030. |
^ Based upon Category Contribution – defined as profit from the sale of brands after directly attributable costs (including marketing expenses) and before the allocation of overheads |
BAT Annual Report and Form 20-F 2021 |
– |
Quantum |
– |
Unleashing Innovation |
– |
Empowering our Organisation |
– |
Shaping Sustainability |
– |
Technology and Digital e-commerce with margins above other retail channels and higher customer loyalty. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
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BAT Annual Report and Form 20-F 2021 |
– |
continuing to grow the dividend; |
– |
maintaining our target leverage corridor; |
– |
potential bolt-on M&A opportunities; and |
– |
share buybacks to enhance shareholder returns. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
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Our performance metrics |
Target/Ambition |
2021 |
% |
2020 |
% |
2019 |
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Consumer |
||||||||||||||||||||||||||||||
Number of Non-Combustible Product Consumers |
50 million consumers by 2030 |
18.3m |
13.5m |
10.5m |
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Market Share |
||||||||||||||||||||||||||||||
Cigarette and THP volume share growth (bps) |
Grow by 0-10 bps (2021) |
+10 bps |
+30 bps |
+20 bps |
● |
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| ||||||||||||||||||||||||||||||
Cigarette and THP value share growth (bps) |
+20 bps |
+20 bps |
+30 bps |
|||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Volume |
||||||||||||||||||||||||||||||
Cigarettes (bn sticks) |
637 |
0% |
638 |
-5% |
668 |
|||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Other Tobacco Products (bn stick equivalents) |
18 |
-9% |
20 |
-2% |
21 |
|||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Vapour (mn 10ml units/pods) |
535 |
+56% |
344 |
+52% |
226 |
|||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
THP (bn sticks) |
19 |
+79% |
11 |
+19% |
9 |
|||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Modern Oral (mn pouches) |
3,296 |
+70% |
1,934 |
+62% |
1,194 |
|||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Traditional Oral (bn stick equivalents) |
8 |
-4% |
8 |
-1% |
8 |
|||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Financial |
||||||||||||||||||||||||||||||
Revenue (£m) |
25,684 |
-0.4% |
25,776 |
-0.4% |
25,877 |
● |
||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Adjusted Revenue at cc (%) 1,2 |
3-5% CAGR |
+6.9% |
+3.3% |
● |
● | |||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Revenue from New Categories (£m) |
£5 billion by 2025 |
2,054 |
+42.4% |
1,443 |
+14.9% |
1,255 |
● |
|||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Revenue from New Categories at cc (%) 1 |
+50.9% |
+15.4% |
● |
● | ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Profit from Operations (£m) |
10,234 |
+2.7% |
9,962 |
+10.5% |
9,016 |
● |
||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Adjusted Profit from Operations at cc (%) 1, 2 |
Increase 4.0% to 6.5% (2021) |
+5.2% |
+4.8% |
● |
● | |||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Operating Margin (%) |
39.8% |
38.6% |
34.8% |
● |
||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Adjusted Operating Margin (%) 2 |
43.4% |
44.1% |
43.1% |
● | ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Diluted Earnings per Share (p) |
295.6 |
+6.0% |
278.9 |
+12.0% |
249.0 |
● |
||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Adjusted Diluted Earnings per Share (p) 2 |
329.0 |
-0.8% |
331.7 |
+2.4% |
323.8 |
● |
● | |||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Adjusted Diluted Earnings per Share at cc (%) 1, 2 |
+6.6% |
+5.5% |
● |
● | ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Dividends per Share (p) |
217.8 |
+1.0% |
215.6 |
+2.5% |
210.4 |
|||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Dividend Pay-Out Ratio (%) |
66% |
65% |
65% |
|||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Net Cash Generated from Operating Activities (£m) |
9,717 |
-0.7% |
9,786 |
+8.8% |
8,996 |
● |
||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Cash Conversion (%) |
95% |
98% |
100% |
● |
||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Borrowings, including Lease Liabilities (£m) |
39,658 |
-9.8% |
43,968 |
-3.1% |
45,366 |
● |
||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Total Shareholder Return (rank) |
17 of 24 |
20 of 23 |
21 of 23 |
● |
||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
ESG |
![]() |
Find our key ESG goals, targets and metrics in our ESG Roadmap on page 47. |
1. |
Where measures are presented ‘at constant rates’ or ‘at cc’, the measures are calculated based on a re-translation, at the prior year’s exchange rates, of the current year results of the Group and, where applicable, its segments. See page 83 for the major foreign exchange rates used for Group reporting. |
2. |
Where measures are presented as ‘adjusted’, they are presented before the impact of adjusting items. Adjusting items represent certain items of income and expense which the Group considers distinctive based on their size, nature or incidence. |
BAT Annual Report and Form 20-F 2021 |
Transformation Driving Sustainable Growth Delivering growth by reducing harm and expanding our portfolio Our corporate purpose is to build A Better Tomorrow TM . Reducing the health impact of our business, by encouraging those smokers who would otherwise continue to smoke to switch completely to scientifically-substantiated, reduced-risk alternatives*† Revenue growth in the global nicotine industry is accelerating through the development of New Categories, which offer reduced-risk alternatives to combustible products.* † To capitalise on this growth, our established consumer-centric, multi-category strategy is activated on a global scale, leveraging our insights on consumer satisfaction, innovation needs and taste. We are building strong global brands, specifically positioned in each target consumer segment. In addition, we are taking a disciplined approach to our Beyond Nicotine strategy to further drive our transformation and long-term business sustainability. We have set ourselves ambitious targets to reach 50 million consumers of our non-combustible products by 2030, with revenue reaching £5 billion (and profitability) from New Categories by 2025. These ambitions will be met through the delivery of our three clear strategic priorities:– to drive a step change in New Categories, to accelerate growth supported by increased investment; – to generate value through Combustibles, to provide the capabilities and funding; and – to simplify the Group, to create a stronger, faster, more agile organisation. * Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. † ![]() |
Reducing the Health and Environmental Impact of our Business Creating value for all our stakeholders Our work to reduce the health and environmental impact of the business will drive growth and create shared value, delivering results that benefit shareholders and wider society. We will continue to create a stronger BAT by: – focusing on excellence in environmental management; – delivering a positive social impact; and – adhering to robust corporate governance. This builds on our strong ESG foundations including our status as: – the first tobacco company to produce a Sustainability Report in 2001; – publication of a Human Rights focus report in 2020, the first of its kind by a tobacco company to be aligned with the UN framework of Human Rights reporting; – named in the Dow Jones Sustainability Indices for 20 consecutive years; and – named third highest ESG-rated FTSE 100 company by Refinitv in 2020^.Our commitments are anchored in challenging targets against which we will track and share the progress of our transformation – including achieving Net Zero across our supply chain by 2050. Meanwhile, our ‘delivery with integrity’ programme is focused on ensuring that our ethical standards are never compromised for the sake of results. ^ ![]() |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Creating the Enterprise of the Future Leveraging proven expertise and developing new capabilities to deliver our ambitions Our New Category portfolio benefits from decades of insights and expertise that have driven our No. 1 global revenue position in combustibles (excl. China). This combined with increased investment behind new capabilities gives us confidence that we can deliver our medium- to long-term ambitions. Our three global New Category brands leverage the benefits of our world-class R&D and our manufacturing, distribution, marketing and brand building capabilities, which are supported by our unrivalled global footprint across 175+ markets, with more than 11 million points of sale, reaching more than 150 million consumers daily. Together with our long-standing experience operating within complex regulatory, legal and fiscal frameworks, these provide BAT with a compelling competitive advantage to drive portfolio growth and transformation within the wider tobacco industry. Building on Quantum’s success to date, Quest will accelerate our organisational and business transformation programme, driving next generation innovations: – new digital capabilities; – empowering our people; and – enhancing our future sustainability. Through Quest, we are creating the Enterprise of the Future. We are attracting new senior talent from a diverse range of industries globally to further enhance our capabilities, which will enable us to deliver on our growth ambitions over the medium to long term. |
Continuing our Track Record of Delivery Commitment to deliver returns and cash to shareholders We are confident in our growth outlook, and have a proven track record of performance whatever the external environment. Over the last 10 years, we have delivered 9% adjusted diluted EPS growth (at constant rates) and a 6% dividend CAGR and are confident in our medium-term targets of 3-5% revenue growth, increased operating margin and high-single digit adjusted EPS growth (at constant rates).This will be driven by: – accelerated New Category revenue growth; – continued value growth in combustibles; and – business simplification to eliminate cost and improve returns, to become a stronger, simpler, more agile organisation. We have adopted a more active capital allocation framework to deliver long-term value for shareholders. This will include: – continuing to grow the dividend; – maintaining our target leverage corridor; – considering potential bolt-on M&A opportunities; and– share buybacks to enhance shareholder returns. | |||||||||
![]() |
![]() |
BAT Annual Report and Form 20-F 2021 |
United States |
U.S. |
Americas and |
AmSSA | |||||
of America |
Sub-Saharan Africa |
![]() |
||
Revenue by region |
![]() ![]() |
![]() its accelerated journey towards A Better Tomorrow TM . We delivered a year of outstanding results, with vapour fast approaching value leadership. ![]() |
![]() ![]() | ||||||||
Paul Lageweg Director, New Categories |
![]() |
Guy Meldrum President and CEO (Reynolds American Inc.) |
![]() |
Luciano Comin Regional Director, AmSSA |
![]() |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Read more about our science on pages 19, 31, 35, 37, 39 and 50 |
![]() |
Read more about our supply chain on pages 52 to 55 |
![]() |
Read more about responsible marketing on page 57 |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
See pages 92 to 97 to read more about our Principal Group Risks |
![]() |
For further discussion regarding the regulation of our business, please see pages 340 to 344 |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
** |
All data sources on this page are from Euromonitor International and based on 2020 data (the latest full year available) unless otherwise stated. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
Must Wins High Growth Segments Driven by our unique and data-driven consumer insight platform (PRISM), we will focus on product categories and consumer segments across our global business that have the best potential for long-term sustainable growth. Priority Markets By relying on a rigorous market prioritisation system (MAPS), we will focus the strengths of our unparalleled retail and marketing reach, as well as our regulatory and scientific expertise, on those markets and marketplaces with the greatest opportunities for growth. How We Win Inspirational Foresights Built on our successful history, we have a unique view of the consumer across all of our product categories, which is increasingly driven by powerful data and analytics. These insights ensure that the development and responsible marketing of our products is fit to satisfy consumer needs. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
![]() currency New Category revenue growth of over 50% combined with our reaching a total of 18.3 million consumers (up 4.8 million) of our non-combustible products. It is clear that our transformation towards A Better Tomorrow TM is accelerating.![]() | |||
Kingsley Wheaton Chief Marketing Officer |
Our Purpose By stimulating the senses of new adult generations, our purpose is to create A Better Tomorrow TM for all our stakeholders.We will create A Better Tomorrow TM for:![]() By responsibly offering enjoyable and stimulating choices for every mood and every moment, today and tomorrow; ![]() By reducing the health impact of our business by offering a range of alternative products, as well as by reducing our environmental and social impacts; ![]() By creating a dynamic, inspiring and purposeful place to work; and ![]() By delivering sustainable and superior returns. | ||
![]() |
For more information about our purpose see inside front cover |
![]() |
Simplify the Business |
![]() |
For more key detail see pages 29 to 33 |
![]() |
Ensure a Step Change in New Categories Performance |
![]() |
For more key detail see pages 35 to 40 |
![]() |
Drive Value From Combustibles |
![]() |
For more key detail see pages 42 to 43 |
BAT Annual Report and Form 20-F 2021 |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Simplify the Business |
– |
Quantum enabled more than £595 million gross savings through organisational change and productivity initiatives |
– |
BAT Digital Business Services is transforming by building new capabilities while simplifying the existing ways of working |
– |
Technology and Digital focus on simplification and automation saved more than 100,000 hours, ensuring undisrupted delivery of our commitments despite the global pandemic |
– |
In our UK Headquarters, we have implemented a new organisational design. This has been key to ensuring decision-making where the knowledge sits and seizing the opportunities from synergies and integration. |
– |
In our markets, we have assessed and streamlined our footprint through an Operating Model review. This optimisation of our footprint is expected to deliver more than £100 million of annualised savings, enabling a sharper focus on New Categories. |
– |
Our initiatives addressing both our Centre and End Markets are underpinned by our BAT Digital Business Services* (DBS) transformation and enabled by Technology & Digital simplification. |
– |
In 2021, our DBS organisation has built new capabilities in consumer, customer, and Business Intelligence areas. Simultaneously, within our existing capabilities, DBS delivered optimisations to drive excellence and efficiency. |
* |
Prior to 2021, Digital Business Services was called Global Shared Services. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
* |
As verified by Vertis based on product Life Cycle |
Assessment data provided by an independent third party, |
taking into account the Group’s purchase of carbon credits through |
reforestation projects. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Ensure a Step Change in New Categories Performance |
– |
Vuse achieves Global value leadership. |
– |
Vuse value share up 800 bps vs 2020 to reach 33.5% share in our Top 5 markets. |
– |
Consumer acquisition up 1.8m reaching 8.4m, with growth in all Top 5 markets. |
– |
Vapour volume up 56% with revenue 59% higher at constant rates of exchange. |
– |
Vuse first global vapour brand independently verified by Vertis as carbon neutral^ in May 2021. |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
^ |
As verified by Vertis based on product Life Cycle Assessment data provided by an independent third party, taking into account the Group’s purchase of carbon credits through reforestation projects. |
** |
Public Health England was replaced in Oct 2021 by UK Health Security Agency and Office for Health Improvement and Disparities |
BAT Annual Report and Form 20-F 2021 |
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Ensure a Step Change in New Categories Performance |
^ |
As verified by Vertis based on product Life Cycle Assessment data provided by an independent third party, taking into account the Group’s purchase of carbon credits through reforestation projects. |
– |
in the UK, total vapour value share of the category was 31%, compared to 36% in 2020. Vuse performed well, with value share up 210 bps to 16.9% driven by both ePen 3 and ePod; |
– |
in France, vapour value share reached 45.7% in 2021, an increase of 14.2 ppts (versus 2020), driven by ePen 3 and ePod; |
– |
in Canada, having gained value share leadership in 2020, we continued to grow, with total vapour value share up 34.3 ppts to 80.4% in 2021, driven by ePod; and |
– |
in Germany, our value share of total vapour was 59.9%, up 10.1 ppts (2020: 49.9%), driven by ePen 3 and ePod. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
glo THP category volume share up 480 bps in Top 9 markets vs 2020 to reach 18.1%. |
– |
glo consumer acquisition up 2.7m reaching 6.7m with growth in all T9 markets. |
– |
glo consumable volume up 79%, over three times industry volume growth of 26%. |
– |
glo revenue growth up 34% with year on year and sequential growth accelerating in H2 2021. |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
** |
Public Health England was replaced in Oct 2021 by UK Health Security Agency and Office for Health Improvement and Disparities. |
BAT Annual Report and Form 20-F 2021 |
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Ensure a Step Change in New Categories Performance |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
Continued strong global volume growth (up 70.5%), with consumer numbers up 0.6m to 2.1m. |
– |
ENA revenue up 44%, with volume up 46% driving volume share to 69.4%, up 380 bps. |
– |
US volume up 272%, with volume share of Modern Oral at 11.7%, up 410 bps vs 2020 in a highly competitive market. |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
BAT Annual Report and Form 20-F 2021 |
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Ensure a Step Change in New Categories Performance |
– |
In Sweden, where Modern Oral has grown to represent 13.5% of the total oral category, our volume share of the Modern Oral category reached 59.6%, an increase of 580 bps on 2020**; |
– |
In Norway, where Modern Oral now represents 28.7% of the total oral category, our volume share of the Modern Oral category grew to 63.9%, up 180 bps on 2020, having declined 270 bps in 2020 from 64.8% in 2019; and |
– |
In Denmark, where Modern Oral now represents 90.5% of the total oral category, our volume share of Modern Oral category fell 130 bps to 92.6%. |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
** |
Sweden volume share has been re-based to include Nicotine free pouches in all periods. Accordingly, our 2020 volume share of Modern Oral was re-based to 53.8%. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
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Drive Value From Combustibles |
– |
Group value share up 10 bps, driven by the U.S. up 60 bps. |
– |
Volume share down 10 bps. |
– |
Strong price/mix +4.3%. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
Dunhill’s overall value share was down 10 bps (2020: down 10 bps) as growth in Romania, Pakistan, Taiwan and Brazil was more than offset by declines in Indonesia, South Korea, Australia and Saudi Arabia. Volume was 8.9% lower (2020: down 17%), largely due to the impact of the tax increases and minimum retail price compliance in Indonesia; |
– |
Kent’s value share was stable (2020: stable) as growth in Turkey, Russia, South Korea, Saudi Arabia and Ukraine was offset by lower value share in Japan, Romania and Brazil. Volume was down 2.6% (2020: up 2.0%) as growth in Turkey was more than offset by lower volume in Japan and the Middle East (due to the sale of the business in Iran partway through the year); |
– |
Lucky Strike’s value share grew 30 bps (2020: up 10 bps), as growth in the U.S. (following launch in December 2020), AMSSA (particularly Brazil, Colombia and Chile), Japan, Russia and Germany more than offset lower value share in Indonesia, France and Spain. Volume grew 19.6% (2020: down 2.0%) driven by Russia, the U.S., Brazil, Algeria and Japan, partially offset by the impact of the tax increases and minimum retail price compliance in Indonesia; |
– |
Rothmans’ value share was 10 bps lower (2020: up 10 bps) as growth in Brazil, the Czech Republic and Malaysia was offset by lower value share in Russia, Australia, |
New Zealand, Poland, South Korea, South Africa, Ukraine and the UK. Volume was 3.0% lower (2020: up 6.1%) as growth in Brazil and Cuba was more than offset by lower volume in Russia, Ukraine and Kazakhstan; and |
– |
Pall Mall’s value share was 20 bps lower (2020: stable) as growth in Mexico and Germany was more than offset by lower value share in the U.S., Saudi Arabia, Australia, Canada, Chile, Romania and New Zealand. Volume was up 2.2% (2020: down 6.0%) largely driven by Pakistan. |
– |
Newport value share increased 70 bps (2020: up 50 bps), while volume declined 3.3% (2020: up 2.3%); |
– |
Natural American Spirit performed well with value share up 20 bps (2020: up 20 bps). Volume was marginally lower than 2020 (down 0.8%), having increased 6.0% in 2020 vs 2019; and |
– |
Camel’s value share declined 30 bps in the US (2020: stable) with volume 9.0% down (2020: up 1.2%), driven by competitive pricing pressures. |
BAT Annual Report and Form 20-F 2021 |
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Find out more at www.btomorrowv.com |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
BAT Annual Report and Form 20-F 2021 |
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Details of how we identify our focus areas can be found in the Materiality section of our 2021 ESG Report at www.bat.com/esgreport. |
All energy and emissions data in the table on page 47 are calculated in accordance with the Greenhouse Gas (GHG) Protocol Corporate Standard. For further details of our energy and emissions methodologies. please see www.bat.com/reporting |
1. |
UK-based activities include 2,276 tonnes of Scope 1 CO2 e emissions (2020: 2,200) and 173 tonnes of our Scope 2 CO2 e emissions (2020: 398). See pages 52-53 and 61 for details of the principal measures taken for the purposes of increasing energy efficiency across the Group. |
2. |
Due to the complexity of consolidating and verifying Scope 3 data in accordance with the GHG Protocol, we report one year behind. As such, 2021 Scope 3 data will be reported in the 2022 Report. |
3. |
Energy consumption from activities for which the Company is responsible (in million kWh): 2021: 1,508, 2020: 1,572, 2019: 1,820. Of the total figure reported for the Group for 2021, 10 million kWh is from the UK-based activities (2020: 10 million kWh). Energy consumption resulting from the purchase of electricity by the Company for its own use (in million kWh): 2021: 972, 2020: 996, 2019: 1,054. Of the total figure reported for the Group for 2021, 16 million kWh is from the UK-based activities (2020: 17 million kWh). |
BAT Annual Report and Form 20-F 2021 |
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Full details and downloads of our policies and standards can be found at bat.com/principles. |
Name (*Board endorsed) |
Summary of areas covered |
Stakeholder groups | ||
Standards of Business Conduct (SoBC)* |
Sets out our policies for: Speak Up, respect in the workplace, human rights, health, safety and welfare, environment, lobbying and engagement, conflicts of interest, anti-bribery and corruption (ABAC), gifts and entertainment, political contributions, community investment, corporate assets and financial integrity, competition and anti-trust, anti-money laundering and tax evasion, sanctions, anti-illicit trade, data privacy and information security. |
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Supplier Code of Conduct* |
Covers: human rights, health and safety, environmental sustainability, responsible marketing, anti-illicit trade, ABAC, gifts and entertainment, conflicts of interest, tax evasion, sanctions, data privacy and cyber risk. |
![]() | ||
Environmental Policy* |
Our commitments to following high standards of environmental protection, adhering to the principles of sustainable development and protecting biodiversity covering our direct operations and supply chain, including agricultural, manufacturing and distribution operations. |
![]() | ||
International Marketing Principles (IMP)* |
The standards that govern marketing across all our product categories and including the requirement for all our marketing to be targeted at adult consumers only. |
![]() | ||
Youth Access Prevention (YAP) Guidelines |
Support our strict IMP requirement to only direct marketing at adult consumers by setting out clear requirements for YAP activities in all markets where our products are sold. |
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Biodiversity Statement |
Sets out the principles we follow to manage our biodiversity footprint across our operations. |
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Circular Economy Position Statement |
Our commitment to applying circular economy principles across our operations and product categories. |
![]() | ||
Operational standard on child labour prevention |
Detailed guidance and procedures for our leaf operations in tackling the risk of child labour in our tobacco supply chain. |
![]() | ||
Community Investment Framework |
Sets out the Group strategy for community investment and charitable donations, aligned to the United Nations Sustainable Development Goals. |
![]() | ||
Group Quality Policy Statement |
Formalises how we strive to deliver defect-free products, processes and capabilities that create sustainable value for our brands. |
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BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 was a pivotal year for sustainability at BAT. It marks the 20th year of our inclusion in the Dow Jones Sustainability Indices, as well as the 20th anniversary of publishing our first Social Report. We are proud of how much we have achieved over the last 20 years. Today, we are building on these strong foundations to accelerate progress towards A Better Tomorrow TM . |
A rating and award is not a recommendation to buy, sell or hold securities. A rating and award may be subject to withdrawal or revision at any time. Each rating and award should be evaluated separately of any other rating. The methodologies of any rating or award presented here may not be the same as those of other ratings, awards or methodologies that may be used by our stakeholders, and may emphasize different aspects of ESG practices and performance, and, thus, may not be representative of our ESG performance in all respects. |
15. |
Our listing in the Dow Jones Sustainability Indices (DJSI) is based on November 2021 score in the S&P Global Corporate Sustainability Assessment. |
16. |
An MSCI ESG Rating is designed to measure a company’s resilience to long-term, industry material environmental, social and governance (ESG) risks. |
17. |
A Sustainalytics score of zero out of 100 represents the lowest ESG risk. BAT’s ESG Risk Rating places the company in the 16th percentile of the industry group which we are assessed in. |
BAT Annual Report and Form 20-F 2021 |
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Why harm reduction matters We know combustible products pose serious health risks. The only way to avoid those risks is to not start – or to quit – smoking. Yet more than 1.1 billion people today continue to consume tobacco and nicotine products globally. ‘Tobacco harm reduction’ is a well-recognised public health strategy that aims to minimise the harm caused by combustible cigarettes by encouraging adult smokers, who would otherwise continue to smoke, to switch completely to scientifically substantiated, reduced-risk alternatives* † Some 100 million adult smokers worldwide have already switched to reduced risk tobacco and nicotine products. We encourage those who would otherwise continue to smoke, to switch. This means enabling consumer choice through making available a range of alternatives to smoking that deliver comparable satisfaction in nicotine delivery, use and sensorial aspects. For example, some studies suggest that vapour products are more successful than nicotine replacement therapy in providing a satisfactory alternative to cigarettes, 1,2 despite not being smoking cessation products nor marketed as such.These products need to be supported by world-class science and industry-leading standards. Responsible, science-backed and well-thought-through regulation is also crucial for enabling adult consumers to access and enjoy reduced-risk products*† with confidence, while governments and health bodies can be assured that these products are manufactured to high safety and quality standards. | |
* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. † Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
1. Cox et al, (2019). Effects of e-cigarettes versus nicotine replacement therapy on short-term smoking abstinence when delivered at a community pharmacy. Addict Behav Rep 2019. https://doi.org/10.1016/j.abrep.2019.100202 . 2. Hajek et al. (2019). A Randomized Trial of E-Cigarettes versus Nicotine-Replacement Therapy. N Engl J Med 2019. https://doi.org/10.1056/NEJMoa1808779 . |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Find out more about our New Category products on pages 35 to 40 |
![]() |
Find details of our world-class science on pages 35, 37 and 39 |
BAT Annual Report and Form 20-F 2021 |
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on-site generation solar coming online in Pakistan, Indonesia, Germany, and South Korea. In places like South Africa, solar plays an important role in the overall site’s electricity decarbonisation. In 2021 the site generated green electricity equivalent to avoiding 1,840 tCO2 . Factories in Brazil and Chile, and Switzerland’s manufacturing and commercial sites also passed independent carbon neutral certification in 2021 against PAS 2060 – an internationally recognised certification on carbon neutrality.In our tobacco supply chain, we support over 75,000 contracted farmers globally, helping them to reduce emissions through innovative technologies and ‘carbon-smart’ farming practices throughout the growing cycle. We also continue to actively work with our largest 30 direct product materials suppliers that represent 15% of CO 2 e emissions for this part of our supply chain. In 2021, they participated in a detailed, one-to-one Our products are intrinsically linked to our sustainability ambitions. By building sustainable brands with purpose, we are bringing our consumers on our journey with us. So, in 2021, we were proud to announce that Vuse was certified as the first global carbon neutral vape brand. 1 Eliminating Waste Our Circular Economy Position Statement sets out our key principles across our operations and product categories. In 2021, we developed new Circular Economy Guidelines and training to provide our people with a common understanding and details of how to apply these principles across different business areas, products and geographies. We have conducted studies to map our waste footprint intensity across our value chain and have established cross-functional sustainability workstreams for all our product categories. We are focused on eliminating unnecessary single-use plastic across all packaging and, by the end of 2021, had achieved a 13% reduction in total weight.1. Based on ePod, ePen, eTank mini, Alto devices and consumables internal sales forecast (calculated March 2021) for 12 months starting from April 2021. | |||
Our Environmental Policy is adopted by all our Group companies. It outlines our commitment to high standards of environmental protection, adhering to the principles of sustainable development and protecting biodiversity. Tackling Climate Change Our ambition to be a carbon neutral (Scope 1 and 2) business by 2030 is supported by a range of operational targets. Already, we’re making significant progress with a reduction of 42.7% in Scope 1 and 2 CO 2 e emissions against our 2017 baseline.We also recognise the importance of looking beyond the operations we directly control – so we have set a target for net zero carbon emissions across our value chain by 2050. |
To deliver these stretching targets, we have an integrated climate strategy covering both our own business operations and our wider value chain. This includes utilising multiple opportunities, from on-site renewable energy generation and purchasing renewable electricity, to transitioning our distribution fleet to electric and hybrid vehicles.In addition, in 2021, we incorporated internal carbon pricing into business plans to ensure the impact on environmental performance and targets is formally considered and quantified. This has supported the prioritisation of sustainability projects such as on-site renewable energy generation.By the end of 2021, 32 of our operations sites were purchasing 100% renewable electricity and 19 were generating renewable energy on-site, such as with solar panels. As of last year, we had |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
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Community investment In many parts of the world, we partner with NGOs and other stakeholders on projects to support the local communities where we operate. These programmes focus on a range of issues, such as women’s empowerment, financial inclusion, access to healthcare, clean water and sanitation and supporting national responses to the COVID-19 pandemic.Our community investment policy in our SoBC is supported by our Community Investment Framework, which sets out how Group companies should develop, deliver and monitor community investment programmes. In 2021, the Framework was revised to align our community investment strategy with the UN Sustainable Development Goals. Across the Group, £19 million was reported for community investment programmes in 2021, including £12.6 million in cash spend and a further £6.4 million estimated for in-kind donations. This includes £0.96 million given for charitable purposes by UK Group companies.Human Rights Our integrated human rights strategy is aligned to the UNGPs and includes policies, due diligence, grievance channels and remediation procedures for our own business operations and supply chain. Our Human Rights policy forms part of our Standards of Business Conduct and is reflected in our Supplier Code of Conduct. This is complemented by our operational standard on child labour prevention, which provides detailed guidance and procedures for our leaf operations in tackling the risk of child labour in our tobacco supply chain. Tobacco supply chain The most significant challenges for human rights are in our tobacco supply chain and this has been a priority area for us for many years. Human rights issues in agriculture can be complex, and we know that the situation on the ground can be nuanced and that remediation requires cooperation and dialogue, rather than confrontation. This is why our approach emphasises working with families and communities to find sustainable solutions while respecting local context and the challenges of operating small, family-run farms. | |||
Farmer Livelihoods If farmers have sustainable living incomes, farming is more attractive to the next generation. It also reduces the risks of exploitation, as well as child and forced labour, and helps encourage improved adherence to safety and environmental standards. That’s why enhancing farmer livelihoods is such an important priority area of our Sustainability Agenda and is central to our tobacco supply chain strategy. Our Extension Services of expert field technicians support our 75,000+ contracted farmers throughout the growing cycle, helping to develop their skills, promote better yields and build their resilience. |
This includes providing new tobacco varieties that produce higher quality leaf and increase yields by up to 20%, as well as mechanised solutions and technology to help farmers scale up production and reduce manual labour. We have been measuring farmers’ yields, profit margins and revenues from tobacco as part of our Thrive |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
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Find out about our Group risk factors related to workplace health and safety on page 96. |
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Find out details of our approach to people and culture on pages 68-73. |
BAT Annual Report and Form 20-F 2021 |
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Read more about our Group risk factors related to corporate behaviour and compliance with sanctions regimes and competition laws on pages 317 to 339. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
No wrongdoing was found in 154 cases (2020: 158); |
– |
The investigation continued at year-end for 51 cases (2020: 47); and |
– |
99 cases were established as breaches and appropriate action taken (2020: 116). |
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Please refer to the Governance Report for more information about Board and Audit Committee oversight and monitoring of SoBC compliance. |
*** |
Waivers from YAP Guidelines are granted where there is a government ban on point-of-sale |
BAT Annual Report and Form 20-F 2021 |
– |
Selection of risks and opportunities for deep dive modelling based on relative strategic importance, and availability of value adding methodologies and data. This process was supported by two external consultancies. We will broaden and deepen this analysis in future years as data and methodologies improve. |
– |
Engagement with colleagues across the Group, which was crucial to gather data and test assumptions. Multiple workshops and interviews were held with teams across the organisation, including our Management Board, and our Risk Management, Finance, Treasury, New Categories, Legal, Government Affairs, Investor Relations, Supply Chain and Leaf teams. |
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Details of key climate-related matters considered by the Board in 2021 can be found on page 105 and 120 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
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Read more about our Quest programme for accelerating our transformation towards the Enterprise of the Future on pages 30-31 |
a) |
Describe the board’s oversight of climate-related risks and opportunities. |
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Read more on page 58 |
b) |
Describe management’s role in assessing and managing climate-related risks and opportunities. |
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Read more on page 60 |
a) |
Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term |
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Read more on pages 61-64 |
b) |
Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. |
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Read more on pages 64-67 |
c) |
Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. |
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Read more on pages 62-64 |
a) |
Describe the organisation’s processes for identifying and assessing climate-related risks. |
![]() |
Read more on pages 62-66 |
b) |
Describe the organisation’s processes for managing climate-related risks. |
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Read more on pages 62-66 |
c) |
Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. |
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Read more on pages 62-66 |
a) |
Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. |
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Read more on pages 47 and 61 |
b) |
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. |
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Read more on pages 47 and 61 |
c) |
Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. |
![]() |
Read more on pages 47 and 61 |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
the performance of climate scenario analysis to inform our understanding of risks and opportunities; |
– |
the performance of life cycle assessments of our products and the incorporation of end of life treatment to reduce their environmental impact. Reducing the use of embodied carbon and single use plastic, and increasing recyclability to reduce the level of waste generated; |
– |
enhancing the resilience of our internal supply chain and wider value chain to maintain access to critical raw materials, and insulating our business from the impact of supply constraint-driven inflationary pressures; |
– |
the environmental impact of our direct operations, including the reduction of CO 2 e generated by our sites and fleet through energy saving initiatives and increased use of renewable energy (both purchased and self-generated), as well as reducing the waste generated and maximising the share of waste directed to recycling; |
– |
ensuring effective and efficient use of natural resources throughout our value chain, including where possible greater use of green energy and reduction of water usage and waste generation. This supports the allocation of these critical natural resources to food generation and other activities, and reduces our susceptibility to energy cost premiums and future carbon taxes; and |
– |
continued investment in R&D activity to underpin product innovations, technical deployment of agronomy best practices, low carbon curing technologies and farming techniques based on science. |
BAT Annual Report and Form 20-F 2021 |
– |
internal senior management spanning all functions of the Group, based at DRBU, Regional, and Group level; |
– |
external consultants supporting our preparations for and resilience to climate change; |
– |
relevant industry publications outlining expected impacts of climate change on our key inputs (including agriculture); |
– |
relevant regulation (enacted or draft) that may impact the Group’s products, locations, or operations; |
– |
TCFD guidance on potential risks and opportunities; and |
– |
existing risks and opportunities identified and managed as part of our Group risk management processes. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Total Emissions (thousand tonnes tCO 2 e) |
||||||||||||||||||
Emission Source |
Category |
2017 |
2018 |
2019 |
2020 |
|||||||||||||
Scope 1 |
– |
415 |
396 |
342 |
||||||||||||||
Scope 2 Market-based |
– |
426 |
386 |
199 |
||||||||||||||
Scope 2 Location-based |
– |
490 |
453 |
418 |
||||||||||||||
Total Scope 3 |
– |
6,956 |
6,781 |
5,587 |
||||||||||||||
Purchased Goods and Services |
Category 1 Total |
4,363 |
4,049 |
4,011 |
||||||||||||||
Purchased goods – Directs (excluding NGP) |
Category 1 |
1,550 |
1,488 |
1,140 |
||||||||||||||
Purchased goods – NGP |
Category 1 |
43 |
55 |
47 |
||||||||||||||
Purchased Services |
Category 1 |
35 |
107 |
720 |
||||||||||||||
Purchased Tobacco Leaf – Combustibles |
Category 1 |
2,550 |
2,184 |
1,966 |
||||||||||||||
Tobacco Leaf – NGP |
Category 1 |
18 |
5 |
2 |
||||||||||||||
Other Purchased Goods & Services |
Category 1 |
167 |
210 |
135 |
||||||||||||||
Capital Goods |
Category 2 Total |
519 |
463 |
177 |
||||||||||||||
Fuel and Energy Related Emissions |
Category 3 Total |
177 |
166 |
134 |
||||||||||||||
Upstream Transportation & Distribution |
Category 4 Total |
192 |
197 |
225 |
||||||||||||||
Waste Generated in Operations |
Category 5 Total |
5 |
5 |
9 |
||||||||||||||
Business Travel |
Category 6 Total |
38 |
33 |
8 |
||||||||||||||
Employee Commuting |
Category 7 Total |
27 |
23 |
53 |
||||||||||||||
Use of Sold Products |
Category 11 Total |
662 |
587 |
641 |
||||||||||||||
End-of-Life |
Category 12 Total |
967 |
1,253 |
324 |
||||||||||||||
Franchises |
Category 14 Total |
5 |
5 |
5 |
BAT Annual Report and Form 20-F 2021 |
Level of likelihood/impact by | ||||||||||||
Type |
Scenario |
2020 – 2025 |
2026 – 2035 |
2036 – 2050 | ||||||||
Opportunities | ||||||||||||
Products & services |
Increased revenues due to shift in consumer preferences resulting in access to new and emerging markets and increased demands for our products* | 1.5ºC |
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>3-4ºC |
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Energy sourcing |
Reduced costs due to use of lower-emission sources of energy within our direct operations* | 1.5ºC |
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|
>3-4ºC |
|
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Resource efficiency |
Reduced costs due to use of more efficient production and distribution processes | 1.5ºC |
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>3ºC |
|
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Transition risks | ||||||||||||
Emerging regulation |
Increased costs due to new carbon pricing mechanisms on the emissions within our value chain | 1.5ºC |
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|
>3-4ºC |
|
![]() |
![]() |
![]() | |||||||
Emerging regulation |
Increased costs due to mandates on, and regulation of, products and services* | 1.5ºC |
![]() |
![]() |
![]() | |||||||
|
>3-4ºC |
|
![]() |
![]() |
![]() | |||||||
Market |
Increased costs due to contraction of insurance markets, higher premiums or losses arising from uninsured assets | 1.5ºC |
![]() |
![]() |
![]() | |||||||
|
>3-4ºC |
|
![]() |
![]() |
![]() | |||||||
Market |
Increased costs due to increasing energy prices impacting direct operating costs as well as the cost of raw materials* | 1.5ºC |
![]() |
![]() |
![]() | |||||||
|
>3-4ºC |
|
![]() |
![]() |
![]() | |||||||
Market |
Increased costs and/or reduced access to capital markets due to climate change driven increases to operating costs and ESG concerns from investors | 1.5ºC |
![]() |
![]() |
![]() | |||||||
|
>3-4ºC |
|
![]() |
![]() |
![]() | |||||||
Physical risks | ||||||||||||
Acute |
Decreased revenues due to increased severity and frequency of extreme weather events such as cyclones and floods, leading to agricultural supply chain disruption and reduced production capacity | 1.5ºC |
![]() |
![]() |
![]() | |||||||
|
>3-4ºC |
|
![]() |
![]() |
![]() | |||||||
Chronic |
Decreased revenues due to water stress leading to agricultural supply chain disruption and reduced production capacity* | 1.5ºC |
![]() |
![]() |
![]() | |||||||
|
>3-4ºC |
|
![]() |
![]() |
![]() | |||||||
Chronic |
Decreased revenues due to changes in precipitation patterns and extreme variability in weather patterns leading to agricultural supply chain disruption and reduced production capacity* | 1.5ºC |
![]() |
![]() |
![]() | |||||||
|
>3-4ºC |
|
![]() |
![]() |
![]() |
BAT Annual Report and Form 20-F 2021 |
![]() |
See our Group risk factor for climate change on page 321 and details of our risk management and internal control procedures on pages 124. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
further embedding climate-related considerations into our business and strategic decision making, financial planning, as well as governance and risk management frameworks; |
– |
continuing to identify opportunities to further strengthen our activities to manage and mitigate climate-related risks and build climate-change resilience; |
– |
continuing to work with our suppliers to enhance data relating to our Scope 3 emissions; |
– |
continuing to monitor ESG measures and drive performance across our comprehensive suite of objectives across all areas of ESG; |
– |
continuing to identify, assess, manage, and disclose climate-related risks and opportunities; |
– |
reviewing our metrics and targets to ensure they remain aligned with our strategy and risk management processes, and best practice guidelines; |
– |
enhancing our assessment of the transitional and physical climate risks and opportunities through further analysis; and |
– |
tailoring future disclosures, taking into account key government, investor, and other stakeholder frameworks and guidance. |
* |
Via the Science Based Targets Business Ambition for 1.5C Campaign. |
** |
Science Based Targets must represent reductions needed to restrict global warming to 1.5 degrees Celsius from pre-industrial levels. BAT had previously committed to Science Based Targets, aligned to a 2°C pathway, and has existing targets to become carbon neutral across its operations by 2030 and value chain by 2050. These will be realigned to the 1.5°C pathway (subject to SBTi verification) and accommodate net-zero criteria and definitions. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Ethos Our purpose is to build A Better Tomorrow TM by reducing the health impact of our business through offering a greater choice of enjoyable and less risky products for our consumers.A key driver to delivering this is our Ethos, which guides our culture and behaviours across the entire Group. Developed with significant input from our employees, it ensures an organisation that is future fit for sustainable growth. These five key principles – bold, fast, empowered, diverse, responsible – underpin how we deliver on both our purpose and our strategy. |
– |
Dream big – with innovative ideas |
– |
Make tough decisions quickly and proudly stand accountable for them |
– |
Resilient and fearless to compete |
– |
Speed matters. Set clear direction and move fast |
– |
Keep it simple. Focus on outcomes |
– |
Learn quickly and share learnings |
– |
Set the context for our teams and trust their expertise |
– |
Challenge each other. Once in agreement, we commit collectively |
– |
Collaborate and hold each other accountable to deliver |
– |
Take action to reduce the health impact of our business |
– |
Ensure the best quality products for our consumers, the best place to work for our people, and the best results for shareholders |
– |
Act with integrity, never compromising our standards and ethics |
– |
Value different perspectives |
– |
Build on each others’ ideas, knowledge and experiences |
– |
Challenge ourselves to be open-minded recognising unconscious bias |
![]() |
![]() ![]() Hae In Kim Director, Talent, Culture and Inclusion |
BAT Annual Report and Form 20-F 2021 |
![]() |
You can read about our Group risk factor related to talent on page 320 |
Employee retention In 2021, total voluntary turnover of management-grade employees was 1,236, representing 8.6% of our Group’s total management population. Voluntary turnover rate for all employees across our Group in 2021 was 9.1%. Diversity Representation of women on senior leadership teams was 24% in 2019, 27% in 2020 and 27% in 2021. |
Senior managers: Companies Act 2006 For the purposes of disclosure under Section 414C(8) of the Companies Act 2006, the Group had 181 male and 42 female senior managers as at 31 December 2021. Senior managers are defined here as the members of the Management Board (excluding the Executive Directors) and the Directors of the Group’s principal subsidiary undertakings. The principal subsidiary undertakings, as set out in the Financial Statements, represented approximately 66% of the Group’s employees and contributed over 89% of Group revenue and 100% of profit from operations in 2021. |
Total |
||||
Main Board |
7 |
|||
Global headquarters |
81 |
|||
Management level globally |
141 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Pillar 1 Driving ownership and accountability |
![]() Ensuring ownership of, and accountability for, our D&I strategy across all business areas and leadership teams is key to driving progress and achieving our 2025 ambitions. Our Director for Talent, Culture and Inclusion has overall responsibility for all employee and human resources matters, while our Management Board oversees the development and management of talent within the Group’s regions and functions. Our D&I governance structure ensures clear accountability for our business leaders and leadership teams for achieving our 2025 ambitions. This includes a D&I dashboard and quarterly reviews by our Management Board to ensure close monitoring of progress and plans. Diversity also remains fully embedded in our talent review processes and meetings across all levels of the Group. Our ‘Diversity Champions’ continue to be key in driving D&I initiatives throughout the organisation. Our ‘Mastering Inclusion’ training helps to further empower our people and increase their awareness. In 2021, more than 8,300 employees completed the training. We also launched a new D&I toolkit for all our managers in 2021, as well as LGBT+ and Race and Ethnicity Allyship Guides. |
Pillar 2 Building diverse talent pipelines |
![]() We focus on building diverse talent pipelines at all levels of the organisation through recruiting, developing and retaining the best diverse talent. In 2021, the proportion of women in management roles was 39% and 27% on senior leadership teams – we are committed to increase these by 2025 to 45% and 40%, respectively. To achieve this, we are focused on recruiting, developing and retaining the best female talent. In 2021, 47% of our external management-level recruits were women. Women also comprised 51% of our new graduate intake in 2021, helping to build a sustainable pipeline of future female leaders. We also provide a range of training, mentoring, coaching and sponsorship programmes to support women’s development. As well as striving for gender balance, we focus on diversity of nationalities and ethnicities. Our target is for at least a 50% spread of distinct nationalities in all our regional and functional leadership teams. We have 141 different nationalities, from a wide range of ethnic backgrounds, in management roles across the Group. ![]() |
Pillar 3 Creating enablers |
![]() To realise our diversity ambitions, we know we must have enablers in place that provide a supportive environment for people to thrive and realise their full potential. We provide women and diverse groups with an opportunity to connect, engage and share experiences, such as through our Women in BAT UK and our B-United LGBT+ communities. And our Parents@BAT programme continues to provide a range of benefits to support new parents working in all BAT businesses worldwide. In 2021, the return rate from parental leave was 95% for women and 99% for men.We work to continually raise awareness of diversity issues through campaigns and events that showcase best practice and provide platforms for role models to amplify their profiles across the Group. For example, each year, we celebrate events such as National Inclusion Week, International Women’s Day and International Day of Women and Girls in Science. Following a successful pilot in the UK in 2020, we launched our IGNITE programme in eight more countries in 2021. IGNITE focuses on supporting experienced professionals returning to the workplace after a career break. |
BAT Annual Report and Form 20-F 2021 |
1. |
The Board has taken account of the requirements of the UK Corporate Governance Code in its approach to engagement with the Group’s workforce. We define the Group’s workforce as comprising all Group company employees and individuals contracted directly to undertake permanent and temporary roles. |
– |
market and site visits by our Directors and Management Board members to meet local employees; |
– |
town halls and listening sessions; |
– |
meetings with works councils, trade unions and the European Employee Council; |
– |
global, functional and regional webcasts, and webcasts and podcasts with the Chief Executive and Management Board members; |
– |
our global ‘Your Voice’ employee survey every two years, most recently in 2021; |
– |
our annual global leaders meeting with the top 120 senior leaders across the Group; and |
– |
global, independently-managed and multilingual Speak Up channels, discussed further on page 57. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Find details of our Directors’ Remuneration Policy on pages 152-165 |
![]() |
Find out more, including our statutory UK gender pay gap data, in our 2021 Diversity and Inclusion Report, available at www.bat.com/genderpayreport |
Our policies and principles |
||||
Summary of areas covered |
Stakeholder groups | |||
Employment Principles |
Employment practices, including commitments to diversity, reasonable working hours, family-friendly policies, employee wellbeing, talent, performance, equal opportunities, and fair, clear and competitive remuneration and benefits and responsible restructuring. |
![]() | ||
Health and Safety Policy |
Health, safety and welfare of all employees, other members of our workforce and third-party personnel. |
![]() | ||
Standards of Business Conduct (SoBC) * |
Topics including respect in the workplace: promoting equality and diversity; preventing harassment and bullying; fair wages and benefits; and supporting work-life balance; as well as human rights, health, safety, welfare and compliance with our Group Data Privacy Procedures. |
![]() | ||
Group Data Privacy Procedure |
The manner in which BAT processes personal data about all individuals, including consumers, employees, contractors and employees of suppliers. |
![]() |
* |
These policies and principles are endorsed by our Board, are adopted by all Group companies and support the effective identification, management and mitigation of risks and issues for our business in these and other areas. Available at bat.com/principles. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
New Categories revenue growth and strong pricing in combustibles offset by currency headwinds, with revenue down 0.4%; |
– |
Profit from operations was up 2.7%. On an adjusted, constant currency basis, profit from operations grew 5.2%, despite a further incremental increase in New Category investment; |
– |
Diluted EPS up 6.0%. Adjusted diluted EPS up 6.6% at constant rates of exchange; |
– |
Deleveraging continued, driven by strong cash generation; |
– |
Dividend per share up 1.0% at 217.8p; and |
– |
Share repurchase programme of £2 billion announced for 2022. |
2021 |
2020 |
2019 |
||||||||||||||||||
£m |
Change % (vs 2020) |
£m |
Change % (vs 2019) |
£m |
||||||||||||||||
Revenue |
25,684 |
-0.4% |
25,776 |
-0.4% |
25,877 |
|||||||||||||||
Adjusting items |
– |
– |
– |
– |
(50 |
) | ||||||||||||||
Adjusted revenue |
25,684 |
-0.4% |
25,776 |
-0.2% |
25,827 |
|||||||||||||||
Impact of exchange |
1,877 |
894 |
||||||||||||||||||
Adjusted revenue at constant rates |
27,561 |
+6.9% |
26,670 |
+3.3% |
25,827 |
BAT Annual Report and Form 20-F 2021 |
– |
trademark amortisation and impairment (2021: £306 million; 2020: £339 million); |
– |
other litigation costs of £80 million (2020: £487 million) which in 2021 was in respect of other litigation costs of £54 million (2020: £87 million) including Engle progeny and the net charge from settlements in Turkey and South Korea (£26 million). 2020 also included a £400 million charge largely in respect of developments in cases regarding payment obligations under the state settlement agreements with Florida, Texas, Minnesota and Mississippi for brands previously sold to a third party; |
– |
restructuring and integration costs of £150 million (2020: £408 million) partly related to Quantum which will simplify the business and create a more efficient and agile organisation to support the growth of New Categories; |
– |
a credit, in 2021, of £59 million as an accrual related to the Reynolds American dissenting shareholders was released on successful conclusion of that complaint; |
– |
a credit, in 2021, of £35 million following the partial buy-out of the pension fund in the U.S.; and |
– |
charges in respect of the sale of the Group’s operations in Iran (£358 million) in 2021, largely in respect of the write-off of certain assets and the reclassification, from reserves to the income statement, of foreign exchange. |
2021 |
2020 |
|||||||||||||||||||||||||||||||
Reported £m |
Adjusting items £m |
Adjusted £m |
Impact of exchange £m |
Adjusted at CC £m |
Reported £m |
Adjusting items £m |
Adjusted £m |
|||||||||||||||||||||||||
Profit from operations |
||||||||||||||||||||||||||||||||
U.S. |
5,566 |
321 |
5,887 |
456 |
6,343 |
4,975 |
809 |
5,784 |
||||||||||||||||||||||||
APME |
1,287 |
430 |
1,717 |
116 |
1,833 |
1,472 |
381 |
1,853 |
||||||||||||||||||||||||
AmSSA |
1,496 |
94 |
1,590 |
98 |
1,688 |
1,553 |
65 |
1,618 |
||||||||||||||||||||||||
ENA |
1,885 |
71 |
1,956 |
132 |
2,088 |
1,962 |
148 |
2,110 |
||||||||||||||||||||||||
Total regions |
10,234 |
916 |
11,150 |
802 |
11,952 |
9,962 |
1,403 |
11,365 |
||||||||||||||||||||||||
Net finance (costs)/income |
(1,486 |
) |
55 |
(1,431 |
) |
(89 |
) |
(1,520 |
) |
(1,745 |
) |
153 |
(1,592 |
) | ||||||||||||||||||
Associates and joint ventures |
415 |
12 |
427 |
29 |
456 |
455 |
(13 |
) |
442 |
|||||||||||||||||||||||
Profit before tax |
9,163 |
983 |
10,146 |
742 |
10,888 |
8,672 |
1,543 |
10,215 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2020 |
2019 |
|||||||||||||||||||||||||||||||
Reported £m |
Adjusting items £m |
Adjusted £m |
Impact of exchange £m |
Adjusted at CC £m |
Reported £m |
Adjusting items £m |
Adjusted £m |
|||||||||||||||||||||||||
Profit from operations |
||||||||||||||||||||||||||||||||
U.S. |
4,975 |
809 |
5,784 |
32 |
5,816 |
4,410 |
626 |
5,036 |
||||||||||||||||||||||||
APME |
1,472 |
381 |
1,853 |
56 |
1,909 |
1,753 |
306 |
2,059 |
||||||||||||||||||||||||
AmSSA |
1,553 |
65 |
1,618 |
178 |
1,796 |
1,204 |
638 |
1,842 |
||||||||||||||||||||||||
ENA |
1,962 |
148 |
2,110 |
30 |
2,140 |
1,649 |
544 |
2,193 |
||||||||||||||||||||||||
Total regions |
9,962 |
1,403 |
11,365 |
296 |
11,661 |
9,016 |
2,114 |
11,130 |
||||||||||||||||||||||||
Net finance (costs)/income |
(1,745 |
) |
153 |
(1,592 |
) |
(20 |
) |
(1,612 |
) |
(1,602 |
) |
80 |
(1,522 |
) | ||||||||||||||||||
Associates and joint ventures |
455 |
(13 |
) |
442 |
26 |
468 |
498 |
(25 |
) |
473 |
||||||||||||||||||||||
Profit before tax |
8,672 |
1,543 |
10,215 |
302 |
10,517 |
7,912 |
2,169 |
10,081 |
BAT Annual Report and Form 20-F 2021 |
– |
complying with all applicable laws and regulations in countries in which we operate; |
– |
being open and transparent with tax authorities and operating to build mature professional relationships; |
– |
supporting the business strategy of the Group by undertaking efficient management of our tax affairs in line with the Group’s commercial activity; |
– |
transacting on an arm’s-length basis for exchanges of goods and services between companies within the Group; and |
– |
engaging in pro-active discussions with tax authorities on occasions of differing legal interpretation. |
Deferred tax asset/(liability) |
||||||||||||
2021 £m |
2020 £m |
2019 £m |
||||||||||
Opening balance |
(15,780 |
) |
(16,626 |
) |
(17,432 |
) | ||||||
Difference on exchange |
(148 |
) |
506 |
680 |
||||||||
Changes in tax rates |
158 |
133 |
47 |
|||||||||
Other credits/(charges) to the income statement |
29 |
184 |
(55 |
) | ||||||||
Other (charges)/credits to other comprehensive income |
(110 |
) |
23 |
138 |
||||||||
Other movements |
– |
– |
(4 |
) | ||||||||
Closing balance |
(15,851 |
) |
(15,780 |
) |
(16,626 |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
The discussion of 2019 results that are not necessary to an understanding of the Group’s financial condition, changes in financial condition and results of operations is excluded from this Financial Review in accordance with applicable US Securities laws. Discussion of such 2019 metrics is contained in the Group’s Annual Report on Form 20-F 2020, which is available at bat.com/annualreport and has been filed with the SEC. Information contained in pages 34 to 42, pages 65 to the first column on page 72 and from the heading ‘Retirement benefit schemes’ on page 72 to page 73 of the Annual Report on Form 20-F 2020 are accordingly incorporated by reference into this Annual Report on Form 20-F 2021 only to the extent such information pertains to the Group’s financial condition and results of operations for the fiscal year ended 31 December 2019. |
BAT Annual Report and Form 20-F 2021 |
* |
A credit rating is not a recommendation to buy, sell or hold securities. A credit rating may be subject to withdrawal or revision at any time. Each rating should be evaluated separately of any other rating. |
– |
dividends (2021: £4.9 billion; 2020: £4.8 billion); |
– |
capital expenditure (2021: £0.6 billion; 2020: £0.6 billion); |
– |
MSA in the U.S. (2021: £2.7 billion; 2020: £2.2 billion); |
– |
refinancing obligations; |
– |
share repurchase programme, as announced for 2022 (£2 billion); and |
– |
other corporate activity such as litigation or acquisitions as relevant. |
– |
€ 650 million, £500 million, € 1.1 billion, CHF 400 million and € 500 million bonds at maturity; and |
– |
the £1,929 million term loan that had a maturity date in January 2022. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
|
– |
dividend payments (2021: £4,904 million, up 3.4%; 2020: £4,745 million, up 3.2%, with the growth in both years driven by the higher dividend per share); and |
– |
the net repayment of borrowings (2021: £3,865 million; 2020: £807 million) partly offset by the issuance of the hybrid bonds (£1,685 million in 2021). |
Summary cash flow |
||||||||||||
2021 £m |
2020 £m |
2019 £m |
||||||||||
Cash generated from operations |
11,678 |
11,567 |
10,948 |
|||||||||
Dividends received from associates |
353 |
351 |
252 |
|||||||||
Tax paid |
(2,314 |
) |
(2,132 |
) |
(2,204 |
) | ||||||
Net cash generated from operating activities |
9,717 |
9,786 |
8,996 |
|||||||||
Net cash used in investing activities |
(1,140 |
) |
(783 |
) |
(639 |
) | ||||||
Net cash used in financing activities |
(8,749 |
) |
(7,897 |
) |
(8,593 |
) | ||||||
Differences on exchange |
(253 |
) |
(253 |
) |
(57 |
) | ||||||
(Decrease)/increase in net cash and cash equivalents |
(425 |
) |
853 |
(293 |
) |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
review of asset values, including goodwill and impairment testing; |
– |
estimation and accounting for retirement benefit costs; and |
– |
estimation of provisions, including as related to taxation and legal matters. |
– |
identification and quantification of adjusting items; |
– |
determination as to whether to recognise provisions and the exposures to contingent liabilities related to pending litigation or other outstanding claims; |
– |
determination as to whether control (subsidiaries), joint control (joint arrangements), or significant influence (associates) exist in relation to investments held by the Group; |
– |
review of applicable exchange rates for transactions with and translation of entities in territories where there are restrictions on the free access to foreign currency or multiple exchange rates; and |
– |
the determination as to whether perpetual hybrid bonds should be classified as equity instead of borrowings. |
Foreign exchange rates |
||||||||||||||||||||||||
Average |
Closing |
|||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 |
2020 |
2019 |
|||||||||||||||||||
Australian dollar |
1.832 |
1.862 |
1.836 |
1.863 |
1.771 |
1.885 |
||||||||||||||||||
Brazilian real |
7.421 |
6.616 |
5.035 |
7.544 |
7.100 |
5.329 |
||||||||||||||||||
Canadian dollar |
1.724 |
1.720 |
1.694 |
1.711 |
1.741 |
1.718 |
||||||||||||||||||
Euro |
1.164 |
1.125 |
1.140 |
1.191 |
1.117 |
1.180 |
||||||||||||||||||
Indian rupee |
101.702 |
95.097 |
89.898 |
100.684 |
99.880 |
94.558 |
||||||||||||||||||
Japanese yen |
151.124 |
137.017 |
139.234 |
155.972 |
141.131 |
143.967 |
||||||||||||||||||
Russian rouble |
101.388 |
92.844 |
82.623 |
101.592 |
101.106 |
82.282 |
||||||||||||||||||
South African rand |
20.335 |
21.099 |
18.437 |
21.617 |
20.079 |
18.525 |
||||||||||||||||||
US dollar |
1.376 |
1.284 |
1.277 |
1.354 |
1.367 |
1.325 |
BAT Annual Report and Form 20-F 2021 |
![]() |
![]() leadership and strong pricing, we are delivering value across our portfolio ![]() Guy Meldrum President and CEO (Reynolds American Inc.) |
Volume |
||||||||||||||||||||
2021 units |
vs 2020 % |
2020 units |
vs 2019 % |
2019 units |
||||||||||||||||
Cigarettes (bn sticks) |
70 |
-5.0% |
73 |
+0.5% |
73 |
|||||||||||||||
Other (bn sticks eq)* |
– |
– |
– |
– |
– |
|||||||||||||||
Combustibles (bn sticks) |
70 |
-5.0% |
73 |
+0.5% |
73 |
|||||||||||||||
New Categories: |
||||||||||||||||||||
Vapour (mn 10ml/pods) |
291 |
+66.7% |
174 |
+69.7% |
103 |
|||||||||||||||
THP (bn sticks) |
– |
– |
– |
– |
– |
|||||||||||||||
Modern Oral (mn pouches) |
602 |
+272% |
162 |
+45.0% |
112 |
|||||||||||||||
Traditional Oral (bn sticks eq) |
7 |
-5.1% |
8 |
-1.3% |
8 |
* |
Other includes MYO/RYO. |
Revenue |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Combustibles |
10,015 |
+0.9% |
+8.1% |
9,926 |
+9.3% |
+9.9% |
||||||||||||||||||
New Categories: |
||||||||||||||||||||||||
Vapour |
561 |
+46.4% |
+56.9% |
383 |
+85.1% |
+86.1% |
||||||||||||||||||
THP |
1 |
-21.8% |
-16.2% |
1 |
+0.0% |
+0.5% |
||||||||||||||||||
Modern Oral |
2 |
-81.5% |
-80.1% |
10 |
+13.5% |
+14.1% |
||||||||||||||||||
Total New Categories |
564 |
+43.0% |
+53.3% |
394 |
+81.9% |
+82.9% |
||||||||||||||||||
Traditional Oral |
1,077 |
-4.3% |
+2.6% |
1,126 |
+7.0% |
+7.6% |
||||||||||||||||||
Other |
35 |
+26.9% |
+36.0% |
27 |
+4.6% |
+5.1% |
||||||||||||||||||
Revenue |
11,691 |
+1.9% |
+9.2% |
11,473 |
+10.6% |
+11.2% |
Profit from operations/Operating margin |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Profit from operations |
5,566 |
+11.9% |
+9.7% |
4,975 |
+12.8% |
+15.5% |
||||||||||||||||||
Operating margin (%) |
47.6% |
+420 bps |
+20 bps |
43.4% |
+90 bps |
+190bps |
![]() |
+60 bps Cigarette value share change 4,405 Number of employees |
7 Owned manufacturing (inc R&D) sites | ||
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
† |
Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance. |
BAT Annual Report and Form 20-F 2021 |
![]() |
![]() Canada demonstrates our resilience in a challenging environment ![]() Luciano Comin Regional Director | |
Volume |
||||||||||||||||||||
2021 units |
vs 2020 % |
2020 units |
vs 2019 % |
2019 units |
||||||||||||||||
Cigarettes (bn sticks) |
147 |
+0.1% |
147 |
-3.9% |
152 |
|||||||||||||||
Other (bn sticks eq)* |
1 |
-7.7% |
2 |
-1.7% |
2 |
|||||||||||||||
Combustibles (bn sticks) |
148 |
0.0% |
149 |
-3.8% |
154 |
|||||||||||||||
New Categories: |
||||||||||||||||||||
Vapour (mn 10ml/pods) |
62 |
+102% |
31 |
+118% |
14 |
|||||||||||||||
THP (bn sticks) |
– |
– |
– |
– |
– |
|||||||||||||||
Modern Oral (mn pouches) |
– |
-100% |
19 |
+142% |
8 |
|||||||||||||||
Traditional Oral (bn sticks eq) |
– |
– |
– |
– |
– |
* |
Other includes MYO/RYO. |
Revenue |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Combustibles |
3,435 |
-2.8% |
+4.1% |
3,535 |
-11.4% |
+1.3% |
||||||||||||||||||
New Categories: |
||||||||||||||||||||||||
Vapour |
141 |
+115% |
+115% |
65 |
+52.8% |
+58.6% |
||||||||||||||||||
THP |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
Modern Oral |
– |
-100% |
-100% |
1 |
-49.8% |
-47.3% |
||||||||||||||||||
Total New Categories |
141 |
+114% |
+114% |
66 |
+51.3% |
+57.1% |
||||||||||||||||||
Traditional Oral |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
Other |
225 |
+32.3% |
+44.7% |
171 |
-24.3% |
-7.2% |
||||||||||||||||||
Revenue |
3,801 |
+0.8% |
+7.8% |
3,772 |
-11.5% |
+1.4% |
Profit from operations/Operating margin |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Profit from operations |
1,496 |
-3.7% |
+4.3% |
1,553 |
+29.0% |
-2.5% |
||||||||||||||||||
Operating margin (%) |
39.3% |
-190 bps |
-140 bps |
41.2% |
+1,290bps |
-160 bps |
Revenue by category |
||||||
![]() |
-70 bps Cigarette value share change 15,565 Number of employees |
27 Owned manufacturing (inc R&D) sites | ||||
Key markets Argentina, Brazil, Canada, Chile, Colombia, Mexico, Nigeria, South Africa |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
BAT Annual Report and Form 20-F 2021 |
![]() |
![]() category approach is delivering excellent results ![]() Johan Vandermeulen Regional Director | |
Volume |
||||||||||||||||||||
2021 units |
vs 2020 % |
2020 units |
vs 2019 % |
2019 units |
||||||||||||||||
Cigarettes (bn sticks) |
214 |
-2.7% |
220 |
-4.2% |
230 |
|||||||||||||||
Other (bn sticks eq)* |
15 |
-8.7% |
16 |
-2.5% |
17 |
|||||||||||||||
Combustibles (bn sticks) |
229 |
-3.1% |
236 |
-4.1% |
247 |
|||||||||||||||
New Categories: |
||||||||||||||||||||
Vapour (mn 10ml/pods) |
173 |
+29.8% |
133 |
+23.0% |
108 |
|||||||||||||||
THP (bn sticks) |
9.8 |
+195% |
3.3 |
+203% |
1.1 |
|||||||||||||||
Modern Oral (mn pouches) |
2,440 |
+46.4% |
1,667 |
+55.6% |
1,071 |
|||||||||||||||
Traditional Oral (bn sticks eq) |
1 |
+6.1% |
1 |
+2.8% |
1 |
* |
Other combustibles includes MYO/RYO. |
Revenue |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Combustibles |
5,024 |
-6.2% |
+1.1% |
5,356 |
-3.4% |
+0.5% |
||||||||||||||||||
New Categories: |
||||||||||||||||||||||||
Vapour |
207 |
+40.2% |
+43.8% |
148 |
+0.4% |
+0.2% |
||||||||||||||||||
THP |
341 |
+150% |
+167% |
136 |
+143% |
+159% |
||||||||||||||||||
Modern Oral |
266 |
+43.9% |
+45.6% |
185 |
+58.5% |
+59.3% |
||||||||||||||||||
Total New Categories |
814 |
+73.6% |
+80.3% |
469 |
+46.7% |
+49.6% |
||||||||||||||||||
Traditional Oral |
41 |
+18.2% |
+18.1% |
34 |
+16.2% |
+14.2% |
||||||||||||||||||
Other |
122 |
-8.9% |
-4.9% |
135 |
-31.6% |
-31.7% |
||||||||||||||||||
Revenue |
6,001 |
+0.1% |
+7.3% |
5,994 |
-1.6% |
+2.1% |
Profit from operations/Operating margin |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Profit from operations |
1,885 |
-3.9% |
-1.0% |
1,962 |
+19.0% |
-2.4% |
||||||||||||||||||
Operating margin (%) |
31.4% |
-130 bps |
-270 bps |
32.7% |
+560 bps |
-160 bps |
Revenue by category |
||||||
![]() |
-20 bps Cigarette value share change 22,333 Number of employees |
20 Owned manufacturing (inc R&D) sites |
Key markets Algeria, Belgium, Bulgaria, Czech Republic, Denmark, Egypt, France, Germany, Italy, Kazakhstan, Morocco, Netherlands, Poland, Romania, Russia, Spain, Sweden, Switzerland, Turkey, Ukraine, UK |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
Russia, reaching 19.3% up 1,070 bps on 2020; |
– |
Italy, increasing by 870 bps to 12.8%; |
– |
Ukraine, being 20.9%, an increase of 990 bps; and |
– |
Romania, 530 bps higher than 2020 at 22.1%. |
From 1 January 2022, the markets of North Africa (being Algeria, Egypt, Libya, Morocco, Sudan and Tunisia) will be reported under APME. From that date, ENA will be known as Europe. |
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
BAT Annual Report and Form 20-F 2021 |
![]() |
![]() to grow despite difficult trading conditions in key markets. ![]() | |
Michael (Mihovil) Dijanosic Regional Director |
Volume |
||||||||||||||||||||
2021 units |
vs 2020 % |
2020 units |
vs 2019 % |
2019 units |
||||||||||||||||
Cigarettes (bn sticks) |
206 |
+4.6% |
198 |
-7.3% |
213 |
|||||||||||||||
Other (bn sticks eq)* |
2 |
-14.1% |
2 |
+3.3% |
2 |
|||||||||||||||
Combustibles (bn sticks) |
208 |
+4.4% |
200 |
-7.2% |
215 |
|||||||||||||||
New Categories: |
||||||||||||||||||||
Vapour (mn 10ml/pods) |
9 |
+65.6% |
6 |
+385% |
1 |
|||||||||||||||
THP (bn sticks) |
9 |
+26.5% |
7 |
-6.5% |
8 |
|||||||||||||||
Modern Oral (mn pouches) |
254 |
+197% |
86 |
n/m |
3 |
|||||||||||||||
Traditional Oral (bn sticks eq) |
– |
– |
– |
– |
– |
* |
Other combustibles includes MYO/RYO. |
Revenue |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Combustibles |
3,555 |
-9.6% |
-2.3% |
3,935 |
-10.3% |
-7.7% |
||||||||||||||||||
New Categories: |
||||||||||||||||||||||||
Vapour |
18 |
+26.0% |
+27.5% |
15 |
+255% |
+260% |
||||||||||||||||||
THP |
511 |
+2.8% |
+13.0% |
497 |
-26.0% |
-27.1% |
||||||||||||||||||
Modern Oral |
6 |
+179% |
+199% |
2 |
n/m |
n/m |
||||||||||||||||||
Total New Categories |
535 |
+4.2% |
+14.2% |
514 |
-24.0% |
-25.0% |
||||||||||||||||||
Traditional Oral |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
Other |
101 |
+13.0% |
+20.1% |
88 |
-1.3% |
-0.4% |
||||||||||||||||||
Revenue |
4,191 |
-7.6% |
0.0% |
4,537 |
-11.9% |
-9.9% |
Profit from operations/Operating margin |
||||||||||||||||||||||||
2021 £m |
vs 2020 % |
vs 2020 (adj at cc) % |
2020 £m |
vs 2019 % |
vs 2019 (adj at cc) % |
|||||||||||||||||||
Profit from operations |
1,287 |
-12.6% |
-1.1% |
1,472 |
-16.0% |
-7.3% |
||||||||||||||||||
Operating margin (%) |
30.7% |
-170 bps |
-40 bps |
32.4% |
-160 bps |
+110 bps |
Revenue by category |
||||
![]() |
-20 bps Cigarette value share change 9,747 Number of employees |
21 Owned manufacturing (inc R&D) sites |
Key markets Australia, Bangladesh, Indonesia, Japan, Malaysia, Middle East (inc KSA), New Zealand, Pakistan, South Korea, Taiwan, Vietnam |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
* |
Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
![]() |
Please refer to pages 325 to 327 for details of tobacco and nicotine regulatory regimes under which the Group’s businesses operate. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Please refer to note 31 in the Notes on the Accounts for details of contingent liabilities applicable to the Group. |
BAT Annual Report and Form 20-F 2021 |
![]() |
Please refer to note 31 in the Notes on the Accounts for details of contingent liabilities applicable to the Group. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
The Strategic Report was approved by the Board of Directors on 10 February 2022 and signed on its behalf by Paul McCrory, Company Secretary. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Principle |
||
A. Long-Term Sustainable Success |
pages 2 to 91, 98 to 115 | |
B. Purpose, Values and Culture |
pages 2 to 27, 68 to 73, 98, 103 to 105, 114 to 115 | |
C. Resources and Control Framework |
pages 4 to 18, 92 to 97, 103, 120 to 127 | |
D. Shareholder and Stakeholder Engagement |
pages 20, 21, 72, 106 to 110, 128 | |
E. Workforce Engagement, Policies, Practices |
pages 57, 70 to 73, 103, 108, | |
163 to 165 |
Principle |
||
F. Leadership of the Board |
pages 98 to 115 | |
G. Board Composition and Division of Responsibilities |
pages 100, 101, 112, 113 | |
H. Role and Commitment of Non-Executive Directors |
pages 112 to 113 | |
I. Board Support |
pages 98, 112 to 114 |
Principle |
||
J. Board Appointments, Succession and Diversity |
pages 98, 105, 116 to 119 | |
K. Board Skills and Experience |
pages 100 to 101, 116 to 119 | |
L. Board Evaluation |
pages 114 to 115 |
Principle |
||
M. Internal and External Audit Functions |
pages 123 to 126 | |
N. Fair, Balanced and Understandable Assessment |
pages 126 and 166 | |
O. Risk Management and Internal Controls |
pages 92 to 97, 105, 120 to 127 |
Principle |
||
P. Remuneration Policies and Practices |
pages 128 to 165 | |
Q. Development of Policy on Remuneration |
pages 128 to 165 | |
R. Judgement and Discretion |
pages 128 to 165 |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Audit Committee | |
![]() |
Nominations Committee | |
![]() |
Remuneration Committee | |
![]() |
Committee Chairman | |
![]() |
Executive Director | |
![]() |
Non-Executive Director |
Attendance at Board meetings in 2021 1 |
||||||||||||||||
Attended/Eligible to attend |
||||||||||||||||
Name |
Director since |
Scheduled |
4 |
Ad hoc |
||||||||||||
Luc Jobin |
2017 |
6/6 |
2/2 |
|||||||||||||
Jack Bowles |
2019 |
6/6 |
2/2 |
|||||||||||||
Tadeu Marroco |
2019 |
6/6 |
2/2 |
|||||||||||||
Sue Farr |
2015 |
6/6 |
2/2 |
|||||||||||||
Karen Guerra |
2020 |
6/6 |
2/2 |
|||||||||||||
Dr Marion Helmes |
2016 |
6/6 |
2/2 |
|||||||||||||
Holly Keller Koeppel |
2017 |
6/6 |
2/2 |
|||||||||||||
Savio Kwan |
2014 |
6/6 |
2/2 |
|||||||||||||
Dimitri Panayotopoulos 2 |
2015 |
6/6 |
1/2 |
|||||||||||||
Darrell Thomas |
2020 |
6/6 |
2/2 |
|||||||||||||
Richard Burrows 3(a) |
2009-2021 |
2/2 |
2/2 |
|||||||||||||
Jerry Fowden 3(b) |
2019-2021 |
1/1 |
2/2 |
1. |
Number of meetings in 2021: The Board held eight meetings in 2021, two of which were ad hoc and convened at short notice, to review Board Committee and Management Board appointments. |
2. |
Dimitri Panayotopoulos did not attend the ad hoc meeting in March due to prior commitments. Directors that are unable to attend Board or Committee meetings have the opportunity to provide their comments to the Chairman in advance of the meeting. |
3. |
Composition: The Board of Directors is shown as at the date of this Annual Report and Form 20-F; (a) Richard Burrows retired as Chairman at the conclusion of the Company’s Annual General Meeting on 28 April 2021; and (b) Jerry Fowden stepped down from the Board with effect from 1 April 2021. |
4. |
Number of meetings in 2022: Six Board meetings are scheduled for 2022. |
BAT Annual Report and Form 20-F 2021 |
![]() |
![]() |
![]() |
![]() | |||
![]() |
Nationality: |
Nationality: |
Nationality: | |||
Jerry was appointed Director, Legal & External Affairs and General Counsel in May 2015, having joined the Management Board as Group Corporate & Regulatory Affairs Director in January 2015. Jerry was Regional General Counsel, Asia- Pacific from 2010 to 2014, before becoming Assistant General Counsel – Corporate & Commercial. He was a member of the Board of Reynolds American Inc. from February 2016 until July 2017. |
Marina joined the Management Board as Director, Digital and Information in January 2019. She joined the Group as Chief Information Officer (CIO) in 2018, having previously served as Global CIO and Global Business Services SVP at Anheuser-Busch InBev, where she was responsible for information technology transformation, including consumer digital marketing. |
Luciano joined the Management Board as Regional Director, Americas and Sub-Saharan Africa in January 2019. He joined the Group in 1992 and has held a wide range of roles, including Marketing Director in Venezuela, Marketing Director in Mexico and General Manager of BAT Mexico. Luciano was also Regional Marketing Manager for Western Europe and then Regional Head of Marketing, Americas and Sub-Saharan Africa before his appointment to the Management Board. | ||||
![]() |
![]() |
![]() |
![]() | |||
Nationality: |
Nationality: |
Nationality: |
Nationality: | |||
Michael was appointed Regional Director for Asia-Pacific and Middle East in September 2020 and joined the Management Board at the same time. Previously, he was Area Director for Asia-Pacific and Global Travel Retail. Michael joined BAT in 1999 and has held several senior roles in the Group including General Manager (Papua New Guinea and Cambodia) and Regional Manager, Asia-Pacific. |
Zafar was appointed Director, Operations in February 2021 and became a member of the Management Board at the same time. Previously, he was Group Head of New Categories Operations where he was responsible for successfully embedding an end-to-end supply chain for our New Category products to support their accelerated growth across the world. Zafar joined BAT in 1996 and has held several senior roles in the Group including Regional Head of Operations Asia Pacific & Middle East, Group Head of Plan, Service & Logistics, Regional Head of Plan and Service for Western Europe and Head of Operations, Bangladesh. |
Hae In joined the Management Board as Director, Talent and Culture Designate in January 2019 and became Director, Talent and Culture in April 2019. Her role title changed to Director, Talent, Culture and Inclusion in November 2020. She was previously Group Head of Talent and Organisational Effectiveness and has held several other senior HR roles in the Group, including Regional HR Director, Asia-Pacific, and HR Director, Japan and North Asia. Prior to joining the Group in 2008, she gained experience at Samsung, IBM Consulting Services and PricewaterhouseCoopers. |
Paul joined the Management Board as Director, New Categories in January 2019. He has been with the Group for 14 years in various senior roles, including Regional Marketing Manager, Asia-Pacific and Middle East, Area Director, East Asia and Global Head of Marketing Futures. | |||
![]() |
![]() |
![]() |
![]() | |||
Nationality: |
Nationality: |
Nationality: |
Nationality: | |||
Guy was appointed President and CEO of Reynolds American Inc. in September 2020, having joined the Management Board as Regional Director, Asia-Pacific and Middle East in January 2019. Previously he was Area Director, Australasia Area. Guy joined the Group in 1993 and has held several senior roles in the Group including Area Director, North Asia Area and Marketing Director, Russia. |
David was appointed Director, Research and Science in January 2019, having joined the Management Board as Group Scientific Director in 2012, leading R&D’s focus on potentially reduced-risk products. He has been with the Group for more than 20 years and was previously Head of International Public Health and Scientific Affairs, responsible for engagement with scientific, medical and public health communities. |
Johan was appointed Regional Director, Europe and North Africa in January 2019. From 1 January 2022, his role title is Regional Director, Europe. Johan joined the Management Board in 2014 as Regional Director for Eastern Europe, Middle East and Africa, then became Regional Director, Asia-Pacific and Middle East in January 2018. He has been with the Group for more than 25 years and his previous roles include General Manager in Russia, General Manager in Turkey and Global Brand Director for the Kent brand. |
Kingsley was appointed Chief Marketing Officer in January 2019. He joined the Group in 1996 and held various senior marketing positions prior to being General Manager in Russia. He was appointed to the Management Board as Corporate and Regulatory Affairs Director in 2012. In January 2015, he was appointed Managing Director, Next Generation Products and then as Regional Director, Americas and Sub-Saharan Africa in January 2018. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Read more about our purpose on page 27 and our ethos on page 69 |
![]() |
Read more about our commitment to delivery with integrity and our Group Standards of Business Conduct on pages 56 to 57 |
BAT Annual Report and Form 20-F 2021 |
![]() |
Simplify the Business |
![]() |
Step Change in New Categories Performance |
![]() |
Drive Value From Combustibles | |||||
The Board understands our business is enabled by simplifying our structures, embracing digital transformation, and rigorous cost management. |
Continued investment and development of New Categories to accelerate growth is a strategic focus of the Board’s agenda. |
Driving value from combustibles is a core priority for the Board, to deliver today and build A Better Tomorrow TM . |
– |
reviewing Quantum implementation (part of Quest), including: effectiveness of Phase 1 organisational design and business unit simplification; impact of Phase 2 end market operating model and route-to-market optimisation; and progress in implementing Phase 3 UK head office restructuring; |
– |
oversight of progress against target savings to be realised through efficiencies implemented under Quantum to release funds for investment; |
– |
oversight of initiatives to drive a step-change in portfolio complexity reduction, including drive brand portfolio consolidation and stock-keeping unit rationalisation, as part of the Group’s focus on stronger, global brands; |
– |
reviewing revenue growth management capabilities and use of data and analytics to power insights and enhance forecasting and decision-making; and |
– |
reviewing key aspects of digital transformation to deliver enhanced user experience for consumers and customers, leverage Digital Business Solutions technology hubs to increase efficiencies, and cyber security developments. |
– |
reviewing Group performance against strategy to accelerate New Categories growth and KPIs, including New Categories revenue growth and market share; |
– |
reviewing industry and Group performance outlook in total nicotine and by product portfolio; |
– |
reviewing consumer adoption, trading environment and competitor landscape across New Categories portfolios; |
– |
reviewing our New Categories investment glidepath and innovation pipeline across all product portfolios; |
– |
reviewing the Group’s New Categories supply chain, its resilience, sourcing footprint and risk mitigation strategies (including in response to COVID-19); |
– |
reviewing regulatory landscapes in New Categories across key markets, with particular focus on the U.S. and EU; |
– |
overseeing the development of strategic opportunities beyond nicotine, including Btomorrow Ventures’ portfolio investments and the Group’s acquisition of a 19.9% investment in Organigram Holdings Inc.; and |
– |
assessing principles for laying foundations in wellbeing and stimulation. |
– |
reviewing Group performance against strategy to drive value from combustibles and KPIs, including value share growth; |
– |
reviewing industry outlook, trading environment and competitor landscape; |
– |
understanding the impact of growth in illicit trade, particularly in developing markets; |
– |
assessing the continuing impact of COVID-19 in highly impacted markets (such as South Africa and Brazil); |
– |
reviewing the impact of evolving tax regimes, with focus on excise tax developments in the U.S. and Asia-Pacific; |
– |
assessing principles applied to prioritise development and investment in our brand portfolio to generate sustainable value to fund New Categories development; and |
– |
reviewing combustible product portfolios, product development pipelines and developments in blending and product differentiation across the Group’s drive brand portfolio, emphasising innovation that is consumer relevant whilst reducing environmental impact. |
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Read more about our Quest programme and capability accelerators on pages 30 to 31 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
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Financial and Risk |
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Environmental Social, Governance |
![]() |
Ethos, Culture, People | |||||
The Board pays close attention to Group performance and financial matters, internal control, and integrity of reporting and risk management. |
The Board emphasises that our strategy, business, and product portfolio be sustainable for the long term and meet our evolving societal responsibilities. |
The Board shapes and oversees the Group’s culture and ethos. Setting the ‘tone from the top’ is an important part of the Board’s role. |
Activities |
in 2021 |
– |
approval of Group budget, consideration of capital allocation priorities, and oversight of resource allocation activities, to support strategy execution; |
– |
reviewing Group financial performance against key performance metrics, current outlook, challenges and opportunities for growth in each region, and FX impacts; |
– |
reviewing Group half-year results, trading updates, year-end results and the Annual Report and Form 20-F; |
– |
reviewing share price performance and investor and broker perspectives; |
– |
review of interim dividend proposals and assessment of distributable reserves of the Company prior to dividend payments; |
– |
determining Group viability, taking into account current position and principal risks; |
– |
reviewing compliance with Group financing principles, including liquidity, capital allocation and net debt/EBITDA; |
– |
reviewing the Group’s revolving credit facilities, refinancings, the Euro hybrid bond issuance, and debt issuance programmes; |
– |
reviewing Group cash flow performance and opportunities to optimise the balance sheet to enable investment, while reducing the carrying value of debt; |
– |
reviewing the appropriate level of authority to allot shares to maintain future flexibility for the Company; |
– |
reviewing the Group risk register, and risk appetite in the context of strategic objectives and emerging risks; |
– |
reviewing evolving global product regulation, including U.S. FDA regulation of menthol and flavours and evolving EU product and excise regulation; |
– |
reviewing status of litigation involving Group companies, including updates on the Canadian Companies’ Creditors Arrangement Act (CCAA) process in relation to Imperial Tobacco Canada; |
– |
reviewing Group insurance coverage; and |
– |
reviewing financial performance of associates of the Group periodically. |
Activities |
in 2021 |
– |
oversight of climate-related issues and opportunities for the Group and the approach to embedding the elements of the TCFD framework across the Group; |
– |
reviewing environmental performance for the preceding year and progress against glidepaths towards achieving the Group’s environmental targets, including in relation to climate, renewable energy, water stewardship and recycling; |
– |
reviewing the Group’s ESG agenda, factors contributing to its increasing importance to key stakeholders, performance against ESG metrics and associated governance and controls; |
– |
approving revised terms of reference for the Audit Committee to include responsibilities for engagement and monitoring of external providers conducting assurance over ESG metrics; |
– |
reviewing the perspectives of the Group’s key stakeholders, the Group’s response to stakeholder perspectives, and the effectiveness of engagement mechanisms used; |
– |
assessing the impact of COVID-19 on Group operations, and Group business continuity structures and plans to manage the Group’s response; |
– |
approving revisions to the Group’s Standards of Business Conduct and Supplier Code of Conduct, to take effect from 1 January 2022; |
– |
approving the annual Modern Slavery Act statement and annual Conflict Minerals Report; and |
– |
reviewing updates on compliance matters, including allegations of misconduct, reports from Speak Up channels and investigations, and the Group’s Delivery with Integrity programme initiatives. |
Activities |
in 2021 |
– |
determining the independence of Non-Executive Directors prior to proposing them for re-appointment at the Company’s AGM; |
– |
revising the composition of the Audit and Remuneration Committees, on the recommendation of the Nominations Committee; |
– |
approving changes to Management Board composition, on the recommendation of the Nominations Committee; |
– |
reviewing proposed changes to the Directors’ Remuneration Policy, shareholder perspectives on new policy proposals, responses to shareholder engagement, and adopting the new Directors’ Remuneration Policy for shareholder approval at the 2022 AGM; |
– |
approving revisions to Non-Executive Director fees; |
– |
reviewing the outcomes of the annual Board evaluation in 2021; |
– |
monitoring corporate culture and its alignment with the Group’s purpose, ethos and strategy; |
– |
reviewing the Group’s talent strategy, employer brand, diversity and inclusion agenda, and progress against objectives; |
– |
reviewing approach to talent capability development, with a focus on capabilities needed for Group transformation; |
– |
considering feedback from the Group’s workforce engagement mechanisms; |
– |
reviewing the effectiveness of Speak Up channels; understanding the evolving impact of COVID-19 on the Group’s workforce and reviewing strategies for securing safe on-site environments, effective connectivity for remote working, and safeguarding welfare; |
– |
reviewing health and safety performance for the preceding year, targets for the coming year and action plans; and |
– |
reviewing the funding positions relating to the Group’s retirement benefit schemes. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
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For disclosures required by paragraph 7.2.6 of the Disclosure Guidance and Transparency Rules and the Companies Act 2006, see the Other Information section |
BAT Annual Report and Form 20-F 2021 |
UK Companies Act: Employee engagement This section summarises the Directors’ approach to engaging with the Group’s workforce, including employees of UK Group companies, and how the Directors have regard to their interests. Further information is provided on pages 20 to 21, 70 to 73, and pages 163 to 165 in relation to remuneration matters. Further details regarding the effect of that regard are provided on page 110. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
UK Companies Act: Business relationships This section summarises how the Directors have regard to the need to foster business relationships with customers, suppliers and other external stakeholders. Further information is provided on pages 20 to 21, Information regarding the effect of that regard is provided on page 110. |
BAT Annual Report and Form 20-F 2021 |
We define principal decisions as those decisions and discussions by the Board that are strategic or material to the Group and those of significance to any of our key stakeholders. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
The Board comprises the Non-Executive Chairman, two Executive Directors and seven independent Non-Executive Directors. |
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The responsibilities of the Chairman, Executive Directors and Senior Independent Director are available at bat.com | ||||
This section sets out the roles and division of responsibilities between the Chairman, Executive Directors and Non-Executive Directors. |
Role |
Responsibilities |
|||||
Chairman |
– Leadership of the Board and its overall effectiveness – Promotes constructive debate and effective decision-making |
– Sets the Board agenda – Facilitates Directors’ contributions – Interfaces with shareholders |
– Ensures effective shareholder engagement – Representational duties on behalf of the Company | |||
Chief Executive |
– Overall responsibility for Group performance – Leadership of the Group |
– Enables planning and execution of Group objectives and strategies – Stewardship of Group assets |
– Drives the cultural tone of the organisation | |||
Finance and Transformation Director |
– Leadership of the Group in respect of financial matters |
– Enables planning and execution of Group financial objectives and strategies |
– Leadership of the design and delivery of the Group’s QUEST transformation programme to accelerate delivery of Group strategy | |||
Senior Independent Director |
– Leads review of the Chairman’s performance – Presides at Board meetings in the Chairman’s absence |
– Chairs the Nominations Committee when Chairman succession considered – Sounding board for the Chairman |
– Intermediary for other Directors – Available to meet with shareholders | |||
Non-Executive Directors |
– Oversee Group strategy and resource allocation – Monitor Group performance and delivery of Group strategy – Oversee systems of control and risk management |
– Review management proposals and provide strategic guidance – Scrutinise and hold to account performance against objectives |
– Bring external judgement, perspective and effective challenge to management |
– |
The Non-Executive Directors, led by the Chairman, meet following Board meetings on a regular basis. Additional meetings led by the Chairman, and without the Executive Directors present, are scheduled in the Board calendar. |
– |
The Executive and the Non-Executive Directors also meet annually, led by the Senior Independent Director and without the Chairman present, to discuss the Chairman’s performance. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
Directors receive papers for review in good time ahead of each Board and Committee meeting. |
– |
Papers and presentations to the Board and its Committees include discussion of specific stakeholder considerations as applicable. |
– |
The Company Secretary ensures effective information flow within and between the Board and its Committees, and between the Non-Executive Directors and senior management. |
– |
The Company Secretary, in conjunction with external advisers where appropriate, advises the Board on all governance matters. |
– |
All Directors have access to the advice and services of the Company Secretary. The appointment and replacement of the Company Secretary is a matter for the Board. |
– |
A procedure is in place for all Directors to take independent professional advice at the Company’s expense if required. |
– |
Each Board Committee may obtain independent legal or other professional advice, at the Company’s expense, and secure attendance at meetings of external participants if needed. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
Plan for Non-Executive Director market and site visits. |
– |
More detail for the Board on the competitive landscape and consumer trends, with more time in the Board agenda for in-depth scenario analysis and planning. |
– |
Additional time to be allowed on the Board agenda for executive management succession planning. |
– |
Further emphasis in the Board agenda on change management in the context of the Group’s transformational agenda, including from a people perspective. |
– |
Additional pre-read material to be provided for key presentations to enable greater time for discussion in Board meetings. |
BAT Annual Report and Form 20-F 2021 |
Attended/Eligible to attend |
||||||||||||
Name |
Member since |
Scheduled |
Ad hoc |
|||||||||
Luc Jobin |
2017 |
2/2 |
4/4 |
|||||||||
Sue Farr |
2015 |
2/2 |
4/4 |
|||||||||
Karen Guerra |
2020 |
2/2 |
4/4 |
|||||||||
Dr Marion Helmes |
2016 |
2/2 |
4/4 |
|||||||||
Holly Keller Koeppel |
2017 |
2/2 |
4/4 |
|||||||||
Savio Kwan |
2014 |
2/2 |
4/4 |
|||||||||
Dimitri Panayotopoulos 1(b) |
2015 |
2/2 |
3/4 |
|||||||||
Darrell Thomas |
2020 |
2/2 |
4/4 |
|||||||||
Richard Burrows 2(b) |
2009 – 2021 |
1/1 |
2/2 |
|||||||||
Jerry Fowden 2(c) |
2019 – 2021 |
1/1 |
2/2 |
1. |
Number of meetings in 2021: (a) the Committee held six meetings, four of which were ad hoc; and (b) Dimitri Panayotopoulos did not attend the ad hoc meeting in March, which was convened at short notice, due to prior commitments. |
2. |
Membership: (a) all members of the Committee are independent Non-Executive Directors in accordance with UK Corporate Governance Code 2018 Provisions 10 and 17, applicable US federal securities laws and NYSE listing standards; (b) Richard Burrows ceased to be a member of the Committee on stepping down from the Board at the conclusion of the Company’s AGM on 28 April 2021; and (c) Jerry Fowden ceased to be member of the Committee on stepping down from the Board with effect from 1 April 2021. |
3. |
Other attendees: the Chief Executive, the Director, Talent, Culture & Inclusion, and Group Head of Talent & Organisation Effectiveness regularly attend meetings by invitation but are not members. |
– |
reviewing the structure, size and composition of the Board and Management Board on a regular basis to ensure both have an appropriate balance of skills, expertise, knowledge and, in relation to the Board, independence; |
– |
reviewing the succession plans for appointments to the Board, the Management Board and Company Secretary to maintain an appropriate balance of skills and experience and to ensure progressive refreshing of both the Board and the Management Board; |
– |
making recommendations to the Board on suitable candidates for appointments to the Board, the Management Board and Company Secretary, ensuring that the procedure for those appointments is rigorous, transparent, objective and merit-based and has regard for diversity; |
– |
assessing the time needed to fulfil the roles of Chairman, Senior Independent Director and Non-Executive Director, and ensuring Non-Executive Directors have sufficient time to fulfil their duties; |
– |
overseeing the development of a pipeline of diverse, high-performing potential Executive Directors, Management Board members and other senior managers; and |
– |
implementing the Board Diversity Policy and monitoring progress towards the achievement of its objectives, summarised on page 119. |
– |
Making recommendations to the Board in respect of Board Committee appointments, including appointment of Karen Guerra to the Audit Committee from 1 April 2021, as set out on page 120. |
– |
Making recommendations to the Board to appoint a new Director, Operations with effect from 1 February 2021, as set out at page 111. |
– |
Analysis of the profile, skills and experience required of future Non-Executive Directors in the context of the Group’s purpose and strategy, to support Board succession planning activities. |
– |
Making recommendations to the Board in relation to Directors’ annual appointment and re-election at the AGM, discussed further on page 117. |
– |
Reviewing the Executive Directors’ and Management Board members’ annual performance assessments and assessing the development of candidates for Management Board roles. |
– |
Overseeing the Group’s diversity and inclusion agenda, its role in promoting an inclusive and high-performing culture as part of the Group’s talent strategy, and progress in building diverse talent pipelines and creating enablers across the organisation. |
– |
Reviewing the Committee’s effectiveness in 2021, following the Committee evaluation process, discussed on pages 114 to 115. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
1. |
Heidrick & Struggles International, Inc. is an independent executive search firm, compliant with the Standard and Enhanced Code of Conduct for Executive Search Firms. Heidrick & Struggles has no connections with the Company or its Directors other than in respect of provision of executive search services. |
2. |
Applying UK Office for National Statistics ethnicity categories of: Asian; Black; Mixed/multiple ethnic groups; Other non-white ethnic group, in alignment with the Parker Review. |
BAT Annual Report and Form 20-F 2021 |
– |
attract the best talent |
– |
develop future winning capabilities |
– |
enable an agile and empowered organisation |
– |
promote an inclusive and high-performing culture |
– |
reviewing progress against the Group’s diversity and inclusion ambitions through to 2025, including to have women in 40% of senior leadership team roles and 45% of management roles, and a 50% spread of distinct nationalities in key leadership team roles; |
– |
the Group’s progress in gaining industry-leading employer certifications in diversity and inclusion and the Group’s ambitions to gain further recognition; |
– |
the roll-out of diversity and inclusion, LGBT+, and race and ethnicity allyship guides, including as part of leadership programmes; and |
– |
implementation of our IGNITE returners programme in multiple markets, which focuses on supporting experienced professionals return to the workplace after a career break. |
1. |
Applying UK Office for National Statistics ethnicity categories of: Asian; Black; Mixed/multiple ethnic groups; Other non-white ethnic group, in alignment with the Parker Review. |
2. |
Senior Management comprises the Management Board and Company Secretary in accordance with the UK Corporate Governance Code. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Objective in 2021 |
Progress in 2021 | |
Considering all aspects of diversity when reviewing the composition of, and succession planning for, the Board and Management Board. |
– The Nominations Committee has regard to diversity in its widest sense, including attributes such as gender, race, ethnicity, cultural and social backgrounds, and other personal attributes, when undertaking these activities. | |
Considering a wide pool of candidates across genders for appointment to the Board. |
– Executive search firms are engaged to support Board and Management Board succession planning where applicable and are required to provide gender-balanced shortlists of candidates. Succession planning for Executive Directors and Management Board members takes into account potential internal candidates from across the Group and potential external candidates. | |
Maintaining at least 30% female Board representation, with the ambition of progressing towards further gender balance. |
– The representation of women on the Board was 40% as at 31 December 2021 (2020: 33.3%). Please refer to the note above in relation to representation of women on the Board in 2022. – Non-Executive Director succession planning takes into account the Board’s ambition to further improve gender diversity. | |
Giving preference, where appropriate, to engagement of executive search firms accredited under the Standard and Enhanced Codes of Conduct for Executive Search Firms. |
– Where executive search firms are engaged to provide executive search services to support Board succession planning, preference is given to those that are accredited under the Standard and Enhanced Codes of Conduct for Executive Search Firms. | |
Oversight of the development of a pipeline of diverse, high-performing potential Executive Directors, Management Board members and other senior managers. |
– The representation of women on the Management Board was 15.4% as at 31 December 2021 (2020: 15.4%) and remains so currently. Management Board succession planning takes into account the ambition to progress towards improved gender diversity. – Emphasis is placed on building diverse talent pools at all levels of the organisation through recruiting, developing and retaining diverse and high-performing talent. – In 2021, 47% of the Group’s external management recruits were women (2020: 43%) and women comprised 51% of our new graduate intake in 2021. – Please refer to pages 69 to 73 for further information about the Group’s diversity and inclusion agenda. |
BAT Annual Report and Form 20-F 2021 |
Attended/Eligible to attend |
||||||||||||
Name |
Member since |
Scheduled 1 |
(a) |
Ad hoc |
||||||||
Holly Keller Koeppel 2(a),(b) |
2017 |
5/5 |
0/0 |
|||||||||
Karen Guerra 2(a),(c) |
2021 |
4/4 |
0/0 |
|||||||||
Darrell Thomas 2(a),(b) |
2020 |
5/5 |
0/0 |
|||||||||
Luc Jobin 2(d) |
2019 – 2021 |
2/2 |
0/0 |
|||||||||
Jerry Fowden 2(e) |
2019 – 2021 |
1/1 |
0/0 |
1. |
Meetings: (a) the Committee held five meetings in 2021; (b) five meetings of the Committee are scheduled for 2022. |
2. |
Membership: (a) all members of the Committee are independent Non-Executive Directors in accordance with the UK Corporate Governance Code 2018 Provisions 10 and 24 and applicable US federal securities laws and NYSE listing standards. The Board has determined each Committee member to meet the financial literacy requirements applicable under NYSE listing standards. Each member of the Committee has recent and relevant financial experience in accordance with the UK Corporate Governance Code 2018. The Committee members as a whole have competence relevant to the sectors the Group operates in; (b) Holly Keller Koeppel and Darrell Thomas are each designated as an audit committee financial expert in accordance with applicable US federal securities laws and NYSE listing standards; (c) Karen Guerra became a Committee member on 1 April 2021; (d) Luc Jobin ceased to be a Committee member on his appointment as Chairman from conclusion of the Company’s AGM on 28 April 2021; and (e) Jerry Fowden ceased to be a Committee member on stepping down from the Board with effect from 1 April 2021. |
3. |
The Finance and Transformation Director attends all Committee meetings but is not a member. Other Directors may attend by invitation. The Director, Legal & External Affairs and General Counsel, the Group Head of Internal Audit and the external auditors attend all meetings. |
4. |
The Committee meets alone with the external auditors, and, separately with the Group Head of Internal Audit, at the end of every Committee meeting. The Committee also meets periodically with management. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
integrity of the Group’s financial statements and any formal announcements relating to the Company’s performance, considering any significant financial reporting issues, significant judgements and estimates reflected in them, before their submission to the Board; |
– |
consistency of the Group’s accounting policies; |
– |
effectiveness of, and makes recommendations to the Board on, the Group’s accounting, internal accounting and other financial controls, auditing matters and business risk management systems; |
– |
effectiveness of the Group’s internal audit function; and |
– |
independence, performance, effectiveness and objectivity of the Company’s external auditors, making recommendations to the Board as to their reappointment (or for a tender of audit services where appropriate), and approving their terms of engagement and the level of audit, audit-related and non-audit fees. |
– |
extend the remit of the Committee to include responsibilities for the engagement of external providers to conduct assurance over defined ESG metrics and related information in annual reporting, monitoring that assurance work, and reviewing its effectiveness, taking into account applicable regulatory and professional requirements; and |
– |
make express reference to the Committee’s role in monitoring cyber security controls as part of the Committee’s oversight of the Group’s internal controls and business risk systems. |
– |
the Group’s annual results, half-year results, the application of accounting standards, and the external auditors’ reports where results are audited; |
– |
the Group’s external auditors’ year-end audit, including the key audit matters, critical audit matters, materiality assessments and the Group’s control environment, and confirming the independence of the Group’s external auditors; |
– |
the basis of preparation and accounting judgements; |
– |
the steps taken to validate the Group’s ‘going concern’ assessment at half-year and year-end and agreeing the process and steps taken to determine the Group’s viability statement at year-end; |
– |
adjusting items, applicable accounting treatments and the use of alternative performance measures; |
– |
the annual assessment of goodwill and intangibles impairment; |
– |
the accounting applicable to retirement benefits liabilities and assets; |
– |
the Group’s liquidity position, including current facilities and financing needs; |
– |
the internal processes followed for the preparation of the Annual Report and Form 20-F and confirming that the processes appropriately facilitated the preparation of an Annual Report and Form 20-F that is ‘fair, balanced and understandable’; |
– |
the Group’s risk register, including prioritisation and categorisation of Group risks, and relevant mitigating factors; |
– |
oversight of management’s activities to ensure ongoing compliance with the US Sarbanes-Oxley Act of 2002 (SOx) (discussed on page 127); |
– |
the Company’s status as a Foreign Private Issuer for the purposes of US securities laws; |
– |
regular reports from the Group Head of Internal Audit on the internal audits of markets, business units, processes and operations, management responses to internal audit findings and action plans put in place to address any issues raised; |
– |
the 2022 internal audit plan and progress against the 2021 plan; |
– |
annual and interim reports on the Group’s ‘Delivery with Integrity’ compliance programme (discussed on pages 56 to 57), and monitoring compliance with the Standards of Business Conduct (SoBC), and monitoring SoBC incident reporting and the effectiveness of ‘Speak Up’ channels prior to review by the Board; |
– |
the Group’s sustainability performance on an annual basis, including performance against the Group’s ESG targets, the Group’s responsible marketing and youth access prevention activities, and the Group’s community investment activities in countries and communities in which the Group operates under the Group Strategic Framework for Community Investment, (discussed on page 54); |
– |
the outcomes of assessments of countries in which Group companies operate identified to have a higher degree of exposure to human rights risks in 2021, including local compliance with Group policies, standards and controls and local measures in place to enhance human rights risk management; |
– |
periodic reports from the Group’s Corporate Audit Committee and Regional Audit and Corporate Social Responsibility Committees; |
– |
the annual report from the Group Head of Security on security risks, losses and fraud arising during the preceding year; |
– |
half-year and year-end reports on political contributions, (discussed on page 127); and |
– |
the Committee’s effectiveness, following the annual evaluation of the Committee (discussed on pages 114 to 115). |
– |
segmental reporting: Operating Segments |
– |
revisions to Group accounting policies: Agriculture |
– |
UK-adopted IFRS: UK-adopted international accounting standards from 1 January 2021 onwards. |
– |
Euro Hybrid Bond issuance: € 2 billion hybrid bond issuance and assessed its classification as equity in accordance with IAS 32 (Financial Instruments |
BAT Annual Report and Form 20-F 2021 |
– |
the Group’s significant tax exposures: |
– |
contingent liabilities, provisions and deposits in connection with ongoing litigation: |
– |
foreign exchange and hyperinflation: |
– |
goodwill and intangibles impairment review: |
– |
changes in the Group: |
– |
hybrid bonds: |
– |
adjusting items: |
– |
risks relating to the continued impact of COVID-19 and the approach to incorporating those risks into existing risks to the Group managed under the Group’s risk register; |
– |
climate change risks and their impact on the Group, to ensure robust processes are in place to manage both physical and transitional climate change risks, and annual reporting on the identification, assessment and management of those risks, in alignment with the TCFD framework; |
– |
risks related to ESG and the approach to incorporating ESG risks into existing risks managed under the Group’s risk register, to ensure appropriate internal standards, strategic plans, governance, monitoring and reporting mechanisms are in place to align with recognised international standards, meet external expectations and identify emerging issues; |
– |
current and emerging risks in the context of the Group’s digital strategy, technology architecture and data management, with particular focus on digital transformation, cyber security, protection of the Group’s information systems and data, and the approach to managing those risks; |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
revisions to the Group’s risk appetite framework as it relates to the Group’s strategic objectives, and regular review of emerging risks to the Group prior to Board assessment; |
– |
the report on the effectiveness of the Company’s risk management system; |
– |
risks associated with continued exposure to interest rate changes on net finance costs, arising from existing and future refinanced debt; |
– |
re-assessment of risks consequent to the UK’s EU exit (Brexit) in the context of the Group risk register (including costs of capital, FX exposures, supply chain continuity, taxation, customs duty and talent management), resulting in the removal of Brexit-related risk from the Group risk register in view of impacts assessed as below threshold; and |
– |
Group anti-bribery and anti-corruption, sanctions and supply chain controls and compliance programme. |
![]() |
For further information please refer to the Group Principal Risks on pages 92 to 97 and the Group risk factors on pages 317 to 339 |
– |
creates a mutual or conflicting interest with any Group company; |
– |
places the external auditors in the position of auditing their own work; |
– |
results in the external auditors acting as a manager or employee of any Group company; or |
– |
places the external auditor in the position of advocate for any Group company. |
– |
requires Committee pre-approval for all audit, audit-related and other non-audit services, except in respect of non-audit services falling within the exceptions described above; |
– |
prohibits the provision of certain types of services by the external auditors, including those with contingent fee arrangements, expert services unrelated to audit and other services prohibited by US securities laws and the Public Company Accounting Oversight Board; |
– |
prohibits the Chief Executive, Finance and Transformation Director, Group Financial Controller and Group Chief Accountant from having been employed by the external auditors in any capacity in connection with the Group audit for two years before initiation of an audit; |
– |
specifies requirements in respect of audit partner rotation, including for both the lead and the concurring external audit partners to rotate off the Group audit engagement at least every five years, and not to recommence provision of audit or audit-related services to the Group for a further five years; and |
– |
provides authority for the Committee to oversee any allegations of improper influence, coercion, manipulation or purposeful misleading in connection with any external audit, and to review any issues arising in the course of engagement with the external auditors. |
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
|||||||
Audit services |
18.2 |
18.6 |
||||||
Audit of defined benefit schemes |
0.4 |
0.5 |
||||||
Audit-related assurance services |
8.0 |
8.5 |
||||||
Total audit and audit-related services |
26.6 |
27.6 |
||||||
Other assurance services |
0.3 |
0.5 |
||||||
Tax advisory services |
– |
– |
||||||
Tax compliance |
– |
– |
||||||
Other non-audit services |
– |
– |
||||||
Total non-audit services |
0.3 |
0.5 |
– |
experience and expertise of the external auditors in their direct communication with, and support to, the Committee; |
– |
their mindset and professional scepticism; |
– |
their effectiveness in completing the agreed external audit plan; |
– |
their approach to handling significant audit and accounting judgements; |
– |
content, quality and robustness of the external auditors’ reports; and |
– |
their provision of non-audit services, as noted above, and other matters that may impact independence. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
For more information on risks see the Group Principal Risks on pages 92 to 97 and the Group risk factors on pages 317 to 339 |
– |
review their system of internal control, confirm whether it remains effective, and report on any specific control deficiencies and the action being taken to address them; and |
– |
review and confirm that policies and procedures to promote compliance with the SoBC are fully embedded and identify any material instances of non-compliance. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
![]() |
Read more about Speak Up channels and Speak Up reports on page 57 |
BAT Annual Report and Form 20-F 2021 |
Index to our Remuneration Report |
| |||
Policy Report |
| |||
133 |
||||
135 |
||||
136 |
||||
143 |
||||
144 |
||||
145 |
||||
148 |
||||
149 |
||||
152 |
||||
The following Annual Report on Remuneration has been prepared in accordance with the relevant provisions of the Companies Act 2006 and as prescribed in The Large and Medium-sized Companies and Group (Accounts and Reports) (Amendment) Regulations 2013 (the UK Directors’ Remuneration Report Regulations). |
|
– |
The Annual Remuneration Report, explaining how the current Remuneration Policy has been implemented during 2021; and |
– |
The new Directors’ Remuneration Policy, which will be put forward for a binding vote at the 2022 AGM. |
– |
Creates close, long-term links between the Group’s senior management and our shareholders; |
– |
Enables the Group to attract and retain top quality talent in the global marketplace; |
– |
Directly supports Group strategy delivery and our A Better Tomorrow TM agenda, by rewarding high levels of sustainable long-term performance in both an appropriate and competitive manner; and |
– |
Continues to incorporate best practice policy features. |
– |
Strengthen focus on revenue growth in New Categories; |
– |
Ensure focus on improving profitability in New Categories; and |
– |
Incentivise the continued financial performance of the Group. |
– |
That the proposals to strengthen the focus on New Categories performance within the short-term incentive plan (STI) and long-term incentive plan (LTI) are timely and appropriate for the Group, and |
– |
There were opportunities to reconsider some aspects of the proposed metrics for both the STI and LTI, such as the balance and weighting between metrics and some specific performance conditions. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 measures |
Original proposal |
Final proposal |
||||||||
Short-term incentive |
||||||||||
Volume Share |
15% |
Volume Share |
10% |
Volume Share |
10% | |||||
New Categories Revenue |
20% |
New Categories Revenue |
15% |
New Categories Revenue |
15% | |||||
Adj Profit from Operations |
30% |
Adj Profit from Operations |
25% |
Adj Profit from Operations |
25% | |||||
Deleverage (ex FX) |
35% |
Adj Cash Generated From Operations |
30% |
Adj Cash Generated From Operations |
30% | |||||
New Categories Contribution |
20% |
New Categories Contribution |
20% |
BAT Annual Report and Form 20-F 2021 |
2021 measures |
Original proposal |
Final proposal |
||||||||
Long-term incentive |
||||||||||
Adjusted revenue growth |
20% |
Adjusted revenue growth |
20% |
Adjusted revenue growth |
15% | |||||
EPS (current / constant) |
40% |
EPS (current / constant) |
20% |
EPS (current / constant) |
30% | |||||
Cash Conversion |
20% |
Cash Conversion |
20% |
Cash Conversion |
20% | |||||
Relative TSR |
20% |
Relative TSR (streamlined comparator group) |
20% |
Relative TSR (streamlined comparator group) |
20% | |||||
New Categories revenue growth |
20% |
New Categories revenue growth |
15% |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Strategic Purpose |
Key Features | |
Salary |
||
To attract and retain high-calibre individuals to deliver the Group’s long-term strategy and to offer market-competitive levels of guaranteed cash to reflect an individual’s skills, experience and role within the Group. |
– Normally paid in 12 equal monthly instalments during the year; – Reviewed annually in February (changes effective from April) or subject to ad-hoc review on significant change of responsibilities;– Reviewed taking into consideration several factors including individual performance and appropriate market data based on a Pay Comparator Group; – Annual increases will generally be in the range of the increases in the base pay of other UK-based employees in the Group and will not exceed 10% per annum; and– Recently appointed Executive Directors’ base salaries may exceed the top of the range of the salary increases for UK-based employees where the Remuneration Committee considers it appropriate to reflect the accrual of experience. | |
Benefits |
||
To provide market-competitive benefits consistent with the role which: – attract and retain high-calibre individuals to deliver the Group’s long-term strategic plans; and – recognise that such talent is global in source and that the availability of certain benefits (e.g. relocation, repatriation, taxation compliance advice) will from time to time be necessary to avoid such factors being an inhibitor to accepting the role. |
The Company offers the following contractual benefits to Executive Directors: – A car or car allowance; – Use of a car and driver for personal and business use; – Employment tax advice; – Tax equalisation payments (where appropriate); – Private medical insurance, including general practitioner ‘walk in’ medical services; – Personal life and accident insurance; – Housing, education allowances or similar arrangements as appropriate to family circumstances; and – Other benefits may include Executive Directors and their partners’ attendance at hospitality or similar functions, and the provision of benefits which may be treated as benefits for tax purposes, such as the provision of home security and reimbursement of expenses incurred in connection with their duties. | |
Pension |
||
To provide competitive post-retirement benefit arrangements which recognise the external environment in the context of attracting and retaining senior high-calibre individuals to deliver the Group’s long-term strategy. |
– Only base salary is pensionable. – Defined Contribution (“DC”) benefits – Executive Directors are eligible to receive a pension benefit equivalent to a maximum of 15% of base salary as a contribution into the British American Tobacco UK Pension Plan or, as alternative provision, they can opt for either a cash allowance or accrual in a DC unfunded arrangement. The Company contribution rate is aligned with the benefit available to our wider UK population where the default contribution rate is 15%, comprising of a core 10% contribution rate and an additional 5% contribution on a matching basis to an employee’s pension contribution. |
BAT Annual Report and Form 20-F 2021 |
Short-term incentives (STI) |
||
– To incentivise the attainment of corporate targets aligned to the Group’s strategic objectives on an annual basis, with a deferred element to ensure alignment with shareholders’ interests. – To ensure, overall, a market-competitive remuneration to attract and retain high-calibre individuals to deliver the Group’s long-term strategy. |
Opportunity – Chief Executive – Maximum 250%; on-target 125%.– Finance and Transformation Director – Maximum 190%; on-target 95%.Operation – 50% of the incentive delivered as cash; 50% as deferred shares (DSBS) which vest after three years. Deferred shares attract a dividend equivalent which is delivered in additional quarterly interim dividend equivalent shares; – The Remuneration Committee sets the performance targets each year at the beginning of the performance period and is able to vary the exact measures and the weighting of them from year to year; – Performance measures for 2021 can be found on page 137 and for 2022 on page 143; – The Remuneration Committee has discretion to adjust outcomes in circumstances where it considers it is appropriate to do so to reflect the overall performance of the Company; – In cases of identified poor individual performance, the corporate result may be reduced by up to 50%; and – Clawback and malus provisions are in place. | |
Long-term incentives (LTIP) |
||
– To put in place a combination of measures with appropriately stretching targets around the long-term strategy delivery that provides a balance relevant to the Company’s business and market conditions as well as alignment between Executive Directors’ and shareholders’ interests. – To facilitate the appointment of senior high-calibre individuals required to deliver the Group’s long-term strategy, and to promote the long-term success of the Company. |
Opportunity – Maximum annual award of shares of 500% of salary for all Executive Directors. – Normal annual grants of 500% of salary for the Chief Executive and 400% of salary for the Finance and Transformation Director. Operation – LTIP awards vest only to the extent that: – the performance conditions are satisfied at the end of the three-year performance period; and – an additional vesting period of two years from the third anniversary of the date of grant has been completed; – Dividend equivalent shares are awarded at the end of the extended vesting period to the extent that the awards vest; – The Remuneration Committee sets the performance targets for the applicable performance period each year; – Vesting levels are based on the achievement of appropriately stretching targets against performance measures aligned to the Group’s long-term strategy; – Performance measures for the 2019-2021 performance period are detailed on page 138 and for the awards to be granted in 2022 are detailed on page 144; – The Remuneration Committee has discretion to adjust the level of vesting in circumstances where it considers it is appropriate to do so to reflect the overall performance of the Company; and – Clawback and malus provisions are in place. | |
Shareholding requirements |
||
– To strengthen the alignment between the interests of the Executive Directors and those of shareholders by requiring Executive Directors to build up a high level of personal shareholding in the Company. – To ensure long-term alignment between the interests of the Executive Directors and those of shareholders through the operation of post-employment shareholding requirements. |
Executive Directors are required to hold shares in the Company: – during service as a Director, equal to the value of the same multiple of salary at which LTIP awards are made to that Director (currently, 500% for the Chief Executive and 400% for the Finance and Transformation Director); and – after ceasing service as a Director, equal to the value of 100% of the shareholding requirement that applied while a Director for a period until the second anniversary of cessation of employment with the Group. | |
All-employee share plans |
||
Executive Directors are eligible to participate in the Company’s all-employee share schemes which are designed to incentivise employees by giving them an opportunity to build shareholdings in the Company. |
– All-employee share schemes are the Partnership Share Scheme, the Sharesave Scheme and the Share Incentive Plan (SIP); and– Executive Directors are subject to the same limits on participation as other employees, as defined by the applicable statutory provisions. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Single figure for Executive Directors |
Jack Bowles |
Tadeu Marroco |
||||||||||||||
2021 £’000 |
£’000 |
2021 £’000 |
£’000 |
|||||||||||||
Fixed Pay |
| |||||||||||||||
Salary |
1,316 |
1,259 |
803 |
775 |
||||||||||||
Taxable benefits |
320 |
508 |
100 |
152 |
||||||||||||
Pension |
197 |
189 |
121 |
116 |
||||||||||||
Total Fixed Pay |
1,833 |
1,956 |
1,024 |
1,043 |
||||||||||||
Variable Pay |
||||||||||||||||
Short-term incentives |
2,820 |
2,238 |
1,308 |
1,046 |
||||||||||||
Long-term incentives 1,2 |
2,815 |
757 |
584 |
489 |
||||||||||||
Other emoluments |
3 |
3 |
3 |
18 |
||||||||||||
Total Variable Pay |
5,638 |
2,998 |
1,895 |
1,553 |
||||||||||||
Total Remuneration |
7,471 |
4,954 |
2,919 |
2,596 |
1. |
The 2019 LTIP award is due to vest on 28 March 2022 for Jack Bowles (first award made as an Executive Director) and Tadeu Marroco based on completion of the three-year performance period on 31 December 2021. The value shown is based on the average share price for the three-month period ended 31 December 2021 of 2,616p. Given the share price performance since the date of grant of awards, none of the value shown in the table above is attributable to share price appreciation. |
2. |
Long-term incentives shown for 2020: in accordance with the UK Directors’ Remuneration Report Regulations, estimates for the values of the vesting 2018 LTIP awards were given in the Annual Report on Remuneration for the year ended 31 December 2020; these amounts have been re-presented to show the actual market value on the date of vesting in 2021. |
Short-term incentives for the performance period ended in 2021 |
||
Performance summary: | ||
Chief Executive: corporate performance – 214.3% of salary | ||
Finance and Transformation Director: corporate performance – 162.8% of salary | ||
Group share of Key Markets |
Adjusted profit from operations (APFO) | |
+6 bps growth over 2020 |
at constant rates of exchange +5.2% growth | |
New Categories revenue +50.9% growth |
Deleveraging (excluding foreign exchange) -0.50x at constant rates of exchange | |
Long-term incentives for the three-year performance period ended in 2021 |
||
Vesting at 49.1% |
||
Total shareholder return (TSR) |
0% achievement | |
17 out of 24 in FMCG comparator group 2019–2021 |
(0% of award vesting out of possible 20%) | |
Adjusted diluted earnings per share (EPS) growth |
0% achievement | |
3.5% CAGR at current rates of exchange |
(0% of award vesting out of possible 20%) | |
Adjusted diluted earnings per share (EPS) growth |
45.5% achievement | |
6.8% CAGR at constant rates of exchange |
(9.1% of award vesting out of possible 20%) | |
Adjusted revenue growth |
100% achievement | |
5.3% CAGR at constant rates of exchange |
(20% of award vesting out of possible 20%) | |
Adjusted operating cash flow conversion ratio |
100% achievement | |
101.0% ratio over the performance period |
(20% of award vesting out of possible 20%) |
BAT Annual Report and Form 20-F 2021 |
Jack Bowles |
Tadeu Marroco |
|||||||||||||||
2021 £’000 |
2020 £’000 |
2021 £’000 |
2020 £’000 |
|||||||||||||
Salary |
1,316 |
1,259 |
803 |
775 |
||||||||||||
Taxable benefits 1 |
||||||||||||||||
– car allowance |
20 |
20 |
20 |
20 |
||||||||||||
– health insurance |
15 |
15 |
13 |
13 |
||||||||||||
– life insurance |
18 |
19 |
8 |
8 |
||||||||||||
– tax advice |
49 |
65 |
21 |
30 |
||||||||||||
– use of Company driver |
65 |
85 |
27 |
55 |
||||||||||||
– home and personal security 2 |
80 |
155 |
4 |
14 |
||||||||||||
– tax & social security 3 |
62 |
136 |
– |
– |
||||||||||||
– other expenses related to individual and/or accompanied attendance at Company functions/events |
11 |
13 |
7 |
12 |
||||||||||||
Total taxable benefits |
320 |
508 |
100 |
152 |
||||||||||||
Short-term incentives |
||||||||||||||||
STI vesting percentage (% of maximum) |
85.7% |
71.1% |
85.7% |
71.1% |
||||||||||||
STI: cash – Group performance cash element |
1,410 |
1,119 |
654 |
523 |
||||||||||||
STI: DSBS – Group performance deferred element |
1,410 |
1,119 |
654 |
523 |
||||||||||||
Total short-term incentives (page 137) |
2,820 |
2,238 |
1,308 |
1,046 |
||||||||||||
Long-term incentives 4,5 |
||||||||||||||||
LTIP vesting percentage (% of maximum) |
49.1% |
54.2% |
49.8% |
54.2% |
||||||||||||
LTIP value to vest |
2,267 |
612 |
470 |
395 |
||||||||||||
Dividend equivalent 6 |
548 |
145 |
114 |
94 |
||||||||||||
Total long-term incentives (page 138) |
2,815 |
757 |
584 |
489 |
||||||||||||
Total pension-related benefits (page 139) |
197 |
189 |
121 |
116 |
||||||||||||
Other emoluments |
||||||||||||||||
Share Reward Scheme (value of ordinary shares awarded) |
3 |
3 |
3 |
3 |
||||||||||||
Sharesave Scheme (face value of discount on options granted) |
– |
– |
– |
15 |
||||||||||||
Total other emoluments |
3 |
3 |
3 |
18 |
||||||||||||
Total remuneration |
7,471 |
4,954 |
2,919 |
2,596 |
1. |
Taxable benefits: the figures shown are gross amounts as, in line with the UK market, it is the normal practice for the Company to pay the tax which may be due on any benefits, with the exception of the car or car allowance. The numbers presented above for tax advice are inclusive of applicable VAT and income tax. |
2. |
Figure for home and personal security for Jack Bowles for 2020 related to necessary one-off security improvements to his residence and annual maintenance/monitoring. The figure reported for 2021 relates only to annual maintenance/monitoring. As noted in point 1 above, these amounts have been grossed up for UK tax purposes. |
3. |
The amount reported for Jack Bowles for 2020 in the Annual Report on Remuneration for the year ended 31 December 2020 was £220,000. This amount has been restated above to account for credits received in the UK in respect of overseas tax payments made by the Company. The figure reported for 2021 relates to overseas taxes paid by the Company in respect of employment income in order to protect Jack Bowles to his UK tax position in line with the Company policy for the wider workforce. |
4. |
The 2019 LTIP award is due to vest on 28 March 2022 based on completion of the three-year performance period on 31 December 2021. The value shown is based on the average share price for the three-month period ended 31 December 2021 of 2,616p. The LTIP vesting figure above for Jack Bowles reflects the first award made as an Executive Director. The LTIP vesting figure above for Tadeu Marroco reflects an award made prior to being appointed as an Executive Director. |
5. |
LTIP award shown for 2020: the values disclosed in the Annual Report on Remuneration for the year ended 31 December 2020 were estimated values as the award had not vested by the date of that report; these amounts have been re-presented based on the actual market value on the date of vesting of 27 March 2021 of 2,578p. |
6. |
LTIP dividend equivalent payments: the dividend equivalent payment that will attach to the LTIP award that is included in the Single Figure Table is reported. The values for the year ended 31 December 2020 have been restated on this basis. The amount reported for Jack Bowles will be delivered in shares following the end of the two-year additional holding period. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
STI: performance measure and target 2021 |
Description of measure 2021 |
Actual performance 2021 |
Payout (maximum) | |||
Group’s share of Key Markets (growth over prior year) Weighting: 15% Threshold: Maximum: |
The Group’s volume share in its Key Markets accounts for around 80% of cigarettes volume and 90% of THP volume of the Group’s subsidiaries. The Group’s share is calculated from data as independently measured by retail audit agencies and scanner sales to consumers, or from estimated shipment share. |
Global volume share in key markets grew by 6 bps. Strategic Report: Delivering our strategy – A Better Tomorrow TM for Consumers |
9.0% (15%) | |||
New Categories revenue (growth over prior year) Weighting: 20% Threshold: Maximum: |
New Categories Revenue is the revenue derived from the Vapour, THP and Modern Oral product categories. This measure is assessed at constant rates of exchange. |
New Categories revenue grew by 50.9%. Strategic Report: Delivering our strategy – A Better Tomorrow TM for Shareholders |
20% (20%) | |||
Adjusted profit from operations (APFO) Weighting: 30% Threshold: Maximum: |
APFO is the adjusted profit from operations at constant rates of exchange for the year ended 31 December 2021. Please refer to page 308 for the detailed description of APFO. |
APFO growth over the prior year of 5.2%. Strategic Report: Delivering our strategy – A Better Tomorrow TM for Shareholders |
21.7% (30%) | |||
Deleveraging (excluding foreign exchange) Weighting: 35% Threshold: Maximum: |
Deleveraging (excluding foreign exchange) refers to the reduction in Adjusted Net Debt to Adjusted EDITDA during the year ended 31 December 2021, assessed at constant rates of exchange. |
Deleveraging (excluding foreign exchange) was 0.50x. Strategic Report: Delivering our strategy – A Better Tomorrow TM for Shareholders |
35% (35%) | |||
85.7% (100%) |
Available STI award as % of base salary |
STI award achieved as % of maximum opportunity |
STI award achieved % of base salary |
STI award achieved £’000 (Value shown in Single Figure Table) 1 ,2 |
|||||||||||||
Jack Bowles |
250% |
85.7% |
214.3% |
2,820 |
||||||||||||
Tadeu Marroco |
190% |
85.7% |
162.8% |
1,308 |
1. |
Malus and clawback provisions apply. |
2. |
50% of the STI award will be paid in cash and 50% as an award under the DSBS. Awards made under the DSBS are in the form of free ordinary shares in the Company that normally vest after three years and no further performance conditions apply in that period. In certain circumstances, such as resigning before the end of the three-year period, participants may forfeit all of the shares. |
3. |
The Remuneration Committee did not consider that any discretion to adjust the formulaic outcome need be applied. |
BAT Annual Report and Form 20-F 2021 |
LTIP: performance measure |
Description of measure and target for 2019 LTIP Performance period 1 January 2019 – 31 December 2021 |
Result achieved |
Vesting percentage | |||||
Relative TSR 1 |
Ranked 17 |
0% | ||||||
Relative to a peer group of international |
2019–2021 LTIP target |
out of 24 |
(out of maximum of 20%) | |||||
FMCG companies |
Threshold |
At median, 3% vests |
||||||
Weighting: 20% |
Maximum |
At upper quartile, 20% vests |
||||||
EPS growth at current rates of exchange |
3.5% CAGR |
0% | ||||||
2019–2021 LTIP target |
||||||||
Compound annual growth in adjusted diluted EPS measured at current rates of exchange |
Threshold |
At CAGR of 5%, 3% vests |
(out of maximum of 20%) | |||||
Maximum |
At CAGR of 10%, 20% vests |
|||||||
Weighting: 20% |
||||||||
EPS growth at constant rates of exchange |
6.8% CAGR |
9.1% | ||||||
2019–2021 LTIP target |
(out of maximum of 20%) | |||||||
Compound annual growth in adjusted diluted EPS measured at constant rates of exchange |
Threshold |
At CAGR of 5%, 3% vests |
||||||
Maximum |
At CAGR of 10%, 20% vests |
|||||||
Weighting: 20% |
||||||||
Adjusted revenue 2 |
5.3% CAGR |
20% | ||||||
Compound annual growth measured at constant rates of exchange |
2019–2021 LTIP target |
(out of maximum | ||||||
Threshold |
At CAGR of 3%, 3% vests |
of 20%) | ||||||
Maximum |
At CAGR of 5%, 20% vests |
|||||||
Weighting: 20% |
||||||||
Adjusted Operating cash flow |
101.0% ratio |
20% | ||||||
conversion ratio |
2019–2021 LTIP target |
|||||||
Ratio over the performance period at current rates of exchange |
Threshold |
Ratio of 85%, 3% vests |
(out of maximum of 20%) | |||||
Maximum |
Ratio of 95%, 20% vests |
|||||||
Weighting: 20% |
||||||||
Total vesting level as a percentage of maximum opportunity |
49.1% |
1. |
Relative TSR: |
2. |
The underpin for adjusted revenue growth measure: |
3. |
The Remuneration Committee did not consider that any discretion to adjust the formulaic outcome need be applied. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Number of ordinary shares subject to award |
Vesting % achieved (based on 2019–2021 performance period) |
Number of ordinary shares to vest |
Value of ordinary shares to vest 1 £’000 |
Dividend equivalent payment on vesting 2 £’000 |
Total value to vest £’000 (Value shown in Single Figure Table) |
|||||||||||||||||||
Jack Bowles |
176,532 |
49.1% |
86,677 |
2,267 |
548 |
2,815 |
||||||||||||||||||
Tadeu Marroco 3 |
36,057 |
49.8% |
17,956 |
470 |
114 |
584 |
1. |
The value of ordinary shares to vest shown above is based on the average share price for the three-month period ended 31 December 2021 of 2,616p. |
2. |
The dividend equivalent amount shown above that will be delivered on vesting is the value of the dividend equivalents accrued on the proportion of the award that is due to vest. Dividend equivalent will be delivered as shares following the end of the two-year post-vesting holding period for Jack Bowles. Dividend equivalent will be delivered as cash on vesting date for Tadeu Marroco due to LTIP award being made prior to appointment as Executive Director. |
3. |
The number of shares subject to award made to Tadeu Marroco reflect the award opportunities available at the time of the award, prior to being appointed as Executive Director. |
4. |
The vesting percentage for Tadeu Marroco reflects the vesting percentage applicable to awards made prior to being appointed as Executive Director. |
Total Defined Contribution (DC) fund value as at year-end 31 December 2021 £’000 | ||||||
Pension values |
Defined Contribution (DC) Unapproved Unfunded Retirement Benefit Scheme (UURBS) 1 |
British American Tobacco UK Pension Plan | ||||
Jack Bowles |
1,117 |
359 | ||||
Tadeu Marroco |
780 |
211 | ||||
Total |
1,897 |
570 |
1. |
The DC UURBS credit accrued over the year is increased in line with the Company’s Weighted Average Cost of Debt (WACD) over the year. For the year ended 31 December 2021, a WACD of 3.5% has been used. |
BAT Annual Report and Form 20-F 2021 |
Year |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
||||||||||||||||||||||||||||||
Chief Executives’ ‘single figure’ of total remuneration (£’000) Nicandro Durante 1 (to 1 April 2019) |
6,340 |
6,674 |
3,617 |
4,543 |
8,313 |
10,244 |
8,651 |
3,054 |
n/a |
n/a |
||||||||||||||||||||||||||||||
Jack Bowles (from 1 April 2019) |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
3,512 |
4,954 |
7,471 |
||||||||||||||||||||||||||||||
Annual bonus (STI) paid against maximum opportunity (%) Nicandro Durante 1 (to 1 April 2019) |
85.0 |
81.3 |
73.2 |
100 |
100 |
97.2 |
100 |
50.0 |
n/a |
n/a |
||||||||||||||||||||||||||||||
Jack Bowles (from 1 April 2019) |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
96 |
71.1 |
85.7 |
||||||||||||||||||||||||||||||
Long-term incentive (LTIP) paid against maximum opportunity (%) |
||||||||||||||||||||||||||||||||||||||||
Nicandro Durante 1 (to 1 April 2019) |
87.1 |
49.2 |
0.0 |
8.7 |
46.0 |
96.1 |
70.5 |
69.3 |
n/a |
n/a |
||||||||||||||||||||||||||||||
Jack Bowles (from 1 April 2019) |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
69.9 |
54.2 |
49.1 |
1. |
Nicandro Durante retired as Chief Executive on 1 April 2019. Historical data are taken from the Directors’ Remuneration Reports for the relevant years and are recast (as appropriate) on the basis of the ‘single figure’ calculation as prescribed in the UK Directors’ Remuneration Report Regulations. His ‘single figure’ remuneration for the year ended 31 December 2019 has been time-apportioned to reflect the period he was Chief Executive. |
1. |
Performance and pay chart: 30-trading-day |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
% change in salary/fees |
% change in taxable benefits 1 |
% change in STI |
||||||||||||||||||||||||||
2020 to 2021 |
2019 to 2020 |
2020 to 2021 |
2019 to 2020 |
2020 to 2021 |
2019 to 2020 |
|||||||||||||||||||||||
Executive Directors |
||||||||||||||||||||||||||||
Jack Bowles |
5% |
7% |
(37%) |
84% |
26% |
(21%) |
||||||||||||||||||||||
Tadeu Marroco 2 |
4% |
5% |
(33%) |
22% |
25% |
(24%) |
||||||||||||||||||||||
Chairman |
||||||||||||||||||||||||||||
Richard Burrows 3 |
2% |
3% |
8% |
(44%) |
– |
– |
||||||||||||||||||||||
Luc Jobin 4 |
334% |
2% |
24% |
(79%) |
– |
– |
||||||||||||||||||||||
Non-Executive Directors |
||||||||||||||||||||||||||||
Sue Farr |
1% |
2% |
0% |
(100%) |
– |
– |
||||||||||||||||||||||
Dr Marion Helmes |
1% |
2% |
(72%) |
(77%) |
– |
– |
||||||||||||||||||||||
Jerry Fowden 5 |
2% |
2% |
(98%) |
14% |
– |
– |
||||||||||||||||||||||
Holly Koeppel |
1% |
3% |
(99%) |
(82%) |
– |
– |
||||||||||||||||||||||
Savio Kwan |
1% |
2% |
(97%) |
(84%) |
– |
– |
||||||||||||||||||||||
Dimitri Panayotopoulos 6 |
9% |
21% |
(78%) |
(88%) |
– |
– |
||||||||||||||||||||||
Karen Guerra 7 |
0% |
n/a |
0% |
n/a |
– |
– |
||||||||||||||||||||||
Darrell Thomas 8 |
n/a |
n/a |
n/a |
n/a |
– |
– |
||||||||||||||||||||||
Average UK-based employee9 |
6% |
3% |
(1%) |
1% |
20% |
(5%) |
1. |
Changes in taxable benefit values for 2019 to 2020 and for 2020 to 2021 for Non-Executive Directors were primarily a result of a reduction in travel and subsistence costs associated with business functions due to COVID-related travel restrictions throughout 2020 and 2021. Further details of the taxable benefits figures can be found in the table on page 144. |
2. |
Tadeu Marroco was appointed as an Executive Director from 5 August 2019. For the period 5 August 2019 to 31 December 2019, annualised figures have been used to calculate the year-on-year |
3. |
Richard Burrows departed the Company 28 April 2021. For the period 1 January to 28 April 2021, annualised figures have been used to calculate the year-on-year |
4. |
Luc Jobin was appointed Chairman from 28 April 2021. The change in fees from 2020 to 2021 is due to the increase in fees received following the appointment. |
5. |
Jerry Fowden was appointed to the Board on 1 September 2019 and departed the Company on 31 March 2021. For the periods 1 September to 31 December 2019 and 1 January to 31 March 2021, annualised figures have been used to calculate the year-on-year |
6. |
Dimitri Panayotopoulos started receiving the Senior Independent Director fee with effect from 1 May 2020. |
7. |
Karen Guerra was appointed to the Board on 14 September 2020. For the period 14 September 2020 to 31 December 2020, annualised figures have been used to calculate the year-on-year |
8. |
Darrell Thomas was appointed to the Board on 7 December 2020, receiving no fees or taxable benefits in 2020. Accordingly, no year-on-year |
9. |
The data for the UK-based employees comparator group are made up as follows as at 1 November 2021: (1) the weighted average base salaries; (2) the average taxable benefits per grade; and (3) the weighted average bonus result based on that population as at that date. |
BAT Annual Report and Form 20-F 2021 |
Year |
Method |
25th percentile pay ratio |
Median pay ratio |
75th percentile pay ratio |
||||||||||||
2019 |
Option A |
144:1 |
86:1 |
36:1 |
||||||||||||
2020 |
Option A |
103:1 |
66:1 |
29:1 |
||||||||||||
2021 |
Option A |
138:1 |
90:1 |
37:1 |
||||||||||||
Employees remuneration for 2021 |
25th percentile |
Median |
75th percentile |
|||||||||||||
Salary |
£36,010 |
£55,849 |
£98,777 |
|||||||||||||
Total Remuneration |
£53,980 |
£83,438 |
£202,314 |
1. |
Option A uses the total full-time equivalent remuneration for all UK employees for the financial year ended 31 December 2021 and has been used to calculate the ratio as this is viewed to be the most robust and comprehensive means of assessment and is also reflective of shareholder preferences. |
2. |
Total pay and benefits are based on the workforce as at 1 November 2021 and include the annualised income for the earnings period 1 January 2021 to 31 December 2021. |
3. |
Total pay and benefits for the Chief Executive are based on the single figure calculation on page 135. |
4. |
Total pay and benefits for the workforce is calculated as far as possible on the same basis as the Chief Executive single figure calculation. This includes salary, taxable benefits, short-term incentive, long-term incentive, dividends, pension benefits and any other remuneration receivable. For the purposes of this analysis, the following has been assumed: |
– |
For all employees that are eligible for a car benefit, the applicable car allowance amounts have been used; |
– |
For all employees that participate in the global International Executive Incentive Scheme or equivalent corporate incentive scheme, incentive pay-outs are calculated based on the same metrics; and |
– |
For all employees that participate in the UK DC scheme, Company contributions of 15% of salary have been used. |
5. |
For the calculation of the total pay and benefits for employees, employees on international assignment into and out of the UK have been included; however, assignment benefits, such as housing support, education support, home leave allowance or relocation costs, have not been included as these are not consistent with the benefits included in the Chief Executive single figure calculation. |
6. |
For hourly paid employees who are not full time, total pay and benefits have been pro-rated based on full-time employee hours. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Executive Directors – salaries |
Base salary from 1 Apr 2022 £ |
Percentage change % |
Base salary from 1 Apr 2021 £ |
|||||||||
Jack Bowles |
1,325,610 |
n/a |
1,325,610 |
|||||||||
Tadeu Marroco |
803,400 |
n/a |
803,400 |
2022 STI metrics & weightings |
||||
Volume share growth (Incl THP) 1 |
10% |
|||
New Categories revenue 2 |
15% |
|||
Adjusted profit from operations |
25% |
|||
New Categories contribution 3 |
20% |
|||
Adjusted cash generated from operations 4 |
30% |
|||
Total |
100% |
1. |
Group share of key markets will include THP performance for all major markets (markets included are Japan, South Korea, Italy, the Czech Republic, Ukraine, Russia, Poland, Greece and Hungary). |
2. |
New Categories Revenue is the revenue derived from the Vapour, THP and Modern Oral product categories. This measure is assessed at constant rates of exchange. Further details of the metric can be found on page 305. |
3. |
New Categories Contribution is the contribution to APFO from Vapour, THP and Modern Oral products. It is stated after deduction of directly attributable costs and allocated cross-category shared costs, before the deduction of administrative overheads and excluding the impact of adjusting items. The measure is assessed at constant rates of exchange. |
4. |
Net cash generated from operating activities, less net finance costs, net capital expenditure, dividends from associates and dividends paid to non-controlling interests and before cash paid/ received in respect of litigation. Adjusted CGFO is measured at constant rates of exchange. |
BAT Annual Report and Form 20-F 2021 |
LTIP measures and performance ranges |
% of award vesting at maximum |
% of award vesting at threshold |
||||||||||||||||||||||
Relative TSR |
20 |
3 |
||||||||||||||||||||||
Median performance vs. FMCG peer group to upper quartile. |
|
|||||||||||||||||||||||
The current constituents of the FMCG peer group as part of the new remuneration policy will be: |
|
|||||||||||||||||||||||
Altria Group |
Coca-Cola |
Imperial Brands |
Pernod Ricard |
Reckitt Benckiser |
||||||||||||||||||||
Anheuser-Busch InBev |
Diageo |
Japan Tobacco |
Philip Morris International |
Swedish Match |
||||||||||||||||||||
Carlsberg |
Heineken |
PepsiCo |
Procter & Gamble |
Unilever |
||||||||||||||||||||
EPS growth (15% current and 15% constant rates of exchange) |
|
30 |
4.5 |
|||||||||||||||||||||
5%–10% compound annual growth in adjusted diluted EPS over the performance period |
| |||||||||||||||||||||||
Adjusted revenue growth |
|
15 |
2.25 |
|||||||||||||||||||||
3%–5% compound annual growth over the performance period |
| |||||||||||||||||||||||
Growth in New Categories revenue |
|
15 |
2.25 |
|||||||||||||||||||||
20%–30% compound annual growth over the performance period |
| |||||||||||||||||||||||
Adjusted operating cash flow conversion ratio |
|
20 |
3 |
|||||||||||||||||||||
Ratio of 85%–95% over the performance period at current rates of exchange |
| |||||||||||||||||||||||
Total |
100 |
15 |
Base fee 1 £’000 |
Chair/Committee membership fees 1 £’000 |
Taxable benefits 2 £’000 |
Total remuneration £’000 |
|||||||||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||||||||
Chairman |
||||||||||||||||||||||||||||||||
Luc Jobin 3 (from 28 April 2021) |
523 |
96 |
9 |
26 |
20 |
16 |
552 |
138 |
||||||||||||||||||||||||
Richard Burrows (up to 28 April 2021) |
234 |
714 |
– |
– |
36 |
77 |
270 |
791 |
||||||||||||||||||||||||
Non-Executive Directors |
||||||||||||||||||||||||||||||||
Sue Farr |
97 |
96 |
27 |
26 |
– |
– |
124 |
122 |
||||||||||||||||||||||||
Karen Guerra |
97 |
29 |
27 |
8 |
– |
– |
124 |
37 |
||||||||||||||||||||||||
Dr Marion Helmes |
97 |
96 |
27 |
26 |
1 |
3 |
125 |
125 |
||||||||||||||||||||||||
Holly Keller Koeppel 4 |
97 |
96 |
54 |
53 |
– |
23 |
152 |
172 |
||||||||||||||||||||||||
Savio Kwan |
97 |
96 |
27 |
26 |
– |
10 |
124 |
132 |
||||||||||||||||||||||||
Dimitri Panayotopoulos |
138 |
124 |
54 |
53 |
1 |
3 |
193 |
180 |
||||||||||||||||||||||||
Darrell Thomas 5 |
104 |
– |
29 |
– |
– |
– |
133 |
– |
||||||||||||||||||||||||
Jerry Fowden (up to 31 March 2021) |
25 |
96 |
7 |
26 |
– |
3 |
32 |
139 |
||||||||||||||||||||||||
Total |
1,509 |
1,443 |
261 |
244 |
58 |
135 |
1,829 |
1,836 |
1. |
Committee memberships: |
2. |
Benefits: ‘walk-in’ medical services £15,000 (2020: £16,000); the use of a Company driver £11,000 (2020: £48,000); home and personal security in the UK and Ireland £10,000 (2020: £11,000); and commuting flights to London (2020: £2,000). The Chairman’s benefits in respect of Luc Jobin in 2021 comprised: health insurance and ‘walk-in’ medical services £8,000; the use of a Company driver £1,000; and commuting flights to London £3,000. The benefits for the other Non-Executive Directors principally comprised travel-related expenses incurred in connection with individual and/or accompanied attendance at certain business functions and/or events and ‘walk-in’ medical services. The figures shown are grossed-up amounts (as appropriate) as, in line with the UK market, it is the normal practice for the Company to pay the tax that may be due on any benefits. |
3. |
Pension: |
4. |
Deferred Compensation Plan for Directors of Reynolds American Inc. (DCP): |
5. |
Darrell Thomas was appointed to the Board on 7 December 2020, with the first fee being paid to him in January 2021. |
6. |
The Non-Executive Directors’ fees structure 2021 is set out in the table overleaf. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Fees from 1 May 2021 £ |
Fees to 30 April 2021 £ |
|||||||
Base fee |
96,850 |
96,850 |
||||||
Senior Independent Director – supplement |
41,500 |
41,500 |
||||||
Audit Committee: Chairman |
42,000 |
40,950 |
||||||
Audit Committee: Member |
14,400 |
14,100 |
||||||
Nominations Committee: Chairman |
– |
– |
||||||
Nominations Committee: Member |
12,800 |
12,500 |
||||||
Remuneration Committee: Chairman |
42,000 |
40,950 |
||||||
Remuneration Committee: Member |
14,400 |
14,100 |
Outstanding scheme interests 31 Dec 2021 |
||||||||||||||||||||||||
Ordinary shares held at 31 Dec 2021 |
Unvested awards subject to performance measures and continued employment (LTIP) |
Unvested awards subject to continued employment only (DSBS) |
Unvested interests (Sharesave) |
Total ordinary shares subject to outstanding scheme interests |
Total of all interests in ordinary shares at 31 Dec 2021 |
|||||||||||||||||||
Executive Directors |
||||||||||||||||||||||||
Jack Bowles 1,2 |
239,214 |
629,975 |
119,862 |
– |
749,837 |
989,051 |
||||||||||||||||||
Tadeu Marroco 2,3 |
78,126 |
265,012 |
56,348 |
890 |
322,250 |
400,376 |
||||||||||||||||||
Chairman |
||||||||||||||||||||||||
Richard Burrows (up to 28 April 2021) |
19,000 |
19,000 |
||||||||||||||||||||||
Luc Jobin 4 |
90,236 |
90,236 |
||||||||||||||||||||||
Non-Executive Directors |
||||||||||||||||||||||||
Sue Farr |
– |
– |
||||||||||||||||||||||
Jerry Fowden (up to 31 March 2021) 4 |
10,000 |
10,000 |
||||||||||||||||||||||
Karen Guerra |
5,000 |
5,000 |
||||||||||||||||||||||
Dr Marion Helmes |
4,500 |
4,500 |
||||||||||||||||||||||
Holly Keller Koeppel 5 |
– |
– |
||||||||||||||||||||||
Savio Kwan |
8,238 |
8,238 |
||||||||||||||||||||||
Dimitri Panayotopoulos |
3,300 |
3,300 |
||||||||||||||||||||||
Darrell Thomas 4 |
2,600 |
2,600 |
1. |
Jack Bowles: |
2. |
Changes from 31 December 2021: Non-Executive Directors. |
3. |
Tadeu Marroco: |
4. |
American Depositary Shares (ADSs): |
5. |
Deferred Stock Units (DSUs): |
BAT Annual Report and Form 20-F 2021 |
No. of eligible ordinary shares held at 31 Dec 2021 |
Value of eligible ordinary shares held at 31 Dec 2021 1 £m |
Actual percentage (%) of base salary at 31 Dec 2021 |
Shareholding requirements (% of base salary 31 Dec 2021) |
Compliant with shareholding requirement |
||||||||||||||||
Jack Bowles |
301,919 |
8,255 |
623% |
500% |
Yes |
|||||||||||||||
Tadeu Marroco |
106,653 |
2,916 |
363% |
400% |
2 |
See note 2 |
1. |
Value of ordinary shares shown above: mid-market share price on 31 December 2021 of 2,734p. |
2. |
Tadeu Marroco was appointed as an Executive Director on 5 August 2019, prior to which the shareholding requirement for Mr Marroco was set at a lower percentage of salary with Mr Marroco being compliant with required percentage. Under the Directors’ Remuneration Policy, Executive Directors may generally sell a maximum of up to 50% of any shares vesting (after tax) under the Company’s share plans until the threshold for shareholding requirements has been met and Mr Marroco is compliant with this policy requirement. In line with the Directors’ Remuneration Policy, the shareholding requirement is equal to the value of the same multiple of salary at which LTIP awards are made to that Director, as such the shareholding requirement for Mr Marroco increased to 400% in 2020. |
3. |
Meeting the guidelines: |
4. |
Waiver of compliance with guidelines: |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Plan |
At 1 Jan 2021 |
Awarded in 2021 |
Lapsed in 2021 |
Exercised/ released in 2021 |
At 31 Dec 2021 |
Exercise price (p) |
End of performance period |
Date from which exercisable or shares released |
||||||||||||||||||||||||||||
Jack Bowles |
LTIP |
1 |
43,785 |
– |
20,054 |
23,731 |
– |
2,802 |
31 Dec 20 |
26 Mar 21 |
||||||||||||||||||||||||||
LTIP |
2 |
176,532 |
– |
– |
– |
176,532 |
– |
31 Dec 21 |
28 Mar 24 |
|||||||||||||||||||||||||||
LTIP |
3 |
223,129 |
– |
– |
– |
223,129 |
– |
31 Dec 22 |
30 Mar 25 |
|||||||||||||||||||||||||||
LTIP |
3 |
– |
230,314 |
– |
– |
230,314 |
– |
31 Dec 23 |
29 Mar 26 |
|||||||||||||||||||||||||||
DSBS |
12,064 |
– |
– |
12,064 |
– |
– |
31 Dec 20 |
26 Mar 21 |
||||||||||||||||||||||||||||
DSBS |
26,192 |
– |
– |
– |
26,192 |
– |
31 Dec 21 |
28 Mar 22 |
||||||||||||||||||||||||||||
DSBS |
53,618 |
– |
– |
– |
53,618 |
– |
31 Dec 22 |
30 Mar 23 |
||||||||||||||||||||||||||||
DSBS |
– |
40,052 |
– |
– |
40,052 |
– |
31 Dec 23 |
29 Mar 24 |
||||||||||||||||||||||||||||
Sharesave |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||
Sharesave |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||
Tadeu Marroco |
LTIP |
1 |
28,248 |
– |
12,938 |
15,310 |
– |
2,787 |
31 Dec 20 |
26 Mar 21 |
||||||||||||||||||||||||||
LTIP |
2 |
36,057 |
– |
– |
– |
36,057 |
– |
31 Dec 21 |
28 Mar 22 |
|||||||||||||||||||||||||||
LTIP |
3 |
113,938 |
– |
– |
– |
113,938 |
– |
31 Dec 22 |
30 Mar 25 |
|||||||||||||||||||||||||||
LTIP |
3 |
– |
115,017 |
– |
– |
115,017 |
– |
31 Dec 23 |
29 Mar 26 |
|||||||||||||||||||||||||||
DSBS |
7,783 |
– |
– |
7,783 |
– |
– |
31 Dec 20 |
26 Mar 21 |
||||||||||||||||||||||||||||
DSBS |
13,233 |
– |
– |
– |
13,233 |
– |
31 Dec 21 |
28 Mar 22 |
||||||||||||||||||||||||||||
DSBS |
24,388 |
– |
– |
– |
24,388 |
– |
31 Dec 22 |
30 Mar 23 |
||||||||||||||||||||||||||||
DSBS |
– |
18,727 |
– |
– |
18,727 |
– |
31 Dec 23 |
29 Mar 24 |
||||||||||||||||||||||||||||
Sharesave |
266 |
– |
266 |
– |
– |
– |
1 May 21 |
1 May 21 |
||||||||||||||||||||||||||||
Sharesave |
– |
433 |
– |
– |
433 |
– |
1 May 24 |
1 May 24 |
||||||||||||||||||||||||||||
Sharesave |
624 |
– |
– |
– |
624 |
– |
1 May 25 |
1 May 25 |
1. |
Details of the performance condition for the LTIP awards granted in 2018 (which vested during 2021), and of achievement against that condition in the period to 31 December 2020, were set out in the Annual Report on Remuneration for the year ended 31 December 2020. |
2. |
Details of the performance condition attached to 2019 LTIP awards, and of achievement against that condition in the period to 31 December 2021, are set out on page 138. |
3. |
Details of the performance condition attached to 2020 and 2021 LTIP awards are set out on page 148. |
Plan |
Ordinary shares awarded |
Price per ordinary share at award 1 |
Face value of award £’000 |
Proportion of award vesting for threshold performance (%) |
Performance period |
Date from which exercisable or shares released |
||||||||||||||||||||||||||
Jack Bowles |
LTIP |
2 |
230,314 |
2,794p |
6,435 |
15 |
2021–2023 |
29 Mar 26 |
||||||||||||||||||||||||
DSBS |
40,052 |
n/a |
n/a |
29 Mar 24 |
||||||||||||||||||||||||||||
Tadeu Marroco |
LTIP |
2 |
115,017 |
2,794p |
3,214 |
15 |
2021-2023 |
29 Mar 26 |
||||||||||||||||||||||||
DSBS |
18,727 |
n/a |
n/a |
29 Mar 24 |
1. |
The price per ordinary share is the price used to determine the number of ordinary shares subject to the awards, which is calculated as the average of the closing mid-market price of an ordinary share over the three dealing days preceding the date of grant. |
2. |
Details of the performance condition attached to these LTIP awards are set out on page 148. |
BAT Annual Report and Form 20-F 2021 |
LTIP awards granted in 2020 |
LTIP awards granted in 2021 |
|||||||||||||||||||||||||||
1 January 2020–31 December 2022 |
1 January 2021–31 December 2023 |
|||||||||||||||||||||||||||
Weighting |
Threshold |
Maximum |
Weighting |
Threshold |
Maximum |
|||||||||||||||||||||||
Relative TSR Ranking against a peer group of international FMCG companies |
20% |
At median, 3% of award vests |
At upper quartile, 20% of award vests |
20% |
At median, 3% of award vests |
At upper quartile, 20% of award vests |
||||||||||||||||||||||
EPS growth at current rates of exchange Compound annual growth in adjusted diluted EPS measured at current rates of exchange |
20% |
At 5% CAGR, 3% of award vests |
At 10% CAGR, 20% of award vests |
20% |
At 5% CAGR, 3% of award vests |
At 10% CAGR, 20% of award vests |
||||||||||||||||||||||
EPS growth at constant rates of exchange Compound annual growth in adjusted diluted EPS measured at constant rates of exchange |
20% |
At 5% CAGR, 3% of award vests |
At 10% CAGR, 20% of award vests |
20% |
At 5% CAGR, 3% of award vests |
At 10% CAGR, 20% of award vests |
||||||||||||||||||||||
Adjusted revenue growth Compound annual growth measured at constant rates of exchange |
20% |
At 3% CAGR, 3% of award vests |
At 5% CAGR, 20% of award vests |
20% |
At 3% CAGR, 3% of award vests |
At 5% CAGR, 20% of award vests |
||||||||||||||||||||||
Adjusted operating cash flow conversion ratio Measured at current rates of exchange, as a percentage of APFO |
20% |
At 85%, 3% of award vests |
At 95%, 20% of award vests |
20% |
At 85%, 3% of award vests |
At 95%, 20% of award vests |
Item |
2021 £m |
2020 £m |
% change | |||||||
Remuneration of Group employees 1 |
2,717 |
2,744 |
(1%) | |||||||
Remuneration of Executive Directors |
10 |
8 |
25% | |||||||
Remuneration of Chairman and Non-Executive Directors |
2 |
2 |
- | |||||||
Total dividends 2 |
4,904 |
4,745 |
3% |
1. |
Total remuneration of Group employees: |
2. |
Total dividends: |
Satisfaction of Company share plan awards in accordance with the Investment Association’s Principles of Remuneration |
New ordinary shares issued by the Company during the year ended 31 December 2021 | |
– by the issue of new ordinary shares; – ordinary shares issued from treasury only up to a maximum of 10% of the Company’s issued share capital in a rolling 10-year period;– within this 10% limit, the Company can only issue (as newly issued ordinary shares or from treasury) 5% of its issued share capital to satisfy awards under discretionary or executive plans; and – the rules of the Company’s Deferred Share Bonus Scheme do not allow for the satisfaction of awards by the issue of new ordinary shares. |
– 26,191 ordinary shares issued by the Company in relation to the Sharesave Scheme; – a total of 956,857 Sharesave Scheme options over ordinary shares in the Company were outstanding at 31 December 2021, representing 0.04% of the Company’s issued share capital (excluding shares held in treasury); and – options outstanding under the Sharesave Scheme are exercisable until 1 March 2027 at option prices ranging from 2,076p to 4,056p. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Remuneration Committee current members |
Dimitri Panayotopoulos (Chairman) |
Sue Farr |
Dr Marion Helmes |
Savio Kwan |
– |
determining and proposing the Directors’ Remuneration Policy (covering salary, benefits, performance-based variable rewards and retirement benefits) for shareholder approval; |
– |
determining, within the terms of the approved Directors’ Remuneration Policy, the specific remuneration packages for the Chairman and the Executive Directors, on appointment, on review and, if appropriate, any compensation payment due on termination of appointment; |
– |
the setting of targets applicable for the Company’s performance-based variable reward schemes and determining achievement against those targets, exercising discretion where appropriate and as provided by the applicable scheme rules and the Directors’ Remuneration Policy; |
– |
reviewing Group workforce remuneration and related policies, and the alignment of incentives and rewards with Group culture, taking these into account when setting the policy for Executive Director remuneration. Providing feedback to the Board on workforce reward, incentives and conditions applicable across the Group and supporting the Board’s monitoring of the Group’s culture and its alignment with the Group’s purpose, values and strategy; |
– |
setting remuneration for members of the Management Board and the Company Secretary; and |
– |
monitoring and advising the Board on any major changes to the policy on employee benefit structures for the Group. |
![]() |
For the Remuneration Committee’s terms of reference see: | |
www.bat.com/governance |
Name |
Member since |
Attendance/ Eligible to attend Scheduled |
Attendance/ Eligible to attend Ad Hoc |
|||||||||
Dimitri Panayotopoulos 1(b) |
2015 |
4/4 |
2/3 |
|||||||||
Sue Farr |
2016 |
4/4 |
3/3 |
|||||||||
Karen Guerra 2(b) |
2020 – 2021 |
1/1 |
2/2 |
|||||||||
Marion Helmes |
2019 |
4/4 |
3/3 |
|||||||||
Savio Kwan |
2016 |
4/4 |
3/3 |
1. |
Number of meetings in 2021: |
2. |
Membership: Non-Executive Directors in accordance with the UK Corporate Governance Code 2018 Provisions 10 and 32 and applicable NYSE listing standards; and (b) Karen Guerra stepped down from the Committee with effect from 1 April 2021. |
3. |
Other attendees: |
4. |
PwC LLP: |
5. |
Meridian Compensation Partners: |
BAT Annual Report and Form 20-F 2021 |
Independent external advisers |
Services provided to the Remuneration Committee |
Fees |
Other services provided to the Company | |||
PwC LLP 1,2 |
General advice on remuneration matters including: market trends and comparator group analysis; policy review and shareholder engagement perspectives; and independent measurement of the relative TSR performance conditions. |
2021: £165,946 2020: £126,013 |
Tax, corporate finance and consulting services to Group companies worldwide excluding the US. | |||
Meridian 2 |
General advice on remuneration matters including market trends, shareholder engagement perspectives and comparator group analysis. |
2021: $72,974 2020: $49,537 |
Consulting services to Group companies in the US. | |||
Herbert Smith Freehills LLP |
Advice in respect of share plan regulations is provided to the Company and is available to the Remuneration Committee. |
Fees relate to advice given to the Company. |
General corporate legal and tax advice principally in the UK. | |||
KPMG LLP |
Specified procedures to assist in the assessment of the calculations of the STI bonus and LTI outcomes and future targets. |
2021: £29,000 2020: £28,000 |
Audit and tax services and other non-audit services. |
1. |
PwC LLP also provides other international services and international tax advice such as tax return services including for certain globally mobile directors. The Remuneration Committee advisory team is not involved in any other services PwC provides to the Group. |
2. |
The fees payable to PwC and Meridian are based on annual fixed fees for specified services with anything outside this scope being charged on a time and material basis. |
– |
reviewed salaries for the Executive Directors to take effect from 1 April 2021, taking into account market positioning and the level of salary increases awarded to UK employees. A programme of shareholder engagement on executive remuneration was conducted, led by the Committee Chairman, and the Committee considered feedback from shareholders (discussed at page 131); |
– |
reviewed salaries for members of the Management Board and the Company Secretary from 1 April 2021, taking into account market positioning and the level of salary increases awarded to UK employees; |
– |
assessed the achievement against the targets for the 2020 STI award and set the STI targets for 2021; |
– |
reviewed updates on performance against the 2021 STI target measures and for outstanding LTIP awards; |
– |
assessed the achievement against the performance conditions for the vesting of the 2018 LTIP award, determined the contingent level of LTIP awards for March 2021 and reviewed the associated performance conditions; |
– |
assessed the achievement against the targets for the 2020 Share Reward Scheme and set the targets for the 2021 award; |
– |
reviewed and assessed the target ranges across STI and LTI plans to ensure there is an appropriate level of stretch within the target range to drive performance for the benefit of shareholders; |
– |
reviewed the Annual Statement and the Annual Report on Remuneration for the year ended 31 December 2020 prior to its approval by the Board and subsequent proposal to shareholders at the Company’s AGM on 28 April 2021; |
– |
reviewed the 2021 AGM voting results relating to remuneration resolutions, market trends in the context of that annual general meeting season and corporate governance developments in the UK and the US; |
– |
monitored the continued application of the Company’s shareholding guidelines for the Executive Directors and members of the Management Board; and |
– |
reviewed the Remuneration Committee’s effectiveness following the Board and Committee evaluation process, discussed further on pages 114 to 115. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
reviewed the terms of appointment and associated remuneration, and terms of termination of employment, in connection with Management Board changes during the year; |
– |
reviewed elements of the Group’s workforce remuneration strategy and their alignment with Executive Directors’ remuneration and their alignment with the Group’s culture, with specific focus on the reward architecture for management grade employees across the Group; |
– |
approved changes to the methodology for calculating the share of market read for the STI volume share metric in a limited number of markets, based on the local market environment and reporting capabilities; and |
– |
reviewed the UK gender pay report for 2020 for applicable UK Group companies, prior to publication in March 2021. |
2021 AGM |
||||
Percentage for |
61.71 |
|||
Votes for (including discretionary) |
1,091,216,857 |
|||
Percentage against |
38.29 |
|||
Votes against |
676,947,189 |
|||
Total votes cast excluding votes withheld |
1,768,164,046 |
|||
Votes withheld ³ |
16,119,810 |
|||
Total votes cast including votes withheld |
1,784,283,856 |
2019 AGM |
||||
Percentage for |
92.63 |
|||
Votes for (including discretionary) |
1,641,331,721 |
|||
Percentage against |
7.37 |
|||
Votes against |
130,661,885 |
|||
Total votes cast excluding votes withheld |
1,771,993,606 |
|||
Votes withheld ³ |
1,820,757 |
|||
Total votes cast including votes withheld |
1,773,814,363 |
1. |
Directors’ Remuneration Report: |
2. |
Directors’ Remuneration Policy: |
3. |
Votes withheld: |
BAT Annual Report and Form 20-F 2021 |
– |
reward, as an overriding objective, the delivery of the Group’s long-term strategy in a manner which is simple, straightforward and understandable and which is aligned with shareholders’ interests; |
– |
structure a remuneration package that is appropriately positioned relative to the market and comprises core fixed elements and performance-based variable elements; |
– |
design the fixed elements of pay (comprising base salary, pension and other benefits) to recognise the skills and experience of our Executive Directors and to ensure current and future market competitiveness in attracting talent; |
– |
design the variable elements of pay (provided via two performance-based incentive schemes: a short-term incentive scheme delivered through a combination of a cash element and a deferral element, and a long-term incentive scheme), to be both transparent and stretching and to support, motivate and reward the successful delivery of the Group’s long-term strategy and growth for shareholders on a sustainable basis; |
– |
ensure that reputational, behavioural and other risks that can arise from target-based incentive plans are identified and mitigated; |
– |
maintain an appropriate balance between fixed pay and the opportunity to earn performance-related remuneration with immediate and deferred elements, such that the majority of the Executive Directors’ total remuneration package is delivered in BAT shares; |
– |
ensure that the performance-based elements form, at maximum opportunity, between 80% and 90% of the Executive Directors’ total remuneration packages; |
– |
ensure, through its annual review, that the Remuneration Policy is both rigorously applied and remains aligned with the Company’s purpose, values and strategy and the need to promote the long-term success of the Company; and |
– |
ensure that remuneration arrangements are transparent and promote effective engagement with shareholders and the workforce. |
Policy Element |
Change in Policy |
Page Number | ||
Short-Term Incentive (STI), performance measures |
Underlying policy is unchanged, however alternative measures and weightings have been selected for awards to be made in 2022. |
155 | ||
Long-Term Incentive Plan (LTIP), performance measures |
Underlying policy is unchanged, however alternative measures and weightings have been selected for awards to be made in 2022. |
156 | ||
Malus and clawback |
Updated and expanded to reflect market best practice |
157 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Base salary |
||
How the element supports the Company’s strategic objectives |
To attract and retain high-calibre individuals to deliver the Company’s strategic plans and to offer market-competitive levels of guaranteed cash to reflect an individual’s skills, experience and role within the Company. | |
Operation of the element 2022 Policy: |
Base salary Salaries are reviewed taking into account factors including individual performance as well as appropriate market data including general UK pay trends and a company size and complexity model based on a Pay Comparator Group*. The Committee will review and potentially amend the constituents of the Pay Comparator Group from time to time. * Current constituents of the pay comparator group are: Accenture, Altria Group, Anheuser-Busch Inbev, AstraZeneca, Bayer, Coca-Cola Company, Colgate-Palmolive, Danone, Diageo, GlaxoSmithKline, Heineken, Imperial Brands, Johnson & Johnson, Kraft Heinz, L’Oréal, LVMH, Microsoft, Mondelēz International, Nestlé, Nike, Novartis, PepsiCo, Philip Morris International, Procter & Gamble, Reckitt Benckiser, salesforce, Siemens, Unilever, Vodafone. | |
Maximum potential value 2022 Policy: |
Annual increases for Executive Directors’ base salaries in the normal course will generally be in the range of the increases in the base pay of other UK-based employees in the Group and will not exceed 10% per annum.The salary of a recently appointed Executive Director as he or she progresses in a role may exceed the top of the range of the salary increases for UK-based employees where the Committee considers it appropriate to reflect the accrual of experience. A significant change in responsibilities or material change in role may be reflected in an above average increase (which may exceed 10%) in salary. | |
Benefits |
||
How the element supports the Company’s strategic objectives |
To provide market-competitive benefits consistent with the role which: – attract and retain high-calibre individuals to deliver the Company’s strategic plans; and – recognise that such talent is global in source and that the availability of certain benefits (e.g. relocation, repatriation, taxation compliance advice) will from time to time be necessary to avoid such factors being an inhibitor to accepting the role. | |
Operation of the element 2022 Policy: |
The Company currently offers the following contractual benefits to Executive Directors: a car or car allowance use of a car and driver for personal and business use; employment tax advice tax equalisation payments private medical insurance, general practitioner ‘walk-in’ medical servicespersonal life and accident insurance housing education Other benefits may include the Executive Directors’ and their partners’ attendance at hospitality or similar functions, and the provision of services and benefits which may be treated as benefits for tax purposes, such as the provision of home security and the reimbursement of expenses incurred in connection with their duties. Other benefits not identified above may be offered if, in the Committee’s view, these are necessary in order to remain aligned with market practice. With the exception of the car or car allowance, in line with the UK market and the practice followed for all the Group’s other UK employees, it is also practice to pay the tax that may be due on benefits. The Company provides Directors and Officers liability insurance (D&O) and an indemnity to Directors to cover costs and liabilities incurred in the execution of their duties. |
BAT Annual Report and Form 20-F 2021 |
Maximum potential value 2022 Policy: |
The maximum potential values are based on market practice for individuals of this level of seniority, with any tax on benefits paid by the Company in addition. The maximum annual value (subject to periodic inflation-related increases where applicable) that can be offered for the following benefits is: – car allowance – use of a car and company driver for personal and business use – the cost of private medical insurance – GP ‘walk-in’ medical services located close to the Group’s headquarters in London– personal life and accident insurance – employment tax advice tax equalisation payments – housing and education allowances | |
Pensions |
||
How the element supports the Company’s strategic objectives |
To provide competitive post-retirement benefit arrangements which are aligned to the wider workforce whilst also recognising the external environment in the context of attracting and retaining senior high calibre individuals to deliver the Group’s long-term strategy. | |
Operation of the element 2022 Policy: |
Defined contribution benefits Executive Directors are eligible to receive a pension benefit equivalent to 15% of base salary, which the Committee may determine to provide as a contribution into the British American Tobacco UK Pension Plan (the “Plan”) (or a similar defined contribution arrangement from time to time) or as a gross cash sum paid in lieu thereof. The level of contribution in the Plan is restricted to take into account the annual allowance, and the individual may elect to accumulate any balance in the Defined Contribution Unfunded Unapproved Retirement Benefits Scheme (“DC UURBS”) or receive the balance as a gross cash sum. The DC UURBS closed to new entrants on 31 March 2021. Operation The pension arrangements operate in accordance with the rules of the applicable scheme, including in respect of any benefits payable in the event of death or on early retirement. Details of the Executive Directors’ accrued pension benefits are provided in the Annual Report on Remuneration on page 139. | |
Maximum potential value |
The maximum annual contribution in the defined contribution section of the Pension Fund is 15% of base salary in alignment with the wider workforce. Excess benefits (whether accrued in the DC UURBS or paid as a cash sum) are subject to this same limit. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Short-term incentives: International Executive Incentive Scheme (IEIS) | ||
How the element supports the Company’s strategic objectives |
To incentivise the attainment of corporate targets aligned to the Group’s strategic objectives on an annual basis, with a deferred element to ensure alignment with shareholders’ interests. To ensure, overall, a market-competitive package to attract and retain high-calibre individuals to deliver the Group’s long-term strategy. | |
Operation of the element 2022 Policy: |
The IEIS is awarded 50% in cash 50% in shares Deferred Share Bonus Scheme (DSBS) The deferred shares normally vest after three years additional dividend equivalent shares. IEIS cash payments are subject to clawback provisions, and the deferred shares element of the IEIS is subject to updated malus and clawback provisions, as described on page 157. | |
Performance assessment 2022 Policy: |
The IEIS is assessed against a range of performance measures. The Committee determines performance measures, weightings and targets annually each year. The Remuneration Committee will review the formulaic outcome of the incentive measures to ensure it reflects the underlying performance of the business and the experience of shareholders over the performance period. The Committee retains the ability to adjust any formulaic outcomes if considered appropriate. Any such adjustments will be fully disclosed in the relevant Directors’ Remuneration Report. In cases of identified poor individual performance, the corporate result may be reduced by up to 50%. Performance measures for 2021 can be found on page 137 and for 2022 on page 143. | |
Maximum potential value and payment and threshold 2022 Policy: |
Chief Executive – Maximum 250% of salary; on-target 125% of salary.Other Executive Directors – Maximum 190% of salary; on-target 95% of salary.The payout at threshold is 0% for each performance measure. |
BAT Annual Report and Form 20-F 2021 |
Long-term incentives: Long-Term Incentive Plan (LTIP) | ||
How the element supports the Company’s strategic objectives |
To incentivise individuals to deliver the Group’s long-term strategy and promote the long-term success of the Company, and facilitate the appointment and retention of senior high-calibre talent. To put in place a combination of measures with appropriately stretching targets around the long-term plan that provides a balance relevant to the Company’s business and market conditions as well as providing alignment between Executive Directors’ and shareholders’ interests. | |
Operation of the element 2022 Policy: |
LTIP awards are annual awards over shares that vest only to the extent that: 1. the performance condition is satisfied at the end of the three-year performance period 2. an additional vesting period of two years the LTIP Extended Vesting Period Participants may receive a dividend equivalent which is delivered in additional shares on vesting at the end of the LTIP Extended Vesting Period to the extent to which awards vest. LTIP awards may be delivered in any form provided under the LTIP rules as approved by shareholders. Awards are subject to updated malus and clawback provisions, as described on page 157. | |
Performance assessment, measures and weighting 2022 Policy: |
The Committee sets performance measures and targets for each LTIP grant. Measures, weightings and performance conditions will be selected based on the strategic priorities for BAT at that time. The performance measures and weightings for the LTIP grant in 2022 will be: 1. Relative total shareholder return (TSR) (20%) 2. Growth in New Categories revenue (15%) 3. Adjusted diluted earnings per share (ESP) growth (30%) at current rates (15%) at constant rates (15%) 4. Adjusted revenue growth (15%) 5. Adjusted operating cash flow conversion ratio (20%) The Remuneration Committee will engage with shareholders in advance if it proposes significant changes to the LTIP performance measures. The Remuneration Committee will review the formulaic outcome of the incentive measures to ensure it reflects the underlying performance of the business and the experience of shareholders over the performance period. The Committee retains the ability to adjust any formulaic outcomes if considered appropriate. Any such adjustments will be fully disclosed in the relevant Directors’ Remuneration report. | |
Maximum potential value and payment at threshold |
Maximum award of shares The payout for threshold performance |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
All-employee share schemes | ||
How the element supports the Company’s strategic objectives |
Executive Directors are eligible to participate in the Company’s all-employee share schemes, in the same way as the wider workforce, which are designed to incentivise employees by giving them an opportunity to build shareholdings in the Company. | |
Operation of the element 2022 Policy: |
The Company currently operates two all-employee share schemes: the Sharesave Scheme tax-advantaged savings-related share option scheme, and the Share Incentive Plan (SIP) tax-advantaged plan operated by the Company to allow eligible employees to purchase shares in the Company (the Partnership Plan Share Reward Scheme | |
Maximum potential value 2022 Policy: |
Executive Directors are subject to the same limits on participation as other employees, as defined by the applicable statutory provisions. Currently, these limits are monthly savings under the Sharesave Scheme of £500 per month, and annual share purchases under the Partnership Plan of £1,800 and annual share awards under the Share Reward Scheme of £3,600. | |
Shareholding requirements | ||
How the element supports the Company’s strategic objectives |
To strengthen the alignment between the interests of the Executive Directors and those of the shareholders by requiring Executive Directors to build up a high level of personal shareholding in the Company. To ensure long-term alignment through the operation of post-employment shareholding requirements. | |
Operation of the element and performance metrics used 2022 Policy: |
Executive Directors are required to hold shares in the Company: – during service as a Director, equal to the value of the same multiple of salary at which LTIP awards are made to that Director; and – after ceasing service as a Director during the period until the second anniversary of cessation of employment with the Group, of a value equal to 100% of the shareholding requirement that applied whilst a Director. In order to monitor and enforce the above provisions, former Executive Directors are required to hold their shares in a nominee account in respect of which a sale restriction applies to shares held to comply with the requirements. Those Executive Directors who do not meet the shareholding requirements may generally sell a maximum of up to 50% of any shares vesting (after tax) until the threshold for the shareholding requirements has been met. The estimated notional net-of-tax A waiver of compliance with the shareholding requirements is permitted at the discretion of the Committee in circumstances which the Committee considers to be exceptional. |
1. |
The Committee reserves the right to make any remuneration payments where the terms were agreed prior to an individual being appointed an Executive Director of the Company or prior to the approval and implementation of the Remuneration Policy (including, for the avoidance of doubt, pursuant to the current Remuneration Policy). This includes the achievement of the applicable performance conditions for Executive Directors who are eligible to receive payment from any award made prior to the approval and implementation of the Remuneration Policy. |
2. |
The Company recognises the opportunities and benefits that accrue to the Company and its Executive Directors who undertake non-executive roles. Consequently, an Executive Director may, with the permission of the Board, undertake a single external appointment and the Executive Director may retain the fees from such appointment. |
3. |
Malus and clawback |
Malus and Clawback provisions apply to DSBS and LTIP awards at any time before or after the vesting of a share award or at any time after the payment of IEIS cash element where it is determined that the participant: (1) committed misconduct; (2) caused a material loss for any Group company as a result of (a) reckless, negligent or wilful actions or (b) inappropriate behaviour or behaviour that is not aligned with corporate values; (3) contributed to serious reputational damage of any Group company or one of its business units, in each case prior to the vesting of the relevant award or payment of the bonus. |
Where the Committee determines that these provisions are to be applied, the participant may be required to repay up to the excess value which was paid or vested. This repayment may also be effected by the number of shares subject to the award being reduced and/or by a reduction in other cash or share-based awards held by the participant. |
4. |
The operation of the remuneration policy for employees below Board level is discussed on pages 163 and 164. |
BAT Annual Report and Form 20-F 2021 |
Chief Executive |
Finance and Transformation Director | |||||
Fixed remuneration |
Salary: £1,325,610 (effective 1 Jan 2022) |
Salary: £803,400 (effective 1 Jan 2022) | ||||
Pension: 15% of salary |
Pension: 15% of salary | |||||
Benefits: £320,000 (illustrative based |
Benefits: £100,000 (illustrative based on | |||||
on 2021 figure) |
2021 figure) | |||||
STI (IEIS) |
250% |
190% | ||||
LTI (LTIP) |
500% |
400% | ||||
Minimum |
Fixed remuneration only: |
No IEIS payout; no vesting under LTIP |
||||
On-target |
Fixed remuneration, plus: |
50% IEIS payout; threshold vesting under the LTIP | ||||
Maximum |
Fixed remuneration, plus: |
100% IEIS payout; 100% vesting under the LTIP | ||||
Maximum plus 50% share price growth |
Fixed remuneration, plus: |
All elements are the same as the maximum but assuming 50% share price appreciation during relevant performance period of LTIP |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
to determine performance measures, weightings and targets annually for the STI and to set performance measures and targets for each LTIP grant based on the strategic priorities of BAT at that time. |
– |
to alter performance conditions if events happen which cause the Committee to determine that the performance conditions are no longer a fair measure of the Company’s performance, or to take account of legal changes or to obtain or retain favourable tax, regulatory or exchange control treatment or in the event that it considers it fair and reasonable to do so, provided that the revised target is, in the opinion of the Committee, not materially less challenging than was intended in setting the original condition. |
– |
to exercise available discretions in connection with any termination of employment or change of control or similar event. |
– |
to determine whether awards under the LTIP are delivered as options or under any other form permitted under the LTIP rules as approved by shareholders, and in respect of operational matters not otherwise covered by this Policy, to operate the IEIS, DSBS and LTIP in accordance with their terms. |
– |
to operate the malus and clawback provisions. |
Principles In making an Executive Director appointment (whether an internal promotion or external appointee) the Committee will follow these principles. 2022 Policy: |
– British American Tobacco seeks to appoint senior, high-calibre managers. Many of its competitors for talent are based outside the UK. – To offer a package (both fixed salary, pension and performance-related remuneration) which is sufficiently competitive (but not excessively so) so that senior, high-calibre candidates can be appointed, and which is designed to promote the long-term success of the Company. – The Committee will consider the market, including the Pay Comparator Group, and by reference to other companies of equivalent size and complexity to ensure that it does not overpay. – Consideration will be given to relevant factors, such as the candidate’s skills, knowledge and experience and his or her current package and current location in determining the overall package. – Internal pay relativities and the terms and conditions of employment of the new and existing Executive Directors will be considered to ensure fairness between Executive Directors. | |
External appointment to role of Executive Director – additional considerations 2022 Policy: |
– Maximum incentive opportunities will be set in line with the Policy set out in the policy table. – The Committee will consider matching up to the maximum of the expected value of lost short or long-term incentive awards in order to facilitate the recruitment of that individual. – A replacement award would generally take the form of either a one-off award with a vesting period similar to the award given up (and, in the case of a replacement of a performance-based award, appropriate performance conditions) or a cash replacement payment in respect of an award that is within three months of vesting, although in either case the Committee may make other arrangements as it deems to be necessary.– Where appropriate, a replacement award will also be made subject to malus and clawback provisions. | |
Relocation British American Tobacco may provide appropriate relocation support. 2022 Policy: |
Relocation support of up to £200,000 may be provided in connection with recruitment. Examples of this support may include: shipment of goods; temporary accommodation; assistance to find accommodation; tax support services; and spouse or partner career counselling. Inbound relocation and shipment expenses are subject to clawback provisions. |
BAT Annual Report and Form 20-F 2021 |
Notice period – |
A period of notice to be given by either the Executive Director or the Company of 12 months. | |||||
Employed on a permanent contract, terminable by either party on one-year’s notice. |
The Company may require the Executive Director to be on garden leave during all or any part of the period of notice (whether given by the Executive Director or the Company). | |||||
Contractual terms – The contract includes obligations which could give rise to, or impact upon, remuneration and/or payments for loss of office. The provisions of the Company’s incentive arrangements applicable on a termination of employment are set out separately below. |
The primary obligations under the contract which may give rise to remuneration or payments for loss of office are as follows: – to terminate the contract only on the expiry of 12 months’ written notice or to make a payment in lieu of notice in respect of all, or the unexpired part, of the 12 months’ notice calculated based on: (1) salary at then current base pay; and (2) the cost to the Company of providing private medical expenses insurance and personal accident insurance (or the Company may, at its option, continue those benefits for the unexpired period of the notice). In determining the value of a payment in lieu of notice the Company shall not be required to reward failure on the part of the Executive Director and shall have regard to corporate governance standards at the termination date. The Company may, at its reasonable discretion, make the payment in lieu of notice in phased monthly or quarterly instalments and may determine that it should be reduced in accordance with the duty on the part of the Executive Director to mitigate their loss; and – to continue to pay the Executive Director’s salary and contractual benefits during any garden leave period. | |||||
In addition to the contractual rights to a payment on loss of office, the Executive Director may have statutory and/or common law rights to certain additional payments depending on the circumstances of the termination. | ||||||
Inspection of service contracts |
The dates of the latest service contracts are shown below: | |||||
Copies may be inspected at the Company’s registered office; these contracts are amended annually following the salary review. |
Executive Director |
Execution date of current service contract | ||||
|
||||||
Jack Bowles |
11 December 2018 (appointment as an Executive Director commenced | |||||
1 January 2019) | ||||||
Tadeu Marroco |
5 August 2019 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Policy on Payment for Loss of Office | ||||||
| ||||||
Treatment of awards under the share incentive schemes: International Executive Incentive Scheme (IEIS)/Deferred Share Bonus Scheme (DSBS) Long-Term Incentive Plan (LTIP) All-employee schemeThe release of awards is dependent on ‘leaver’ status and is at the discretion of the Committee. |
Plan |
‘Good leaver’ |
‘Other’ leaver scenarios | |||
| ||||||
IEIS and DSBS 2022 Policy: |
‘Good leavers’ are eligible for a bonus pro-rated for the period of employment during the year. Payments made during a notice period or after cessation may, at the discretion of the Committee, be made in cash only.Bonuses are assessed based on actual full-year performance and paid at the normal time. Deferred awards under the DSBS will vest upon termination of employment. |
No entitlement to a bonus but the Committee has the discretion to treat ‘other’ leavers in the same manner as ‘good leavers’; this discretion is not exercisable in the case of summary dismissal. Deferred awards under the DSBS will lapse unless the Committee, in its absolute discretion, decides otherwise. | ||||
| ||||||
LTIP 2022 Policy: |
Vesting occurs at the end of the LTIP Extended Vesting Period, subject to performance over the normal performance period and, where applicable, pro-rated for the period of employment during the performance period. |
Unvested awards, including any awards which are still subject to the LTIP Extended Vesting Period, will lapse unless the Committee, in its absolute discretion, decides otherwise. | ||||
| ||||||
All-employee share schemes |
Directors are treated in accordance with the scheme rules, in the same manner as applies to all employees. | |||||
|
The Committee retains discretion in deciding ‘good leaver’ status other than in cases of automatic ‘good leavers’ as set out in the applicable provisions of the DSBS and LTIP rules. The discretionary powers are intended to provide flexibility as Executive Directors may leave employment for a broad variety of reasons which may not necessarily fall within the prescribed category of ‘good leaver’. The Committee exercises its discretion by reference to guidelines which set out its agreed relevant factors to assist in the determination of a leaver’s status. |
||||
Guidelines |
||||
| ||||
Factors which may indicate that discretion may be exercised to treat as a ‘good leaver’ Resignation intending to cease work altogether. Resignation intending to take up a different occupation, such as a portfolio career. Delayed resignation from the Company to accommodate the Company’s plans or the demands of his or her current workload. Departure at the request of and/or with the agreement of the Company. |
Factors which may indicate that discretion may not be exercised Resignation from the Company to work for a competitor or to undertake a role otherwise acting in conflict with the interests of the Company. Resignation from the Company notwithstanding the Company’s plans and role demands. Termination or resignation in any circumstance involving factors such as misconduct or poor performance. | |||
In exercising its discretion, the Committee will also take into account the individual’s overall performance as well as their contribution to the Company during their total period of employment. | ||||
| ||||
Other – |
– Payment of legal fees incurred by an individual in connection with reviewing a settlement agreement on termination of employment. | |||
– Reimbursement of reasonable relocation costs of up to £200,000 where an Executive Director (and, where relevant, his or her family) had originally relocated to take up the appointment; this may include the shipment of personal goods and winding-up his or her affairs in the UK and the incidental costs incurred in doing so. | ||||
In certain circumstances, the Committee may approve new contractual arrangements with departing Executive Directors, potentially including (but not limited to) settlement, confidentiality, restrictive covenants and/or consultancy arrangements. These arrangements would only be entered into where the Committee believes that it is in the best interests of the Company and its shareholders to do so. | ||||
|
BAT Annual Report and Form 20-F 2021 |
Chairman and Non-Executive Directors |
||
Fees 2022 Policy: so fees may be delivered in cash or a combination of cash and shares |
The Chairman receives a single all-inclusive fee. Other Non-Executive Directors receive a base fee and may also receive additional fees in respect of committee membership and/or chairmanship. | |
The Committee considers annually the fee payable to the Chairman and to the other Non-Executive Directors. This process may take into account factors including the breadth and demands of the relevant role as well as comparison with fees paid by the same comparator group of companies used for setting the base salary of Executive Directors. The annual review does not necessarily result in a change to the fees. | ||
Fees may be paid in cash or a combination of cash and shares, with the proportion to be paid in shares in a year to be disclosed in the relevant Directors’ Remuneration Report. | ||
It is anticipated that any future aggregate increase in fees for the Chairman and other Non-Executive Directors will generally be in the range of the increases in the base pay of UK-based employees in the Group and will not exceed 10% per annum during the policy period.1 | ||
The Chairman and other Non-Executive Directors do not participate in any discussion on their own respective remuneration. | ||
Benefits, travel and related expenses 2022 Policy: |
Non-Executive Directors may be reimbursed for the cost of travel, accommodation and related expenses incurred in connection with their duties and are eligible to use general practitioner ‘walk-in’ services. The Non-Executive Directors and their partners may attend hospitality or similar functions. | |
Benefits for the Chairman may also include: the use of a Company driver; private medical insurance and personal accident insurance benefits; the provision of home and personal security; and assistance in relation to personal tax matters. | ||
If necessary, the Company will pay for independent professional advice in connection with the performance of duties as Non-Executive Directors. | ||
The Company provides D&O insurance and an indemnity to the Non-Executive Directors to cover costs and liabilities incurred in the execution of their duties. | ||
In instances where any benefits, reimbursements or expenses are classified by HMRC as a benefit to the Non-Executive Directors, it is also the practice of the Company to pay any tax due on any such benefits. | ||
Other 2022 Policy: |
There are no formal requirements or guidelines to hold shares in the Company. No Non-Executive Director is eligible to participate in the British American Tobacco share schemes, bonus schemes or incentive plans and no Non-Executive Director may be a member of any Group pension plan. |
1. |
Aggregate fees limit: the total annual fees of the Chairman and other Non-Executive Directors are limited to the overall aggregate annual limit authorised by shareholders with reference to the Company’s Articles of Association (currently £2,500,000). |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Competitive yet sustainable |
Equitably differentiated | |||
– Competitive remuneration, able to attract and retain talent. |
– Differentiated on clear and objective criteria – level, performance and experience. | |||
– Agility to meet changing generational needs. |
||||
– Responsible cost structure to support profit delivery. |
– Supported by unbiased processes and tools. | |||
Transparent |
Aligned to shareholder interests | |||
– Clear and inclusive policies, openly communicated. – Individual total reward package statements form part of regular annual cycle. |
– Competitive employment cost base and incentives that align the interests of employees with those of shareholders. |
– |
Salary is a key element of total remuneration for all employees. |
– |
Salary ranges for each grade are set by reference to external market data, and individual positioning within the set salary ranges will depend on level of experience, responsibility and individual performance. |
– |
Annual salary reviews typically take place in April each year. |
– |
Benefits provided to employees reflect local market practice and legislative requirements. |
– |
The benefits architecture for the Group includes core benefits (such as medical insurance and life insurance) and local statutory benefits and may be delivered as a combination of benefits in kind, cash allowance and flexible benefits. |
– |
Additional financial and non-financial rewards can be made for outstanding contributions to the business in exceptional circumstances. |
– |
Retirement benefits are provided to employees based on local market practice. |
– |
Under the UK Defined Contribution arrangements, the Company contributions for all UK employees is 10% of base salary rising to a maximum of 15% on a matching basis. For managers in senior management roles, the total contribution to the British American Tobacco UK Pension Plan (“Plan”) is automatically restricted to £4,000 per annum in line with the UK Government’s Tapered Annual Allowance. The balance of any Company contributions due above this £4,000 limit is paid as a cash allowance or, alternatively, paid into the Defined Contribution Unapproved Unfunded Retirement Benefits Scheme (DC UURBS). The DC UURBS closed to new entrants on 31 March 2021. Employees can choose to opt out of the restriction and have all the Company contribution paid into the Plan. |
BAT Annual Report and Form 20-F 2021 |
– |
Incentive opportunities for the IEIS participants are defined globally for each eligible grade. |
– |
A portion of any award receivable is deferred in BAT shares for three years, with the remaining portion paid in cash during the following year. |
– |
Dividend-equivalent payments on all unvested deferred shares are paid quarterly in cash via payroll. |
– |
Designed to mirror the basic construct of the IEIS with opportunity levels set locally. |
– |
Performance metrics aligned to those of the IEIS. |
– |
Opportunity levels are set locally and vary by grade. |
– |
Functional performance measures are incorporated into each scheme to ensure line of sight for participants. |
– |
Opportunity levels are defined globally for each eligible grade. |
– |
No performance conditions apply to awards. |
– |
Awards are typically granted in March of each year, and vest in full following the end of the three-year vesting period provided the participant remains an employee of the Group on the vesting date. |
– |
Dividend-equivalent payments are paid on shares vesting. |
– |
Consistent performance measures across all plan participants with opportunity levels defined globally for each eligible grade. |
– |
Awards vest only to the extent that the performance conditions are satisfied at the end of the three-year performance period. |
– |
Awards are typically granted in March of each year, and vest following the end of a three-year performance period. |
– |
Dividend-equivalent payments are paid on any shares vesting. |
– |
In the UK, all employees are eligible to participate in the Company’s all-employee share schemes (c. 2,500 employees) – the Partnership Share Scheme, the Sharesave Scheme and the Share Incentive Plan – all of which are HMRC-approved plans, which are designed to incentivise employees by giving them an opportunity to build shareholdings in the Company. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
- |
assessing and challenging Reynolds American’s budgeted revenue by examining externally derived publicly available data, including, broker and analyst reports, industry reports, media reports, macro-economic assumptions, academic and scientific studies, and regulatory changes; |
- |
challenging the budgeted revenue by comparing the historical projections to actual results to assess the Group’s ability to accurately forecast; |
- |
performing sensitivity analysis on the budgeted revenue to assess its impact on the Group’s determination that the fair values of the Reynolds American goodwill and trademarks with indefinite lives exceed their carrying value; |
- |
specifically for the proposed federal menthol ban, critically evaluating the Group’s assessment of the potential timing of the impact based on the FDA rulemaking process and recent litigations; |
- |
assessing and challenging the impact of the proposed menthol ban on the terminal growth rates used in the value-in-use based assessment of the recoverability of the goodwill allocated to the Reynolds American cash-generating unit and the Newport and Camel indefinite lived brands by comparing management’s projected brand retention rates against actual brand retention rates in similar markets where a menthol ban has been implemented; and |
- |
involving a valuation professional with specialized skills and knowledge, who assisted in independently developing a range of the discount rates using publicly available market data for comparable companies and comparing these rates to those utilized by Reynolds American to assess their reasonableness. |
- |
reading letters received directly from the Group’s external and internal legal counsel that evaluated the current status of the Canadian legal proceedings. We further inquired of internal legal counsel to evaluate their basis for conclusions in their letter; and |
- |
assessing relevant historical and recent judgments passed by the judicial court authorities in relation to the Canadian litigation and read the related Canadian court rulings in order to challenge Imperial’s interpretation of the Canadian legal proceedings. |
BAT Annual Report and Form 20-F 2021 |
For the years ended 31 December |
||||||||||||||
Notes |
2021 £m |
2020 £m |
2019 £m |
|||||||||||
Revenue 1 |
2 |
|||||||||||||
Raw materials and consumables used |
( |
) |
( |
) |
( |
) | ||||||||
Changes in inventories of finished goods and work in progress |
||||||||||||||
Employee benefit costs |
3 |
( |
) |
( |
) |
( |
) | |||||||
Depreciation, amortisation and impairment costs |
4 |
( |
) |
( |
) |
( |
) | |||||||
Other operating income |
5 |
|||||||||||||
Loss on reclassification from amortised cost to fair value |
( |
) |
( |
) |
( |
) | ||||||||
Other operating expenses |
6 |
( |
) |
( |
) |
( |
) | |||||||
Profit from operations |
2 |
|||||||||||||
Net finance costs |
8 |
( |
) |
( |
) |
( |
) | |||||||
Share of post-tax results of associates and joint ventures |
2, 9 |
|||||||||||||
Profit before taxation |
||||||||||||||
Taxation on ordinary activities |
10 |
( |
) |
( |
) |
( |
) | |||||||
Profit for the year |
||||||||||||||
Attributable to: |
||||||||||||||
Owners of the parent |
||||||||||||||
Non-controlling interests |
||||||||||||||
Earnings per share |
||||||||||||||
Basic |
11 |
p |
p |
p |
||||||||||
Diluted |
11 |
p |
p |
p |
1. |
Revenue is net of duty, excise and other taxes of £ |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
For the years ended 31 December |
||||||||||||||
Notes |
2021 £m |
2020 £m |
2019 £m |
|||||||||||
Profit for the year |
||||||||||||||
Other comprehensive income/(expense) |
||||||||||||||
Items that may be reclassified subsequently to profit or loss: |
( |
) |
( |
) | ||||||||||
Foreign currency translation and hedges of net investments in foreign operations |
||||||||||||||
– differences on exchange from translation of foreign operations |
( |
) |
( |
) | ||||||||||
– reclassified and reported in profit for the year |
22(c) |
|||||||||||||
– net investment hedges – net fair value gains/(losses) on derivatives |
( |
) |
||||||||||||
– net investment hedges – differences on exchange on borrowings |
( |
) |
( |
) | ||||||||||
Cash flow hedges |
||||||||||||||
– net fair value gains/(losses) |
( |
) |
( |
) | ||||||||||
– reclassified and reported in profit for the year |
||||||||||||||
– tax on net fair value (gains)/losses in respect of cash flow hedges |
10(f) |
( |
) |
|||||||||||
Investments held at fair value |
||||||||||||||
– net fair value gains |
18 |
|||||||||||||
Associates – share of OCI, net of tax |
9 |
( |
) |
( |
) |
( |
) | |||||||
Items that will not be reclassified subsequently to profit or loss: |
( |
) | ||||||||||||
Retirement benefit schemes |
||||||||||||||
– net actuarial gains/(losses) |
15 |
( |
) | |||||||||||
– surplus recognition |
15 |
( |
) |
( |
) | |||||||||
– tax on actuarial (gains)/losses in respect of subsidiaries |
10(f) |
( |
) |
( |
) |
|||||||||
Associates – share of OCI, net of tax |
9 |
( |
) |
|||||||||||
Total other comprehensive income/(expense) for the year, net of tax |
( |
) |
( |
) | ||||||||||
Total comprehensive income for the year, net of tax |
||||||||||||||
Attributable to: |
||||||||||||||
Owners of the parent |
||||||||||||||
Non-controlling interests |
||||||||||||||
BAT Annual Report and Form 20-F 2021 |
Attributable to owners of the parent |
||||||||||||||||||||||||||||||||||
Notes |
Share capital £m |
Share premium, capital redemption and merger reserves £m |
Other reserves £m |
Retained earnings £m |
Total attributable to owners of parent £m |
Perpetual hybrid bonds £m |
Non- controlling interests £m |
Total equity £m |
||||||||||||||||||||||||||
Balance at 1 January 2021 |
( |
) |
||||||||||||||||||||||||||||||||
Total comprehensive income for the year comprising: |
– |
– |
– |
|||||||||||||||||||||||||||||||
Profit for the year |
– |
– |
– |
– |
||||||||||||||||||||||||||||||
Other comprehensive income for the year |
– |
– |
– |
|||||||||||||||||||||||||||||||
Other changes in equity |
||||||||||||||||||||||||||||||||||
Cash flow hedges reclassified and reported in total assets |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||
Employee share options |
||||||||||||||||||||||||||||||||||
– value of employee services |
28 |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||
– treasury shares used for share option schemes |
– |
– |
( |
) |
– |
– |
– |
– |
||||||||||||||||||||||||||
Dividends and other appropriations |
||||||||||||||||||||||||||||||||||
– ordinary shares |
22(f) |
– |
– |
– |
( |
) |
( |
) |
– |
– |
( |
) | ||||||||||||||||||||||
– to non-controlling interests |
– |
– |
– |
– |
– |
– |
( |
) |
( |
) | ||||||||||||||||||||||||
Purchase of own shares |
||||||||||||||||||||||||||||||||||
– held in employee share ownership trusts |
– |
– |
– |
( |
) |
( |
) |
– |
– |
( |
) | |||||||||||||||||||||||
Perpetual hybrid bonds |
||||||||||||||||||||||||||||||||||
– proceeds, net of issuance fees |
22(d) |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||
– tax on issuance fees |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||
– coupons paid |
– |
– |
– |
( |
) |
( |
) |
– |
– |
( |
) | |||||||||||||||||||||||
– tax on coupons paid |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||
Non-controlling interests – acquisitions |
27(b) |
– |
– |
– |
( |
) |
( |
) |
– |
– |
( |
) | ||||||||||||||||||||||
Other movements – non-controlling interests |
27(b) |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||
Other movements |
– |
– |
– |
( |
) |
( |
) |
– |
– |
( |
) | |||||||||||||||||||||||
Balance at 31 December 2021 |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Attributable to owners of the parent |
||||||||||||||||||||||||||||||
Notes |
Share capital £m |
Share premium, capital redemption and merger reserves £m |
Other reserves £m |
Retained earnings £m |
Total attributable to owners of parent £m |
Non- controlling interests £m |
Total equity £m |
|||||||||||||||||||||||
Balance at 1 January 2020 |
( |
) |
||||||||||||||||||||||||||||
Total comprehensive income for the year comprising: |
– |
– |
( |
) |
||||||||||||||||||||||||||
Profit for the year |
– |
– |
– |
|||||||||||||||||||||||||||
Other comprehensive (expense)/income for the year |
– |
– |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||
Other changes in equity |
||||||||||||||||||||||||||||||
Cash flow hedges reclassified and reported in total assets |
– |
– |
( |
) |
– |
( |
) |
– |
( |
) | ||||||||||||||||||||
Employee share options |
||||||||||||||||||||||||||||||
– value of employee services |
28 |
– |
– |
– |
– |
|||||||||||||||||||||||||
– proceeds from new shares issued |
– |
– |
– |
– |
||||||||||||||||||||||||||
– treasury shares used for share option schemes |
– |
– |
( |
) |
– |
– |
– |
|||||||||||||||||||||||
Dividends and other appropriations |
||||||||||||||||||||||||||||||
– ordinary shares |
22(f) |
– |
– |
– |
( |
) |
( |
) |
– |
( |
) | |||||||||||||||||||
– to non-controlling interests |
– |
– |
– |
– |
– |
( |
) |
( |
) | |||||||||||||||||||||
Purchase of own shares |
||||||||||||||||||||||||||||||
– held in employee share ownership trusts |
– |
– |
– |
( |
) |
( |
) |
– |
( |
) | ||||||||||||||||||||
Other movements non-controlling interests |
27(b) |
– |
– |
– |
– |
– |
||||||||||||||||||||||||
Other movements |
– |
– |
– |
– |
||||||||||||||||||||||||||
Balance at 31 December 2020 |
( |
) |
Attributable to owners of the parent |
||||||||||||||||||||||||||||||
Notes |
Share capital £m |
Share premium, capital redemption and merger reserves £m |
Other reserves £m |
Retained earnings £m |
Total attributable to owners of parent £m |
Non- controlling interests £m |
Total equity £m |
|||||||||||||||||||||||
Balance at 1 January 2019 |
( |
) |
||||||||||||||||||||||||||||
Total comprehensive income for the year comprising: |
– |
– |
( |
) |
||||||||||||||||||||||||||
Profit for the year |
– |
– |
– |
|||||||||||||||||||||||||||
Other comprehensive expense for the year |
– |
– |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||
Other changes in equity |
||||||||||||||||||||||||||||||
Cash flow hedges reclassified and reported in total assets |
– |
– |
( |
) |
– |
( |
) |
– |
( |
) | ||||||||||||||||||||
Employee share options |
||||||||||||||||||||||||||||||
– value of employee services |
28 |
– |
– |
– |
– |
|||||||||||||||||||||||||
– proceeds from shares issued |
– |
– |
– |
– |
||||||||||||||||||||||||||
Dividends and other appropriations |
||||||||||||||||||||||||||||||
– ordinary shares |
– |
– |
– |
( |
) |
( |
) |
– |
( |
) | ||||||||||||||||||||
– to non-controlling interests |
– |
– |
– |
– |
– |
( |
) |
( |
) | |||||||||||||||||||||
Purchase of own shares |
||||||||||||||||||||||||||||||
– held in employee share ownership trusts |
– |
– |
– |
( |
) |
( |
) |
– |
( |
) | ||||||||||||||||||||
Other movements non-controlling interests |
27(a),(b) |
– |
– |
– |
– |
– |
||||||||||||||||||||||||
Other movements |
– |
– |
– |
( |
) |
( |
) |
– |
( |
) | ||||||||||||||||||||
Balance at 31 December 2019 |
( |
) |
BAT Annual Report and Form 20-F 2021 |
31 December |
||||||||||
Notes |
2021 £m |
2020 £m |
||||||||
Assets |
||||||||||
Intangible assets |
12 |
|||||||||
Property, plant and equipment |
13 |
|||||||||
Investments in associates and joint ventures |
14 |
|||||||||
Retirement benefit assets |
15 |
|||||||||
Deferred tax assets |
16 |
|||||||||
Trade and other receivables |
17 |
|||||||||
Investments held at fair value |
18 |
|||||||||
Derivative financial instruments |
19 |
|||||||||
Total non-current assets |
||||||||||
Inventories |
20 |
|||||||||
Income tax receivable |
||||||||||
Trade and other receivables |
17 |
|||||||||
Investments held at fair value |
18 |
|||||||||
Derivative financial instruments |
19 |
|||||||||
Cash and cash equivalents |
21 |
|||||||||
Assets classified as held-for-sale |
||||||||||
Total current assets |
||||||||||
Total assets |
||||||||||
Equity – capital and reserves |
||||||||||
Share capital |
22(a) |
|||||||||
Share premium, capital redemption and merger reserves |
22(b) |
|||||||||
Other reserves |
22(c) |
( |
) |
( |
) | |||||
Retained earnings |
22(c) |
|||||||||
Owners of the parent |
||||||||||
Perpetual hybrid bonds |
22(d) |
|||||||||
Non-controlling interests |
22(e) |
|||||||||
Total equity |
||||||||||
Liabilities |
||||||||||
Borrowings |
23 |
|||||||||
Retirement benefit liabilities |
15 |
|||||||||
Deferred tax liabilities |
16 |
|||||||||
Other provisions for liabilities |
24 |
|||||||||
Trade and other payables |
25 |
|||||||||
Derivative financial instruments |
19 |
|||||||||
Total non-current liabilities |
||||||||||
Borrowings |
23 |
|||||||||
Income tax payable |
||||||||||
Other provisions for liabilities |
24 |
|||||||||
Trade and other payables |
25 |
|||||||||
Derivative financial instruments |
19 |
|||||||||
Total current liabilities |
||||||||||
Total equity and liabilities |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
For the years ended 31 December |
||||||||||||||||
Notes |
2021 £m |
2020 £m |
2019 £m |
|||||||||||||
Profit for the year |
||||||||||||||||
Taxation on ordinary activities |
||||||||||||||||
Share of post-tax results of associates and joint ventures |
( |
) |
( |
) |
( |
) | ||||||||||
Net finance costs |
||||||||||||||||
Profit from operations |
||||||||||||||||
Adjustments for |
||||||||||||||||
– depreciation, amortisation and impairment costs |
4 |
|||||||||||||||
– decrease/(increase) in inventories |
( |
) |
( |
) | ||||||||||||
– (increase)/decrease in trade and other receivables |
( |
) |
( |
) | ||||||||||||
– decrease in receivables related to the charge in respect of the Quebec Class Actions |
24 |
|||||||||||||||
– (decrease)/increase in Master Settlement Agreement payable |
6 |
( |
) |
( |
) | |||||||||||
– increase/(decrease) in trade and other payables |
( |
) |
||||||||||||||
– decrease in net retirement benefit liabilities |
( |
) |
( |
) |
( |
) | ||||||||||
– (decrease)/increase in other provisions for liabilities |
( |
) |
– |
|||||||||||||
– other non-cash items |
27(d) |
|||||||||||||||
Cash generated from operating activities |
||||||||||||||||
Dividends received from associates |
||||||||||||||||
Tax paid |
( |
) |
( |
) |
( |
) | ||||||||||
Net cash generated from operating activities |
||||||||||||||||
Cash flows from investing activities |
||||||||||||||||
Interest received |
||||||||||||||||
Purchases of property, plant and equipment |
( |
) |
( |
) |
( |
) | ||||||||||
Proceeds on disposal of property, plant and equipment |
||||||||||||||||
Purchases of intangibles |
( |
) |
( |
) |
( |
) | ||||||||||
Purchases of investments |
( |
) |
( |
) |
( |
) | ||||||||||
Proceeds on disposals of investments |
||||||||||||||||
Investment in associates and acquisitions of other subsidiaries net of cash acquired |
( |
) |
( |
) | ||||||||||||
Disposal of subsidiary, net of cash disposed of |
27(d) |
( |
) |
|||||||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||||||
Cash flows from financing activities |
||||||||||||||||
Interest paid on borrowings and financing related activities |
( |
) |
( |
) |
( |
) | ||||||||||
Interest element of lease liabilities |
( |
) |
( |
) |
( |
) | ||||||||||
Capital element of lease liabilities |
( |
) |
( |
) |
( |
) | ||||||||||
Proceeds from increases in and new borrowings |
||||||||||||||||
Reductions in and repayments of borrowings |
( |
) |
( |
) |
( |
) | ||||||||||
Inflows/(outflows) relating to derivative financial instruments |
( |
) |
( |
) | ||||||||||||
Purchases of own shares held in employee share ownership trusts |
( |
) |
( |
) |
( |
) | ||||||||||
Proceeds from the issue of perpetual hybrid bonds, net of issuance costs |
22(d) |
|||||||||||||||
Coupon paid on perpetual hybrid bonds |
( |
) |
||||||||||||||
Dividends paid to owners of the parent |
( |
) |
( |
) |
( |
) | ||||||||||
Capital injection from and purchases of non-controlling interests |
30 |
|||||||||||||||
Dividends paid to non-controlling interests |
( |
) |
( |
) |
( |
) | ||||||||||
Other |
||||||||||||||||
Net cash used in financing activities |
( |
) |
( |
) |
( |
) | ||||||||||
Net cash flows (used in)/generated from operating, investing and financing activities |
( |
) |
( |
) | ||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) | ||||||||||
(Decrease)/increase in net cash and cash equivalents in the year |
( |
) |
( |
) | ||||||||||||
Net cash and cash equivalents at 1 January |
||||||||||||||||
Net cash and cash equivalents at 31 December |
21 |
BAT Annual Report and Form 20-F 2021 |
– |
the identification and quantification of adjusting items, which are separately disclosed as memorandum information, is explained below and the impact of these on the calculation of adjusted earnings per share is described in note 11; |
– |
the determination as to whether to recognise provisions and the exposures to contingent liabilities related to pending litigation or other outstanding claims, as well as other contingent liabilities. The accounting policy on contingent liabilities, which are not provided for, is set out below and the contingent liabilities of the Group are explained in note 31. Judgement is necessary to assess the likelihood that a pending claim is probable (more likely than not to succeed), possible or remote; |
– |
the determination as to whether control (subsidiaries), joint control (joint arrangements), or significant influence (associates) exists in relation to the investments held by the Group. This is assessed after taking into account the Group’s ability to appoint Directors to the entity’s Board, its relative shareholding compared with other shareholders, any significant contracts or arrangements with the entity or its other shareholders and other relevant facts and circumstances. The application of these policies to Group subsidiaries in territories including Canada is explained in note 32; |
– |
the review of applicable exchange rates for transactions with and translation of entities in territories where there are restrictions on the free access to foreign currency, or multiple exchange rates; and |
– |
the determination as to whether perpetual hybrid bonds should be classified as equity instead of borrowings (note 22(d)). |
– |
the review of asset values, especially indefinite life assets such as goodwill and certain trademarks and similar intangibles. The key assumptions used in respect of the impairment testing are the determination of cash-generating units, the budgeted and forecast cash flows of these units, the long-term growth rate for cash flow projections and the rate used to discount the cash flow projections. These are described in note 12; |
– |
the estimation of and accounting for retirement benefit costs. The determination of the carrying value of assets and liabilities, as well as the charge for the year, and amounts recognised in other comprehensive income, involves judgements made in conjunction with independent actuaries. These involve estimates about uncertain future events based on the environment in different countries, including life expectancy of scheme members, salary and pension increases, inflation, as well as discount rates and asset values at the year-end. The assumptions used by the Group and sensitivity analysis are described in note 15; and |
– |
the estimation of amounts to be recognised in respect of taxation and legal matters, and the estimation of other provisions for liabilities and charges are subject to uncertain future events, may extend over several years and so the amount and/or timing may differ from current assumptions. The accounting policy for taxation is explained below. The recognised deferred tax assets and liabilities, together with a note of unrecognised amounts, are shown in note 16, and a contingent tax asset is explained in note 10(b). Other provisions for liabilities and charges are as set out in note 24. Litigation related deposits are shown in note 17. The application of these accounting policies to the payments made and credits recognised under the Master Settlement Agreement by Reynolds American Inc. (Reynolds American) is described in note 6(b). |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
– |
Investments: |
– |
Loans and other receivables: |
– |
Cash and cash equivalents: |
– |
for derivatives that are designated as cash flow hedges, the changes in their fair values are recognised directly in other comprehensive income, to the extent that they are effective, with the ineffective portion being recognised in the income statement. Where the hedged item results in a non-financial asset, the accumulated gains and losses, previously recognised in other comprehensive income, are included in the initial carrying value of the asset (basis adjustment) and recognised in the income statement in the same periods as the hedged item. Where the underlying transaction does not result in such an asset, the accumulated gains and losses are reclassified to the income statement in the same periods as the hedged item; |
– |
for derivatives that are designated as fair value hedges, the carrying value of the hedged item is adjusted for the fair value changes attributable to the risk being hedged, with the corresponding entry being made in the income statement. The changes in fair value of these derivatives are also recognised in the income statement; |
– |
for derivatives that are designated as hedges of net investments in foreign operations, the changes in their fair values are recognised directly in other comprehensive income, to the extent that they are effective, with the ineffective portion being recognised in the income statement. Where non-derivatives such as foreign currency borrowings are designated as net investment hedges, the relevant exchange differences are similarly recognised. The accumulated gains and losses are reclassified to the income statement when the foreign operation is disposed of; and |
– |
for derivatives that do not qualify for hedge accounting or are not designated as hedges, the changes in their fair values are recognised in the income statement in the period in which they arise. These are referred to as ‘held-for-trading’. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
|||||||||||||||||||||||||||||||
Adjusted Revenue Constant rates £m |
Translation exchange £m |
Adjusted Revenue Current rates £m |
Adjusting items Current rates £m |
Revenue Current rates £m |
Adjusted Revenue £m |
Adjusting items £m |
Revenue £m |
|||||||||||||||||||||||||
U.S. |
( |
) |
||||||||||||||||||||||||||||||
APME |
( |
) |
||||||||||||||||||||||||||||||
AMSSA |
( |
) |
||||||||||||||||||||||||||||||
ENA |
( |
) |
||||||||||||||||||||||||||||||
Revenue |
( |
) |
2020 |
2019 |
|||||||||||||||||||||||||||||||
Adjusted Revenue Constant rates £m |
Translation exchange £m |
Adjusted Revenue Current rates £m |
Adjusting items Current rates £m |
Revenue Current rates £m |
Adjusted Revenue £m |
Adjusting items £m |
Revenue £m |
|||||||||||||||||||||||||
U.S. |
( |
) |
||||||||||||||||||||||||||||||
APME |
( |
) |
||||||||||||||||||||||||||||||
AMSSA |
( |
) |
||||||||||||||||||||||||||||||
ENA |
( |
) |
||||||||||||||||||||||||||||||
Revenue |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
|||||||||||||||||||||||||||||||
Adjusted* segment result Constant rates £m |
Translation exchange £m |
Adjusted* segment result Current rates £m |
Adjusting* items £m |
Segment result Current rates £m |
Adjusted* segment result £m |
Adjusting* items £m |
Segment result £m |
|||||||||||||||||||||||||
U.S. |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
APME |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
AMSSA |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
ENA |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Profit from operations |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Net finance costs |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Share of post-tax results of associates and joint ventures |
||||||||||||||||||||||||||||||||
Profit before taxation |
||||||||||||||||||||||||||||||||
Taxation on ordinary activities |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Profit for the year |
* |
The adjustments to profit from operations are explained in notes 3, 4, 6(d), 6(f), 6(g) and 7. |
2020 |
2019 |
|||||||||||||||||||||||||||||||
Adjusted* segment result Constant rates £m |
Translation exchange £m |
Adjusted* segment result Current rates £m |
Adjusting* items £m |
Segment result Current rates £m |
Adjusted* segment result £m |
Adjusting* items £m |
Segment result £m |
|||||||||||||||||||||||||
U.S. |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
APME |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
AMSSA |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
ENA |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Profit from operations |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Net finance costs |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Share of post-tax results of associates and joint ventures |
||||||||||||||||||||||||||||||||
Profit before taxation |
||||||||||||||||||||||||||||||||
Taxation on ordinary activities |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Profit for the year |
* |
The adjustments to profit from operations are explained in notes 4, 5, 6(d), 6(f), 6(g) and 7. |
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
|||||||||||||||||||||||||||||||
Adjusted depreciation, amortisation and impairment Constant rates £m |
Translation exchange £m |
Adjusted depreciation, amortisation and impairment Current rates £m |
Adjusting items £m |
Depreciation, amortisation and impairment Current rates £m |
Adjusted depreciation, amortisation and impairment £m |
Adjusting items £m |
Depreciation, amortisation and impairment £m |
|||||||||||||||||||||||||
U.S. |
( |
) |
||||||||||||||||||||||||||||||
APME |
( |
) |
||||||||||||||||||||||||||||||
AMSSA |
( |
) |
||||||||||||||||||||||||||||||
ENA |
( |
) |
||||||||||||||||||||||||||||||
( |
) |
2020 |
2019 |
|||||||||||||||||||||||||||||||
Adjusted depreciation, amortisation and impairment Constant rates £m |
Translation exchange £m |
Adjusted depreciation, amortisation and impairment Current rates £m |
Adjusting items £m |
Depreciation, amortisation and impairment Current rates £m |
Adjusted depreciation, amortisation and impairment £m |
Adjusting items £m |
Depreciation, amortisation and impairment £m |
|||||||||||||||||||||||||
U.S. |
( |
) |
||||||||||||||||||||||||||||||
APME |
( |
) |
||||||||||||||||||||||||||||||
AMSSA |
( |
) |
||||||||||||||||||||||||||||||
ENA |
( |
) |
||||||||||||||||||||||||||||||
( |
) |
Revenue |
2021 £m |
2020 £m |
2019 £m |
|||||||||
Combustibles |
||||||||||||
New Categories |
||||||||||||
Vapour |
||||||||||||
THP |
||||||||||||
Modern Oral |
||||||||||||
Traditional Oral |
||||||||||||
Other |
||||||||||||
Revenue |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
United Kingdom |
All foreign countries |
Group |
||||||||||||||||||||||||||||||||||
Revenue is based on location of sale |
2021 £m |
2020 £m |
2019 £m |
2021 £m |
2020 £m |
2019 £m |
2021 £m |
2020 £m |
2019 £m |
|||||||||||||||||||||||||||
External revenue |
United Kingdom |
All foreign countries |
Group |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
Intangible assets |
||||||||||||||||||||||||
Property, plant and equipment |
||||||||||||||||||||||||
Investments in associates and joint ventures |
2021 £m |
2020 £m |
2019 £m |
||||||||||
Wages and salaries |
||||||||||||
Social security costs |
||||||||||||
Other pension and retirement benefit costs (note 15) |
||||||||||||
Share-based payments – equity and cash-settled (note 28) |
||||||||||||
2021 £m |
2020 £m |
2019 £m |
||||||||||||
Intangibles |
– amortisation and impairment of trademarks and similar intangibles |
|||||||||||||
– amortisation and impairment of computer software |
||||||||||||||
– impairment of goodwill |
||||||||||||||
Property, plant and equipment – depreciation and impairment |
||||||||||||||
BAT Annual Report and Form 20-F 2021 |
– |
Restructuring and integration related depreciation and impairment costs and reversals were a net credit of £ |
– |
Gains and losses recognised on disposal of property, plant and equipment. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 £m |
2020 £m |
2019 £m |
||||||||||
Other operating expenses |
||||||||||||
The following items are included within other operating expenses: |
||||||||||||
Master settlement agreement (note 6(b),(d)) |
||||||||||||
Marketing expenses in operating profit (note 6(c)) |
||||||||||||
Inventory write-offs (note 20) |
||||||||||||
Research and development expenses (excluding employee benefit costs and depreciation) (note 6(e)) |
||||||||||||
Loss on disposal of BAT Pars (note 6(f)) |
– |
– |
||||||||||
Excise, VAT and penalties in respect of disputes in Turkey, South Korea and Russia (note 6(g)) |
( |
) |
||||||||||
Judgment in respect of Quebec class actions (note 6(h)) |
– |
– |
||||||||||
Exchange differences |
( |
) |
||||||||||
Hedge ineffectiveness within operating profit |
( |
) |
( |
) |
( |
) | ||||||
Expenses relating to short-term leases |
||||||||||||
Expenses relating to leases of low-value assets |
||||||||||||
Gains arising from sale and leaseback transactions |
– |
( |
) |
– |
||||||||
Auditor’s remuneration (note 6(i)) |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 £m |
2020 £m |
2019 £m |
||||||||||
Auditor’s remuneration |
||||||||||||
Total expense for audit services pursuant to legislation: |
||||||||||||
– fees to KPMG LLP for Parent Company and Group audit |
||||||||||||
– fees to KPMG LLP firms and associates for local statutory and Group reporting audits |
||||||||||||
Total audit fees expense – KPMG LLP firms and associates |
||||||||||||
Audit fees expense to other firms |
||||||||||||
Total audit fees expense |
||||||||||||
Fees to KPMG LLP firms and associates for other services: |
||||||||||||
– audit-related assurance services |
||||||||||||
– other assurance services |
||||||||||||
– tax advisory services |
– |
– |
– |
|||||||||
– tax compliance |
– |
– |
– |
|||||||||
– audit of defined benefit schemes of the Company |
||||||||||||
– other non-audit services |
– |
– |
– |
|||||||||
2021 £m |
2020 £m |
2019 £m |
||||||||||
Employee benefit costs (note 3) |
||||||||||||
Depreciation, amortisation and impairment costs (note 4) |
( |
) |
||||||||||
Other operating income (note 5) |
– |
– |
( |
) | ||||||||
Other operating expenses |
||||||||||||
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
2019 £m |
||||||||||
Interest expense |
||||||||||||
Interest expense on lease liabilities |
||||||||||||
Facility fees |
||||||||||||
Interest and fair value related to early repurchase of bonds (note 8(b)) |
– |
– |
||||||||||
Interest related to adjusting tax payables (note 8(b)) |
||||||||||||
Fair value changes on derivative financial instruments and hedged items |
( |
) |
||||||||||
Fair value change on other financial items (note 8(b)) |
– |
– |
||||||||||
Exchange differences |
( |
) |
( |
) | ||||||||
Finance costs |
||||||||||||
Interest under the effective interest method |
( |
) |
( |
) |
( |
) | ||||||
Finance income |
( |
) |
( |
) |
( |
) | ||||||
Net finance costs |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
2019 |
||||||||||||||||||||||
Total £m |
Group’s share £m |
Total £m |
Group’s share £m |
Total £m |
Group’s share £m |
|||||||||||||||||||
Revenue |
||||||||||||||||||||||||
Profit from operations |
||||||||||||||||||||||||
Net finance costs |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Profit on ordinary activities before taxation |
||||||||||||||||||||||||
Taxation on ordinary activities |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Profit on ordinary activities after taxation |
||||||||||||||||||||||||
Non-controlling interests |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Post-tax results of associates and joint ventures |
2021 |
2020 |
2019 |
||||||||||
Group’s share £m |
Group’s share £m |
Group’s share £m |
||||||||||
Profit on ordinary activities after taxation |
||||||||||||
– attributable to owners of the Parent |
||||||||||||
Other comprehensive income: |
||||||||||||
Items that may be reclassified to profit and loss |
( |
) |
( |
) |
( |
) | ||||||
Items that will not be reclassified to profit and loss |
( |
) |
||||||||||
Total comprehensive income |
BAT Annual Report and Form 20-F 2021 |
2021 |
||||||||||||
ITC £m |
Others £m |
Total £m |
||||||||||
Revenue |
||||||||||||
Profit on ordinary activities before taxation |
( |
) |
||||||||||
Post-tax results of associates and joint ventures |
( |
) |
||||||||||
Other comprehensive income |
( |
) |
– |
( |
) | |||||||
Total comprehensive income |
( |
) |
2020 |
||||||||||||
ITC £m |
Others £m |
Total £m |
||||||||||
Revenue |
||||||||||||
Profit on ordinary activities before taxation |
||||||||||||
Post-tax results of associates and joint ventures |
||||||||||||
Other comprehensive income |
( |
) |
– |
( |
) | |||||||
Total comprehensive income |
2019 |
||||||||||||
ITC £m |
Others £m |
Total £m |
||||||||||
Revenue |
||||||||||||
Profit on ordinary activities before taxation |
||||||||||||
Post-tax results of associates and joint ventures |
||||||||||||
Other comprehensive income |
( |
) |
– |
( |
) | |||||||
Total comprehensive income |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 £m |
2020 £m |
2019 £m |
||||||||||
UK corporation tax |
( |
) |
||||||||||
Comprising: |
||||||||||||
– current year tax expense |
||||||||||||
– adjustments in respect of prior periods |
( |
) |
– |
( |
) | |||||||
Overseas tax |
||||||||||||
Comprising: |
||||||||||||
– current year tax expense |
||||||||||||
– adjustments in respect of prior periods |
( |
) |
( |
) | ||||||||
Total current tax |
||||||||||||
Deferred tax |
( |
) |
( |
) |
||||||||
Comprising: |
||||||||||||
– deferred tax relating to origination and reversal of temporary differences |
( |
) |
( |
) |
||||||||
– deferred tax relating to changes in tax rates |
( |
) |
( |
) |
( |
) | ||||||
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
2019 |
||||||||||||||||||||||
£m |
% |
£m |
% |
£m |
% |
|||||||||||||||||||
Profit before tax |
||||||||||||||||||||||||
Less: share of post-tax results of associates and joint ventures (see note 9) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||
Tax at |
||||||||||||||||||||||||
Factors affecting the tax rate: |
||||||||||||||||||||||||
Tax at standard rates other than UK corporation tax rate |
||||||||||||||||||||||||
Other national tax charges |
||||||||||||||||||||||||
Permanent differences |
||||||||||||||||||||||||
Overseas withholding taxes |
||||||||||||||||||||||||
Double taxation relief on UK profits |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
(Utilised)/unutilised tax losses |
( |
) |
( |
) |
||||||||||||||||||||
Adjustments in respect of prior periods |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Deferred tax relating to changes in tax rates |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Additional net deferred tax (credits)/charges |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||
2021 £m |
2020 £m |
2019 £m |
||||||||||
Current tax |
( |
) |
( |
) |
( |
) | ||||||
Deferred tax |
( |
) |
||||||||||
(Charged)/credited to other comprehensive income |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 £m |
2020 £m |
2019 £m |
||||||||||
Earnings attributable to owners of the parent |
||||||||||||
Coupon on perpetual hybrid bonds |
( |
) |
– |
– |
||||||||
Tax on coupon on perpetual hybrid bonds |
– |
– |
||||||||||
Earnings |
2021 |
2020 |
2019 |
||||||||||||||||||||||||||||||||||
Earnings £m |
Weighted average number of shares m |
Earnings per share pence |
Earnings £m |
Weighted average number of shares m |
Earnings per share pence |
Earnings £m |
Weighted average number of shares m |
Earnings per share pence |
||||||||||||||||||||||||||||
Basic earnings per share (ordinary shares of p each) |
.9 |
.0 |
.7 |
|||||||||||||||||||||||||||||||||
Share options |
– |
( |
) |
– |
( |
) |
– |
( |
) | |||||||||||||||||||||||||||
Diluted earnings per share |
.6 |
.9 |
.0 |
Basic |
||||||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||||||
Notes |
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
||||||||||||||||||||||
Basic earnings per share |
9 |
0 |
7 |
|||||||||||||||||||||||||
Effect of restructuring and integration costs |
7 |
5 |
8 |
7 |
||||||||||||||||||||||||
Tax and non-controlling interests on restructuring and integration costs |
( |
) |
7 |
) |
( |
) |
8 |
) |
( |
) |
4 |
) | ||||||||||||||||
Effect of amortisation and impairment of goodwill, trademarks and similar intangibles |
4 |
9 |
0 |
6 |
||||||||||||||||||||||||
Tax and non-controlling interests on amortisation and impairment of goodwill, trademarks and similar intangibles |
( |
) |
1 |
) |
( |
) |
4 |
) |
( |
) |
0 |
) | ||||||||||||||||
Effect of associates’ adjusting items net of tax |
9(a |
) |
5 |
( |
) |
6 |
) |
( |
) |
1 |
) | |||||||||||||||||
Effect of Quebec class action |
6(h |
) |
– |
– |
– |
– |
1 |
|||||||||||||||||||||
Tax on Quebec class action |
– |
– |
– |
– |
( |
) |
4 |
) | ||||||||||||||||||||
Effect of excise and VAT disputes |
6(g |
) |
1 |
( |
) |
7 |
) |
9 |
||||||||||||||||||||
Tax on excise and VAT disputes |
10(d |
) |
( |
) |
1 |
) |
6 |
( |
) |
7 |
) | |||||||||||||||||
Effect of disposal of BAT Pars |
6(f |
) |
7 |
– |
– |
– |
– |
|||||||||||||||||||||
Other adjusting items |
3,6(d |
) |
8 |
2 |
3 |
|||||||||||||||||||||||
Tax effect on other adjusting items |
( |
) |
2 |
) |
( |
) |
5 |
) |
( |
) |
2 |
) | ||||||||||||||||
Deferred tax relating to changes in tax rates |
10 |
( |
) |
3 |
) |
( |
) |
9 |
) |
( |
) |
2 |
) | |||||||||||||||
Effect of early repurchase of bonds |
8(b |
) |
– |
– |
2 |
– |
– |
|||||||||||||||||||||
Tax effect of early repurchase of bonds |
– |
– |
( |
) |
4 |
) |
– |
– |
||||||||||||||||||||
Effect of interest on FII GLO settlement and other |
8(b |
) |
4 |
5 |
5 |
|||||||||||||||||||||||
Tax effect of interest on FII GLO settlement and other |
– |
– |
( |
) |
2 |
) |
– |
– |
||||||||||||||||||||
Effect of retrospective guidance on WHT |
10(d |
) |
– |
– |
( |
) |
8 |
) |
– |
– |
||||||||||||||||||
Adjusted earnings per share (basic) |
4 |
0 |
8 |
BAT Annual Report and Form 20-F 2021 |
Diluted |
||||||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||||||
Notes |
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
||||||||||||||||||||||
Diluted earnings per share |
6 |
9 |
0 |
|||||||||||||||||||||||||
Effect of restructuring and integration costs |
7 |
6 |
7 |
7 |
||||||||||||||||||||||||
Tax and non-controlling interests on restructuring and integration costs |
( |
) |
7 |
) |
( |
) |
8 |
) |
( |
) |
4 |
) | ||||||||||||||||
Effect of amortisation and impairment of goodwill, trademarks and similar intangibles |
4 |
8 |
9 |
5 |
||||||||||||||||||||||||
Tax and non-controlling interests on amortisation and impairment of goodwill, trademarks and similar intangibles |
( |
) |
1 |
) |
( |
) |
4 |
) |
( |
) |
0 |
) | ||||||||||||||||
Effect of associates’ adjusting items net of tax |
9(a |
) |
5 |
( |
) |
6 |
) |
( |
) |
1 |
) | |||||||||||||||||
Effect of Quebec class action |
6(h |
) |
– |
– |
– |
– |
0 |
|||||||||||||||||||||
Tax on Quebec class action |
– |
– |
– |
– |
( |
) |
4 |
) | ||||||||||||||||||||
Effect of excise and VAT disputes |
6(g |
) |
1 |
( |
) |
7 |
) |
8 |
||||||||||||||||||||
Tax on excise and VAT disputes |
10(d |
) |
( |
) |
1 |
) |
6 |
( |
) |
7 |
) | |||||||||||||||||
Effect of disposal of BAT Pars |
6(f |
) |
6 |
– |
– |
– |
– |
|||||||||||||||||||||
Other adjusting items |
3,6(d |
) |
8 |
2 |
3 |
|||||||||||||||||||||||
Tax effect on other adjusting items |
( |
) |
2 |
) |
( |
) |
( 5 |
) |
( |
) |
2 |
) | ||||||||||||||||
Deferred tax relating to changes in tax rates |
10 |
( |
) |
3 |
) |
( |
) |
9 |
) |
( |
) |
2 |
) | |||||||||||||||
Effect of early repurchase of bonds |
8(b |
) |
– |
– |
2 |
– |
– |
|||||||||||||||||||||
Tax effect of early repurchase of bonds |
– |
– |
( |
) |
4 |
) |
– |
– |
||||||||||||||||||||
Effect of interest on FII GLO settlement and other |
8(b |
) |
4 |
5 |
5 |
|||||||||||||||||||||||
Tax effect of interest on FII GLO settlement and other |
– |
– |
( |
) |
2 |
) |
– |
– |
||||||||||||||||||||
Effect of retrospective guidance on WHT |
10(d |
) |
– |
– |
( |
) |
8 |
) |
– |
– |
||||||||||||||||||
Adjusted earnings per share (diluted) |
0 |
7 |
8 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Basic |
||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
|||||||||||||||||||
Basic earnings per share |
.9 |
.0 |
.7 |
|||||||||||||||||||||
Effect of impairment of intangibles, property, plant and equipment and assets held-for-sale |
.0 |
.3 |
.7 |
|||||||||||||||||||||
Tax and non-controlling interests on impairment of intangibles and property, plant and equipment |
( |
) |
.8 |
) |
( |
) |
.3 |
) |
( |
) |
.5 |
) | ||||||||||||
Effect of (gains)/losses on disposal of property, plant and equipment, held-for-sale assets, partial/full termination of IFRS 16 leases, and sale and leaseback |
( |
) |
.4 |
) |
( |
) |
.1 |
) |
.3 |
|||||||||||||||
Tax and non-controlling interests on disposal of property, plant and equipment, held-for-sale assets, partial/full termination of IFRS 16 leases, and sale and leaseback |
.1 |
.3 |
( |
) |
– |
|||||||||||||||||||
Effect of impairment of BAT Pars |
.6 |
– |
– |
– |
– |
|||||||||||||||||||
Tax on impairment of BAT Pars |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
Effect of foreign exchange reclassification from reserves to the income statement |
||||||||||||||||||||||||
– Subsidiaries |
.7 |
– |
– |
– |
– |
|||||||||||||||||||
– Associates |
( |
) |
.1 |
) |
– |
– |
– |
– |
||||||||||||||||
Issue of shares and change in shareholding in associate |
( |
) |
.3 |
) |
( |
) |
.7 |
) |
( |
) |
.1 |
) | ||||||||||||
Headline earnings per share (basic) |
.7 |
.5 |
.1 |
Diluted |
||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
Earnings £m |
Earnings per share pence |
|||||||||||||||||||
Diluted earnings per share |
.6 |
.9 |
.0 |
|||||||||||||||||||||
Effect of impairment of intangibles, property, plant and equipment and assets held-for-sale |
.0 |
.3 |
.5 |
|||||||||||||||||||||
Tax and non-controlling interests on impairment of intangibles and property, plant and equipment |
( |
) |
.8 |
) |
( |
) |
.3 |
) |
( |
) |
.4 |
) | ||||||||||||
Effect of (gains)/losses on disposal of property, plant and equipment, held-for-sale assets, partial/full termination of IFRS 16 leases, and sale and leaseback |
( |
) |
.4 |
) |
( |
) |
.1 |
) |
.3 |
|||||||||||||||
Tax and non-controlling interests on disposal of property, plant and equipment, held-for-sale assets, partial/full termination of IFRS 16 leases, and sale and leaseback |
.1 |
.3 |
( |
) |
– |
|||||||||||||||||||
Effect of impairment of BAT Pars |
.6 |
– |
– |
– |
– |
|||||||||||||||||||
Tax on impairment of BAT Pars |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
Effect of foreign exchange reclassification from reserves to the income statement |
||||||||||||||||||||||||
– Subsidiaries |
.6 |
– |
– |
– |
– |
|||||||||||||||||||
– Associates |
( |
) |
.1 |
) |
– |
– |
– |
– |
||||||||||||||||
Issue of shares and change in shareholding in associate |
( |
) |
.3 |
) |
( |
) |
.7 |
) |
( |
) |
.1 |
) | ||||||||||||
Headline earnings per share (diluted) |
.3 |
.4 |
.3 |
BAT Annual Report and Form 20-F 2021 |
2021 |
||||||||||||||||||||
Goodwill £m |
Computer software £m |
Trademarks and similar intangibles £m |
Assets in the course of development £m |
Total £m |
||||||||||||||||
1 January |
||||||||||||||||||||
Cost |
||||||||||||||||||||
Accumulated amortisation and impairment |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 1 January |
||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
||||||||||||||||
Additions |
||||||||||||||||||||
– internal development |
– |
– |
– |
|||||||||||||||||
– separately acquired |
– |
– |
||||||||||||||||||
Reallocations |
– |
( |
) |
– |
||||||||||||||||
Amortisation charge |
– |
( |
) |
( |
) |
– |
( |
) | ||||||||||||
Impairment |
( |
) |
( |
) |
( |
) |
– |
( |
) | |||||||||||
31 December |
||||||||||||||||||||
Cost |
||||||||||||||||||||
Accumulated amortisation and impairment |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 31 December |
2020 |
||||||||||||||||||||
Goodwill £m |
Computer software £m |
Trademarks and similar intangibles £m |
Assets in the course of development £m |
Total £m |
||||||||||||||||
1 January |
||||||||||||||||||||
Cost |
||||||||||||||||||||
Accumulated amortisation and impairment |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 1 January |
||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) |
– |
( |
) | |||||||||||
Additions |
||||||||||||||||||||
– internal development |
– |
– |
– |
|||||||||||||||||
– acquisitions (note 27) |
– |
– |
||||||||||||||||||
– separately acquired |
– |
– |
||||||||||||||||||
Reallocations |
– |
( |
) |
– |
||||||||||||||||
Amortisation charge |
– |
( |
) |
( |
) |
– |
( |
) | ||||||||||||
Impairment |
( |
) |
( |
) |
( |
) |
– |
( |
) | |||||||||||
31 December |
||||||||||||||||||||
Cost |
||||||||||||||||||||
Accumulated amortisation and impairment |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 31 December |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
|||||||||||||||
Carrying amount £m |
Pre-tax discount rate % |
Carrying amount £m |
Pre-tax discount rate % |
|||||||||||||
Cash-generating unit |
||||||||||||||||
Reynolds American |
||||||||||||||||
Europe |
||||||||||||||||
Canada |
||||||||||||||||
Australia |
||||||||||||||||
South Africa |
||||||||||||||||
Singapore |
||||||||||||||||
GTR |
||||||||||||||||
Malaysia |
||||||||||||||||
Peru |
||||||||||||||||
Other |
||||||||||||||||
Total |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Carrying |
Increase in |
Increase in |
||||||||||||||||||
amount of |
discount |
Decrease in |
terminal |
|||||||||||||||||
CGU |
Headroom |
rate |
1 |
cash flows |
1 |
value |
1 | |||||||||||||
£m |
£m |
£m |
£m |
£m |
||||||||||||||||
Change in headroom/impairment charge |
||||||||||||||||||||
Cash-generating unit |
||||||||||||||||||||
Peru 1 |
( |
) |
( |
) |
( |
) |
1. |
Peru: reasonably possible changes in key assumptions that would result in additional impairment would be a |
BAT Annual Report and Form 20-F 2021 |
Reynolds American goodwill % |
Newport % |
Camel % |
||||||||||
Assumptions |
||||||||||||
Decrease in revenue by |
||||||||||||
Increase in pre-tax discount rate by |
||||||||||||
Decrease in terminal value rate by |
Canada goodwill % |
||||
Assumptions |
||||
Decrease in revenue by |
||||
Increase in pre-tax discount rate by |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
||||||||||||||||||||||||
Freehold property £m |
Leasehold property £m |
Plant, equipment and other owned £m |
Plant, equipment and other leased £m |
Assets in the course of construction £m |
Total £m |
|||||||||||||||||||
1 January |
||||||||||||||||||||||||
Cost |
||||||||||||||||||||||||
Accumulated depreciation and impairment |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 1 January |
||||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Additions |
||||||||||||||||||||||||
– right-of-use assets |
– |
– |
– |
|||||||||||||||||||||
– separately acquired |
– |
– |
||||||||||||||||||||||
Reallocations |
( |
) |
– |
|||||||||||||||||||||
Depreciation |
( |
) |
( |
) |
( |
) |
( |
) |
– |
( |
) | |||||||||||||
Impairment |
( |
) |
( |
) |
( |
) |
– |
( |
) |
( |
) | |||||||||||||
Right-of-use assets – reassessments, modifications and terminations |
– |
( |
) |
– |
( |
) |
– |
( |
) | |||||||||||||||
Disposals |
( |
) |
( |
) |
( |
) |
– |
– |
( |
) | ||||||||||||||
Net reclassifications as held-for-sale |
( |
) |
– |
( |
) |
– |
– |
( |
) | |||||||||||||||
31 December |
||||||||||||||||||||||||
Cost |
||||||||||||||||||||||||
Accumulated depreciation and impairment |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 31 December |
2020 |
||||||||||||||||||||||||
Freehold property £m |
Leasehold property £m |
Plant, equipment and other owned £m |
Plant, equipment and other leased £m |
Assets in the course of construction £m |
Total £m |
|||||||||||||||||||
1 January |
||||||||||||||||||||||||
Cost |
||||||||||||||||||||||||
Accumulated depreciation and impairment |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 1 January |
||||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Additions |
||||||||||||||||||||||||
– right-of-use assets |
– |
– |
– |
|||||||||||||||||||||
– separately acquired |
– |
– |
||||||||||||||||||||||
– acquisition of subsidiaries (note 27(a)) |
– |
– |
– |
– |
||||||||||||||||||||
Reallocations |
– |
( |
) |
– |
||||||||||||||||||||
Depreciation |
( |
) |
( |
) |
( |
) |
( |
) |
– |
( |
) | |||||||||||||
Impairment |
( |
) |
( |
) |
( |
) |
– |
( |
) |
( |
) | |||||||||||||
Right-of-use assets – reassessments, modifications and terminations |
– |
( |
) |
– |
( |
) |
– |
( |
) | |||||||||||||||
Disposals |
( |
) |
– |
( |
) |
– |
– |
( |
) | |||||||||||||||
Net reclassifications as held-for-sale |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
31 December |
||||||||||||||||||||||||
Cost |
||||||||||||||||||||||||
Accumulated depreciation and impairment |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Net book value at 31 December |
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
|||||||
Leasehold land and property comprises |
||||||||
– net book value of long leasehold |
||||||||
– net book value of short leasehold |
||||||||
2021 |
||||||||||||||||||||
Leasehold property net book value movements for the year ended 31 December 2021 |
Net book value at 1 January £m |
Differences on exchange £m |
Depreciation and impairment £m |
Other net movements* £m |
Net book value at 31 December £m |
|||||||||||||||
– Property acquired (IAS16) |
( |
) |
( |
) |
||||||||||||||||
– Right-of-use properties (IFRS16) |
( |
) |
( |
) |
||||||||||||||||
( |
) |
( |
) |
2020 |
||||||||||||||||||||
Leasehold property net book value movements for the year ended 31 December 2020 |
Net book value at 1 January £m |
Differences on exchange £m |
Depreciation and impairment £m |
Other net movements* £m |
Net book value at 31 December £m |
|||||||||||||||
– Property acquired (IAS16) |
( |
) |
( |
) |
||||||||||||||||
– Right-of-use properties (IFRS16) |
( |
) |
( |
) |
||||||||||||||||
( |
) |
( |
) |
* |
Property acquired (IAS 16 Property, plant and equipment |
2021 £m |
2020 £m |
|||||||
Cost of freehold land within freehold property on which no depreciation is provided |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 £m |
2020 £m |
|||||||
1 January |
||||||||
Total comprehensive income (note 9) |
||||||||
Dividends |
( |
) |
( |
) | ||||
Additions (note 27(c)) |
||||||||
Other equity movements |
||||||||
31 December |
||||||||
Non-current assets |
||||||||
Current assets |
||||||||
Non-current liabilities |
( |
) |
( |
) | ||||
Current liabilities |
( |
) |
( |
) | ||||
ITC Ltd. (Group’s share of the market value is £ |
||||||||
Other listed associates (Group’s share of the market value is £ |
||||||||
Unlisted associates |
||||||||
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
|||||||
Non-current assets |
||||||||
Current assets |
||||||||
Non-current liabilities |
( |
) |
( |
) | ||||
Current liabilities |
( |
) |
( |
) | ||||
Group’s share of ITC Ltd. (2021: |
– |
Asset volatility: |
– |
Changes in bond yields: |
– |
Inflation risk: |
– |
Life expectancy: |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
Pension schemes |
Healthcare schemes |
Total |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
Present value of funded scheme liabilities |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Fair value of funded scheme assets |
||||||||||||||||||||||||
( |
) |
( |
) |
|||||||||||||||||||||
Unrecognised funded scheme surpluses |
( |
) |
( |
) |
– |
– |
( |
) |
( |
) | ||||||||||||||
( |
) |
( |
) |
|||||||||||||||||||||
Present value of unfunded scheme liabilities |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||
The above net (liability)/asset is recognised in the balance sheet as follows: |
||||||||||||||||||||||||
– retirement benefit scheme liabilities |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
– retirement benefit scheme assets |
||||||||||||||||||||||||
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Liabilities |
Assets |
Total |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
– U.S. |
( |
) |
( |
) |
||||||||||||||||||||
– UK |
( |
) |
( |
) |
||||||||||||||||||||
– Germany |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
– Canada |
( |
) |
( |
) |
||||||||||||||||||||
– Netherlands |
( |
) |
( |
) |
||||||||||||||||||||
– Switzerland |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
– Rest of Group |
( |
) |
( |
) |
||||||||||||||||||||
Funded schemes |
( |
) |
( |
) |
Pension schemes |
Healthcare schemes |
Total |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
Defined benefit schemes |
||||||||||||||||||||||||
Service cost |
||||||||||||||||||||||||
– current service cost |
||||||||||||||||||||||||
– past service credit, curtailments and settlements |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Net interest on the net defined benefit liability |
||||||||||||||||||||||||
– interest on scheme liabilities |
||||||||||||||||||||||||
– interest on scheme assets |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
– interest on unrecognised funded scheme surpluses |
||||||||||||||||||||||||
Defined contribution schemes |
||||||||||||||||||||||||
Total amount recognised in the income statement (note 3) |
Pension schemes |
Healthcare schemes |
Total |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
Present value at 1 January |
||||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Current service cost |
||||||||||||||||||||||||
Past service credit and settlements |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Interest on scheme liabilities |
||||||||||||||||||||||||
Contributions by scheme members |
||||||||||||||||||||||||
Benefits paid |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Actuarial losses/(gains) |
||||||||||||||||||||||||
– arising from changes in demographic assumptions |
( |
) |
||||||||||||||||||||||
– arising from changes in financial assumptions |
( |
) |
( |
) |
( |
) |
||||||||||||||||||
Experience losses/(gains) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||
Present value at 31 December |
BAT Annual Report and Form 20-F 2021 |
Pension schemes |
Healthcare schemes |
Total |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
Active members |
||||||||||||||||||||||||
Deferred members |
||||||||||||||||||||||||
Retired members |
||||||||||||||||||||||||
Present value at 31 December |
Pension schemes |
Healthcare schemes |
Total |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
Fair value of scheme assets at 1 January |
||||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Settlements |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Interest on scheme assets |
||||||||||||||||||||||||
Company contributions |
||||||||||||||||||||||||
Contributions by scheme members |
||||||||||||||||||||||||
Benefits paid |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Actuarial gains |
||||||||||||||||||||||||
Fair value of scheme assets at 31 December |
Pension schemes |
Healthcare schemes |
Total |
||||||||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||||||
Equities – listed |
||||||||||||||||||||||||
Equities – unlisted |
||||||||||||||||||||||||
Bonds – listed |
||||||||||||||||||||||||
Bonds – unlisted |
||||||||||||||||||||||||
Other assets – listed |
||||||||||||||||||||||||
Other assets – unlisted |
||||||||||||||||||||||||
Fair value of scheme assets at 31 December |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Pension schemes |
Healthcare schemes |
Total |
||||||||||||||||||||||||||||||||||
2021 £m |
2020 £m |
2019 £m |
2021 £m |
2020 £m |
2019 £m |
2021 £m |
2020 £m |
2019 £m |
||||||||||||||||||||||||||||
Unrecognised funded scheme surpluses at 1 January |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Interest on unrecognised funded scheme surpluses |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Movement in year (note 22) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Unrecognised funded scheme surpluses at 31 December |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
2021 |
2020 |
|||||||||||||||||||||||||||||||||||||||||||||||
U.S. |
UK |
Germany |
Canada |
Netherlands |
Switzerland |
U.S. |
UK |
Germany |
Canada |
Netherlands |
Switzerland |
|||||||||||||||||||||||||||||||||||||
Rate of increase in salaries (%) |
||||||||||||||||||||||||||||||||||||||||||||||||
Rate of increase in pensions in payment (%) |
||||||||||||||||||||||||||||||||||||||||||||||||
Rate of increase in deferred pensions (%) |
||||||||||||||||||||||||||||||||||||||||||||||||
Discount rate (%) |
||||||||||||||||||||||||||||||||||||||||||||||||
General inflation (%) |
2021 |
2020 |
|||||||||||||||||||||||||||||||||||||||||||||||
U.S. |
UK |
Germany |
Canada |
Netherlands |
Switzerland |
U.S. |
UK |
Germany |
Canada |
Netherlands |
Switzerland |
|||||||||||||||||||||||||||||||||||||
Weighted average duration of liabilities (years) |
BAT Annual Report and Form 20-F 2021 |
U.S. |
||
UK |
||
Germany |
||
Canada |
||
Netherlands |
||
Switzerland |
U.S. |
UK |
Germany |
Canada |
Netherlands |
Switzerland |
|||||||||||||||||||||||||||||||||||||||||||
Male |
Female |
Male |
Female |
Male |
Female |
Male |
Female |
Male |
Female |
Male |
Female |
|||||||||||||||||||||||||||||||||||||
31 December 2021 |
||||||||||||||||||||||||||||||||||||||||||||||||
Member age 65 (current life expectancy) |
||||||||||||||||||||||||||||||||||||||||||||||||
Member age 45 (life expectancy at age 65) |
||||||||||||||||||||||||||||||||||||||||||||||||
31 December 2020 |
||||||||||||||||||||||||||||||||||||||||||||||||
Member age 65 (current life expectancy) |
||||||||||||||||||||||||||||||||||||||||||||||||
Member age 45 (life expectancy at age 65) |
1 year increase £m |
1 year decrease £m |
0.25 percentage point increase £m |
0.25 percentage point decrease £m |
|||||||||||||
Average life expectancy – increase/(decrease) of scheme liabilities |
( |
) |
||||||||||||||
Rate of inflation – increase/(decrease) of scheme liabilities |
( |
) | ||||||||||||||
Discount rate – (decrease)/increase of scheme liabilities |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Stock relief £m |
Excess of capital allowances over depreciation £m |
Tax losses £m |
Undistributed earnings of associates and subsidiaries £m |
Retirement benefits £m |
Trademarks £m |
Other temporary differences £m |
Total £m |
|||||||||||||||||||||||||
1 January 2021 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||
Credited/(charged) to the income statement |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Credited/(charged) relating to changes in tax rates |
( |
) |
||||||||||||||||||||||||||||||
Charged to other comprehensive income |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||
31 December 2021 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||
1 January 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Credited/(charged) to the income statement |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Credited relating to changes in tax rates |
||||||||||||||||||||||||||||||||
(Charged)/credited to other comprehensive income |
( |
) |
||||||||||||||||||||||||||||||
31 December 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
|||||||
Trade receivables |
||||||||
Loans and other receivables |
||||||||
Prepayments and accrued income |
||||||||
Current |
||||||||
Non-current |
||||||||
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 £m |
2020 £m |
|||||||
Trade receivables – gross |
||||||||
Trade receivables – allowance |
( |
) |
( |
) | ||||
Loans and other receivables – gross |
||||||||
Loans and other receivables – allowance |
||||||||
Prepayments and accrued income |
||||||||
Net trade and other receivables per balance sheet |
2021 |
2020 |
|||||||||||||||||||||||
Trade receivables £m |
Loans and other receivables £m |
Total £m |
Trade receivables £m |
Loans and other receivables £m |
Total £m |
|||||||||||||||||||
1 January |
||||||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Provided in the year |
||||||||||||||||||||||||
Released |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
31 December |
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
|||||||||||||||||||||||
Fair value through P&L |
Fair value through OCI |
Total £m |
Fair value through P&L |
Fair value through OCI |
Total £m |
|||||||||||||||||||
1 January |
||||||||||||||||||||||||
Difference on exchange |
( |
) |
( |
) | ||||||||||||||||||||
Additions |
||||||||||||||||||||||||
Disposals |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Provisions |
( |
) |
( |
) |
||||||||||||||||||||
Fair value movements |
||||||||||||||||||||||||
31 December |
||||||||||||||||||||||||
Current |
||||||||||||||||||||||||
Non-current |
||||||||||||||||||||||||
2021 £m |
2020 £m |
|||||||
Cash outflow from investments held at fair value |
||||||||
Cash outflow from loans and other receivables |
||||||||
Cash outflows from investments per cash flow statement |
||||||||
Cash inflow from investments held at fair value |
( |
) |
( |
) | ||||
Cash inflow from loans and other receivables |
( |
) |
( |
) | ||||
Cash inflows from investments per cash flow statement |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
|||||||||||||||
Assets £m |
Liabilities £m |
Assets £m |
Liabilities £m |
|||||||||||||
Fair value hedges |
||||||||||||||||
– interest rate swaps |
– |
|||||||||||||||
– cross-currency swaps |
– |
– |
||||||||||||||
Cash flow hedges |
||||||||||||||||
– cross-currency swaps |
– |
|||||||||||||||
– forward foreign currency contracts |
||||||||||||||||
Net investment hedges |
||||||||||||||||
– forward foreign currency contracts |
||||||||||||||||
Held-for-trading* |
||||||||||||||||
– interest rate swaps |
||||||||||||||||
– forward foreign currency contracts |
||||||||||||||||
Total |
||||||||||||||||
Current |
||||||||||||||||
Non-current |
||||||||||||||||
Derivatives |
||||||||||||||||
– in respect of net debt** |
||||||||||||||||
– other |
||||||||||||||||
* |
Derivatives which do not meet the tests for hedge accounting under IFRS 9 or which are not designated as hedging instruments are referred to as ‘held-for-trading’. These derivatives principally consist of interest rate swaps and forward foreign currency contracts which have not been designated as hedges due to their value changes offsetting with other components of net finance costs relating to financial assets and financial liabilities. The Group does not use derivatives for speculative purposes. All derivatives are undertaken for risk management purposes. |
** |
Derivatives in respect of net debt are in a net asset position of £ |
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
|||||||||||||||||||||||||||||||
Assets |
Liabilities |
Assets |
Liabilities |
|||||||||||||||||||||||||||||
Inflow £m |
Outflow £m |
Inflow £m |
Outflow £m |
Inflow £m |
Outflow £m |
Inflow £m |
Outflow £m |
|||||||||||||||||||||||||
Within one year |
||||||||||||||||||||||||||||||||
– forward foreign currency contracts |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||
– cross-currency swaps |
( |
) |
( |
) |
( |
) |
– |
– |
||||||||||||||||||||||||
Between one and two years |
||||||||||||||||||||||||||||||||
– forward foreign currency contracts |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||
– cross-currency swaps |
( |
) |
( |
) |
( |
) |
– |
– |
||||||||||||||||||||||||
Between two and three years |
||||||||||||||||||||||||||||||||
– cross-currency swaps |
( |
) |
( |
) |
( |
) |
– |
– |
||||||||||||||||||||||||
Between three and four years |
||||||||||||||||||||||||||||||||
– cross-currency swaps |
( |
) |
( |
) |
( |
) |
– |
– |
||||||||||||||||||||||||
Between four and five years |
||||||||||||||||||||||||||||||||
– cross-currency swaps |
( |
) |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||||
Beyond five years |
||||||||||||||||||||||||||||||||
– cross-currency swaps |
( |
) |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||||
( |
) |
( |
) |
( |
) |
( |
) |
2021 |
2020 |
|||||||||||||||
Assets Inflow/ (outflow) £m |
Liabilities Outflow/ (inflow) £m |
Assets Inflow/ (outflow) £m |
Liabilities Outflow/ (inflow) £m |
|||||||||||||
Within one year |
||||||||||||||||
Between one and two years |
||||||||||||||||
Between two and three years |
||||||||||||||||
Between three and four years |
( |
) |
– |
– |
||||||||||||
Between four and five years |
– |
– |
– |
|||||||||||||
Beyond five years |
– |
( |
) |
– |
– |
|||||||||||
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
|||||||||||||||
Nominal amount of hedging instrument £m |
Changes in fair value used for calculating hedge ineffectiveness £m |
Nominal amount of hedging instrument £m |
Changes in fair value used for calculating hedge ineffectiveness £m |
|||||||||||||
Interest rate risk exposure: |
||||||||||||||||
Fair value hedges |
||||||||||||||||
– interest rate swaps |
( |
) |
( |
) | ||||||||||||
– cross-currency swaps |
( |
) |
||||||||||||||
Cash flow hedges |
||||||||||||||||
– cross-currency swaps |
( |
) | ||||||||||||||
Foreign currency risk exposure: |
||||||||||||||||
Cash flow hedges |
||||||||||||||||
– forward foreign currency contracts |
( |
) | ||||||||||||||
Net investment hedges (derivative related) |
||||||||||||||||
– forward foreign currency contracts |
( |
) |
||||||||||||||
Net investment hedges (non-derivative related) |
||||||||||||||||
– debt (carrying value) in borrowings designated as net investment hedges of net assets |
( |
) |
2021 £m |
2020 £m |
|||||||
Raw materials and consumables |
||||||||
Finished goods and work in progress |
||||||||
Goods purchased for resale |
||||||||
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
|||||||
Cash and bank balances |
||||||||
Cash equivalents |
||||||||
2021 £m |
2020 £m |
|||||||
Functional currency |
||||||||
U.S. dollar |
||||||||
Euro |
||||||||
Other currencies |
||||||||
2021 £m |
2020 £m |
|||||||
Cash and cash equivalents as above |
||||||||
Less overdrafts and accrued interest |
( |
) |
( |
) | ||||
Net cash and cash equivalents |
Ordinary shares of 25p each Number of shares |
£m |
|||||||
Allotted and fully paid |
||||||||
1 January 2021 |
||||||||
Changes during the year |
||||||||
– share option schemes |
||||||||
31 December 2021 |
||||||||
Allotted and fully paid |
||||||||
1 January 2020 |
||||||||
Changes during the year |
||||||||
– share option schemes |
||||||||
31 December 2020 |
||||||||
Allotted and fully paid |
||||||||
1 January 2019 |
||||||||
Changes during the year |
||||||||
– share option schemes |
||||||||
31 December 2019 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Share premium account £m |
Capital redemption reserves £m |
Merger reserves £m |
Total £m |
|||||||||||||
31 December 2021 |
||||||||||||||||
31 December 2020 |
||||||||||||||||
31 December 2019 |
a. |
In 1999, shares were issued for the acquisition of the Rothmans International B.V. Group and the difference between the fair value of shares issued and their nominal value of £ |
b. |
On 25 July 2017, the Group announced the completion of the acquisition of the remaining |
BAT Annual Report and Form 20-F 2021 |
Retained earnings |
||||||||||||||||||||||||||||||||
Translation reserve (i) £m |
Hedging reserve (ii) £m |
Fair value reserve (iii) £m |
Revaluation reserve (iv) £m |
Other (v) £m |
Total other reserves £m |
Treasury shares (vi) £m |
Other £m |
|||||||||||||||||||||||||
1 January 2021 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||
Comprehensive income and expense |
||||||||||||||||||||||||||||||||
Profit for the year |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
Foreign currency translation and hedges of net investments in foreign operations |
||||||||||||||||||||||||||||||||
– differences on exchange from translation of foreign operations |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– reclassified and reported in profit for the year |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– net investment hedges – net fair value gains on derivatives |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– net investment hedges – differences on exchange on borrowings |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||||||||||
– net fair value gains |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– reclassified and reported in profit for the year |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– tax on net fair value gains in respect of cash flow hedges (note 10(f)) |
– |
( |
) |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
Investments held at fair value |
||||||||||||||||||||||||||||||||
– net fair value gains |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
Associates – share of OCI, net of tax (note 9) |
( |
) |
– |
– |
– |
( |
) |
– |
– |
|||||||||||||||||||||||
Retirement benefit schemes |
||||||||||||||||||||||||||||||||
– net actuarial gains (note 15) |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
– surplus recognition (note 15) |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
– tax on actuarial gains in respect of subsidiaries (note 10(f)) |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
Associates – share of OCI, net of tax (note 9) |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||||
Other changes in equity |
||||||||||||||||||||||||||||||||
Cash flow hedges reclassified and reported in total assets |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
Employee share options |
||||||||||||||||||||||||||||||||
– value of employee services |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
– treasury shares used for share option schemes |
– |
– |
– |
– |
– |
– |
( |
) | ||||||||||||||||||||||||
Dividends and other appropriations |
||||||||||||||||||||||||||||||||
– ordinary shares |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
Purchase of own shares |
||||||||||||||||||||||||||||||||
– held in employee share ownership trusts |
– |
– |
– |
– |
– |
– |
( |
) |
– |
|||||||||||||||||||||||
Perpetual hybrid bonds |
||||||||||||||||||||||||||||||||
– coupons paid |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
– tax on coupons paid |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
Non-controlling interests – acquisitions (note 27(b)) |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
Other movements |
– |
– |
– |
– |
– |
– |
( |
) | ||||||||||||||||||||||||
31 December 2021 |
( |
) |
( |
) |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Retained earnings |
||||||||||||||||||||||||||||||||
Translation reserve (i) £m |
Hedging reserve (ii) £m |
Fair value reserve (iii) £m |
Revaluation reserve (iv) £m |
Other (v) £m |
Total other reserves £m |
Treasury shares (vi) £m |
Other £m |
|||||||||||||||||||||||||
1 January 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Comprehensive income and expense |
||||||||||||||||||||||||||||||||
Profit for the year |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
Foreign currency translation and hedges of net investments in foreign operations |
||||||||||||||||||||||||||||||||
– differences on exchange from translation of foreign operations |
( |
) |
– |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
– net investment hedges – net fair value losses on derivatives |
( |
) |
– |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
– net investment hedges – differences on exchange on borrowings |
( |
) |
– |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||||||||||
– net fair value losses |
– |
( |
) |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
– reclassified and reported in profit for the year |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– tax on net fair value losses in respect of cash flow hedges (note 10(f)) |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
Associates – share of OCI, net of tax (note 9) |
( |
) |
( |
) |
– |
– |
– |
( |
) |
– |
– |
|||||||||||||||||||||
Retirement benefit schemes |
||||||||||||||||||||||||||||||||
– net actuarial gains (note 15) |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
– surplus recognition (note 15) |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
– tax on actuarial gains in respect of subsidiaries (note 10(f)) |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
Associates – share of OCI, net of tax (note 9) |
– |
– |
( |
) |
– |
– |
( |
) |
– |
( |
) | |||||||||||||||||||||
Other changes in equity |
||||||||||||||||||||||||||||||||
Cash flow hedges reclassified and reported in total assets |
– |
( |
) |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
Employee share options |
||||||||||||||||||||||||||||||||
– value of employee services |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
– treasury shares used for share option schemes |
– |
– |
– |
– |
– |
– |
( |
) | ||||||||||||||||||||||||
Dividends and other appropriations |
||||||||||||||||||||||||||||||||
– ordinary shares |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
Purchase of own shares |
||||||||||||||||||||||||||||||||
– held in employee share ownership trusts |
– |
– |
– |
– |
– |
– |
( |
) |
– |
|||||||||||||||||||||||
Other movements |
– |
– |
– |
– |
– |
– |
( |
) | ||||||||||||||||||||||||
31 December 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Retained earnings |
||||||||||||||||||||||||||||||||
Translation reserve (i) £m |
Hedging reserve (ii) £m |
Fair value reserve (iii) £m |
Revaluation reserve (iv) £m |
Other (v) £m |
Total other reserves £m |
Treasury shares (vi) £m |
Other £m |
|||||||||||||||||||||||||
1 January 2019 |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Comprehensive income and expense |
||||||||||||||||||||||||||||||||
Profit for the year |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
Foreign currency translation and hedges of net investments in foreign operations |
||||||||||||||||||||||||||||||||
– differences on exchange from translation of foreign operations |
( |
) |
– |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
– net investment hedges – net fair value gains on derivatives |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– net investment hedges – differences on exchange on borrowings |
( |
) |
– |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||||||||||||||
– net fair value losses |
– |
( |
) |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
– reclassified and reported in profit for the year |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– tax on net fair value losses in respect of cash flow hedges (note 10(f)) |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
Associates – share of OCI, net of tax (note 9) |
( |
) |
– |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
Retirement benefit schemes |
||||||||||||||||||||||||||||||||
– net actuarial losses (note 15) |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
– surplus recognition (note 15) |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
– tax on actuarial losses in respect of subsidiaries (note 10(f)) |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
Associates – share of OCI, net of tax (note 9) |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
Other changes in equity |
||||||||||||||||||||||||||||||||
Cash flow hedges reclassified and reported in total assets |
– |
( |
) |
– |
– |
– |
( |
) |
– |
– |
||||||||||||||||||||||
Employee share options |
||||||||||||||||||||||||||||||||
– value of employee services |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||
Dividends and other appropriations |
||||||||||||||||||||||||||||||||
– ordinary shares |
– |
– |
– |
– |
– |
– |
– |
( |
) | |||||||||||||||||||||||
Purchase of own shares |
||||||||||||||||||||||||||||||||
– held in employee share ownership trusts |
– |
– |
– |
– |
– |
– |
( |
) |
– |
|||||||||||||||||||||||
Other movements |
– |
– |
– |
– |
– |
– |
( |
) | ||||||||||||||||||||||||
31 December 2019 |
( |
) |
( |
) |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
(a) |
£ |
(b) |
In the 1999 Rothmans transaction, convertible redeemable preference shares were issued as part of the consideration. The discount on these shares was amortised by crediting other reserves and charging retained earnings. The £ |
BAT Annual Report and Form 20-F 2021 |
Currency |
Maturity dates |
Interest rates |
2021 £m |
2020 £m |
||||||||||
Eurobonds |
||||||||||||||
– |
||||||||||||||
Bonds issued pursuant to Rules under the U.S. Securities Act (as amended) |
||||||||||||||
Bonds and notes |
||||||||||||||
Commercial paper |
– |
|||||||||||||
Other loans |
||||||||||||||
Bank loans |
||||||||||||||
Bank overdrafts |
||||||||||||||
Lease liabilities |
||||||||||||||
Per balance sheet |
Contractual gross maturities |
|||||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||||
Within one year |
||||||||||||||||||
Between one and two years |
||||||||||||||||||
Between two and three years |
||||||||||||||||||
Between three and four years |
||||||||||||||||||
Between four and five years |
||||||||||||||||||
Beyond five years |
||||||||||||||||||
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Functional currency £m |
U.S. dollar £m |
UK sterling £m |
Euro £m |
Other currencies £m |
Total £m |
|||||||||||||||||||
31 December 2021 |
||||||||||||||||||||||||
Total borrowings |
||||||||||||||||||||||||
Effect of derivative financial instruments |
||||||||||||||||||||||||
– cross-currency swaps |
– |
( |
) |
( |
) |
– |
( |
) | ||||||||||||||||
– forward foreign currency contracts |
( |
) |
( |
) |
– |
|||||||||||||||||||
31 December 2020 |
||||||||||||||||||||||||
Total borrowings |
||||||||||||||||||||||||
Effect of derivative financial instruments |
||||||||||||||||||||||||
– cross-currency swaps |
– |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||
– forward foreign currency contracts |
( |
) |
– |
( |
) |
|||||||||||||||||||
Within 1 year £m |
Between 1-2 years £m |
Between 2-3 years £m |
Between 3-4 years £m |
Between 4-5 years £m |
Beyond 5 years £m |
Total £m |
||||||||||||||||||||||
31 December 2021 |
||||||||||||||||||||||||||||
Total borrowings |
||||||||||||||||||||||||||||
Effect of derivative financial instruments |
||||||||||||||||||||||||||||
– interest rate swaps |
– |
( |
) |
( |
) |
– |
( |
) |
– |
|||||||||||||||||||
– cross-currency swaps |
( |
) |
– |
( |
) |
– |
( |
) |
( |
) | ||||||||||||||||||
31 December 2020 |
||||||||||||||||||||||||||||
Total borrowings |
||||||||||||||||||||||||||||
Effect of derivative financial instruments |
||||||||||||||||||||||||||||
– interest rate swaps |
( |
) |
– |
– |
– |
– |
– |
|||||||||||||||||||||
– cross-currency swaps |
– |
( |
) |
– |
( |
) |
( |
) |
( |
) | ||||||||||||||||||
Per balance sheet |
Contractual gross maturities |
|||||||||||||||
2021 £m |
2020 £m |
2021 £m |
2020 £m |
|||||||||||||
Within one year |
||||||||||||||||
Between one and two years |
||||||||||||||||
Between two and three years |
||||||||||||||||
Between three and four years |
||||||||||||||||
Between four and five years |
||||||||||||||||
Beyond five years |
||||||||||||||||
BAT Annual Report and Form 20-F 2021 |
2021 £m |
||||||||||||||||||||
Opening balance |
Cash flow |
Foreign exchange |
Fair value, accrued interest and other |
Closing balance |
||||||||||||||||
Borrowings (excluding lease liabilities)* |
( |
) |
( |
) |
( |
) |
||||||||||||||
Lease liabilities |
( |
) |
( |
) |
||||||||||||||||
Derivatives in respect of net debt (note 19) |
( |
) |
( |
) |
– |
( |
) | |||||||||||||
Cash and cash equivalents (note 21) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Current investments held at fair value (note 18) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
( |
) |
2020 £m |
||||||||||||||||||||||||
Opening balance |
Subsidiaries acquired |
Cash flow |
Foreign exchange |
Fair value, accrued interest and other |
Closing balance |
|||||||||||||||||||
Borrowings (excluding lease liabilities)* |
– |
( |
) |
( |
) |
( |
) |
|||||||||||||||||
Lease liabilities |
( |
) |
( |
) |
||||||||||||||||||||
Derivatives in respect of net debt (note 19) |
( |
) |
– |
( |
) |
( |
) |
( |
) | |||||||||||||||
Cash and cash equivalents (note 21) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
Current investments held at fair value (note 18) |
( |
) |
– |
( |
) |
( |
) |
( |
) | |||||||||||||||
( |
) |
( |
) |
( |
) |
2021 £m |
2020 £m |
|||||||
Cash flows per net debt statement |
( |
) |
( |
) | ||||
Non-financing cash flows included in net debt |
||||||||
Interest paid |
( |
) |
( |
) | ||||
Interest element of lease liabilities |
( |
) |
( |
) | ||||
Remaining cash flows relating to derivative financial instruments |
( |
) | ||||||
Purchases of own shares held in employee share ownership trusts |
( |
) |
( |
) | ||||
Proceeds from issue of perpetual hybrid bonds |
– |
|||||||
Coupon paid on perpetual hybrid bonds |
( |
) |
– |
|||||
Dividends paid to owners of the parent |
( |
) |
( |
) | ||||
Capital injection from and purchase of non-controlling interests |
||||||||
Dividends paid to non-controlling interests |
( |
) |
( |
) | ||||
Other |
||||||||
Net cash used in financing activities per cash flow statement |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Restructuring of existing businesses £m |
Employee- related benefits £m |
Fox River £m |
Other provisions £m |
Total £m |
||||||||||||||||
1 January 2021 |
||||||||||||||||||||
Differences on exchange |
( |
) |
( |
) |
– |
( |
) |
( |
) | |||||||||||
Provided in respect of the year (*) |
– |
|||||||||||||||||||
Utilised during the year |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
– in respect of MSA litigation (Texas, Minnesota, Mississippi) |
– |
– |
– |
( |
) |
( |
) | |||||||||||||
– in respect of other |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
31 December 2021 |
||||||||||||||||||||
Analysed on the balance sheet as |
||||||||||||||||||||
– current |
||||||||||||||||||||
– non-current |
||||||||||||||||||||
Restructuring of existing businesses £m |
Employee- related benefits £m |
Fox River £m |
Other provisions £m |
Total £m |
||||||||||||||||
1 January 2020 |
||||||||||||||||||||
Differences on exchange |
( |
) |
– |
( |
) |
( |
) | |||||||||||||
Subsidiaries acquired |
– |
– |
– |
|||||||||||||||||
Provided in respect of the year (*) |
– |
|||||||||||||||||||
– in respect of MSA litigation (Texas, Minnesota, Mississippi) |
– |
– |
– |
|||||||||||||||||
– in respect of other |
– |
|||||||||||||||||||
Utilised during the year |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
– in respect of excise dispute in Russia |
– |
– |
– |
( |
) |
( |
) | |||||||||||||
– in respect of other |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
31 December 2020 |
||||||||||||||||||||
Analysed on the balance sheet as |
||||||||||||||||||||
– current |
||||||||||||||||||||
– non-current |
||||||||||||||||||||
* |
Amounts provided above are shown net of reversals of unused provisions which include reversals of £ |
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
|||||||
Trade payables |
||||||||
Duty, excise and other taxes |
||||||||
Accrued charges and deferred income |
||||||||
FII GLO (note 10(b)) |
||||||||
Social security and other taxation |
||||||||
Sundry payables |
||||||||
Current |
||||||||
Non-current |
||||||||
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
BAT Annual Report and Form 20-F 2021 |
– |
In February 2021, the Group repaid a € |
– |
In June 2021, the Group repaid £ |
– |
In July, August, September and November 2021, the Group repaid £ € € |
– |
The Group issued perpetual hybrid bonds totalling € |
– |
In April 2020, the Group accessed the U.S. dollar market under its SEC Shelf Programme, raising a total of US$ € |
– |
In May and June 2020, the Group repaid US$ |
– |
In July 2020, the Group repaid a € |
– |
In September 2020, the Group accessed the U.S. dollar market under its SEC Shelf programme, raising a total of US$ € |
– |
In October 2020, the Group exercised the make whole redemption provision to fully redeem the remaining amounts outstanding following the tender offer on |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
|||||||||||||||||||||||||||||||
Level 1 £m |
Level 2 £m |
Level 3 £m |
Total £m |
Level 1 £m |
Level 2 £m |
Level 3 £m |
Total £m |
|||||||||||||||||||||||||
Assets at fair value |
||||||||||||||||||||||||||||||||
Investment held at fair value (note 18) |
– |
– |
||||||||||||||||||||||||||||||
Derivatives relating to |
||||||||||||||||||||||||||||||||
– interest rate swaps (note 19) |
– |
– |
– |
– |
||||||||||||||||||||||||||||
– cross-currency swaps (note 19) |
– |
– |
– |
– |
||||||||||||||||||||||||||||
– forward foreign currency contracts (note 19) |
– |
– |
– |
– |
||||||||||||||||||||||||||||
Assets at fair value |
||||||||||||||||||||||||||||||||
Liabilities at fair value |
||||||||||||||||||||||||||||||||
Derivatives relating to |
||||||||||||||||||||||||||||||||
– interest rate swaps (note 19) |
– |
– |
– |
– |
||||||||||||||||||||||||||||
– cross-currency swaps (note 19) |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||
– forward foreign currency contracts (note 19) |
– |
– |
– |
– |
||||||||||||||||||||||||||||
Liabilities at fair value |
– |
– |
– |
– |
2021 |
2020 |
|||||||||||||||||||||||||||
Amount presented in the Group balance sheet* £m |
Related amounts not offset in the Group balance sheet £m |
Net amount £m |
Amount presented in the Group balance sheet* £m |
Related amounts not offset in the Group balance sheet £m |
Net amount £m |
|||||||||||||||||||||||
Financial assets |
||||||||||||||||||||||||||||
– Derivative financial instruments (note 19) |
( |
) |
( |
) |
||||||||||||||||||||||||
Financial liabilities |
||||||||||||||||||||||||||||
– Derivative financial instruments (note 19) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||
– |
– |
* |
No financial instruments have been offset in the Group balance sheet. |
BAT Annual Report and Form 20-F 2021 |
2021 |
||||||||||||||||||||
Carrying amount of the hedged item £m |
Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount of the hedged item £m |
Line item in the statement of financial position where the hedged item is included |
Changes in fair value used for calculating hedge ineffectiveness £m |
Cash flow hedge reserve (gross of tax) £m |
||||||||||||||||
Fair value hedges |
||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||
– borrowings (liabilities) |
||||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||
– borrowings (liabilities) |
( |
) |
( |
) |
2020 |
||||||||||||||||||||
Carrying amount of the hedged item £m |
Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount of the hedged item £m |
Line item in the statement of financial position where the hedged item is included |
Changes in fair value used for calculating hedge ineffectiveness £m |
Cash flow hedge reserve (gross of tax) £m |
||||||||||||||||
Fair value hedges |
||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||
– borrowings (liabilities) |
( |
) |
||||||||||||||||||
Cash flow hedges |
||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||
– borrowings (liabilities) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
2019 |
||||||||||||||||||||||
Equity- settled £m |
Cash- settled £m |
Equity- settled £m |
Cash- settled £m |
Equity- settled £m |
Cash- settled £m |
|||||||||||||||||||
LTIP (note (a)) |
– |
– |
||||||||||||||||||||||
DSBS (note (b)) |
||||||||||||||||||||||||
Other schemes |
– |
– |
– |
|||||||||||||||||||||
Total recognised in the income statement (note 3) |
2021 |
2020 |
|||||||||||||||||||
Vested £m |
Unvested £m |
Vested £m |
Unvested £m |
|||||||||||||||||
LTIP |
||||||||||||||||||||
DSBS |
||||||||||||||||||||
Total liability |
2021 |
2020 |
|||||||||||||||||||
Equity- settled Number of options in thousands |
Cash-settled Number of options in thousands |
Equity- settled Number of options in thousands |
Cash-settled Number of options in thousands |
|||||||||||||||||
Outstanding at start of year |
||||||||||||||||||||
Granted during the period |
||||||||||||||||||||
Exercised during the period |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Forfeited during the period |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Outstanding at end of year |
||||||||||||||||||||
Exercisable at end of year |
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
|||||||||||||||||||
Equity- settled Number of options in thousands |
Cash-settled Number of options in thousands |
Equity- settled Number of options in thousands |
Cash-settled Number of options in thousands |
|||||||||||||||||
Outstanding at start of year |
||||||||||||||||||||
Granted during the period |
||||||||||||||||||||
Exercised during the period |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Forfeited during the period |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Outstanding at end of year |
||||||||||||||||||||
Exercisable at end of year |
– |
2021 |
2020 |
|||||||||||||||||
LTIP |
DSBS |
LTIP |
DSBS |
|||||||||||||||
Expected volatility (%) |
||||||||||||||||||
Average expected term to exercise (years)* |
||||||||||||||||||
Risk-free rate (%) |
||||||||||||||||||
Expected dividend yield (%) |
||||||||||||||||||
Share price at date of grant (£) |
||||||||||||||||||
Fair value at grant date (£)* |
||||||||||||||||||
Fair value at grant date (£)* – Management Board |
* |
Where two figures have been quoted for the Long-Term Incentive Plan, the numbers relate to PSP and RSP awards, respectively. |
2021 LTIP (PSP) |
2020 LTIP (PSP) |
|||||||
Average share price volatility FMCG comparator group (%) |
||||||||
Average correlation FMCG comparator group (%) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 Number |
2020 Number |
|||||||
U.S. |
||||||||
APME |
||||||||
AMSSA |
||||||||
ENA |
||||||||
Subsidiary undertakings |
||||||||
Associates |
||||||||
2021 £m |
2020 £m |
2019 £m |
||||||||||
Transactions |
||||||||||||
– revenue |
||||||||||||
– purchases |
( |
) |
( |
) |
( |
) | ||||||
– other net income |
||||||||||||
Amounts receivable at 31 December |
||||||||||||
Amounts payable at 31 December |
( |
) |
( |
) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
2019 £m |
||||||||||
The total compensation for key management personnel, including Directors, was: |
||||||||||||
– salaries and other short-term employee benefits |
||||||||||||
– post-employment benefits |
||||||||||||
– share-based payments |
||||||||||||
Executive Directors |
Chairman |
Non-Executive Directors |
Total |
|||||||||||||||||||||||||||||||||||||||||||||
2021 £’000 |
2020 £’000 |
2019 £’000 |
2021 £’000 |
2020 £’000 |
2019 £’000 |
2021 £’000 |
2020 £’000 |
2019 £’000 |
2021 £’000 |
2020 £’000 |
2019 £’000 |
|||||||||||||||||||||||||||||||||||||
Salary; fees; benefits;incentives |
||||||||||||||||||||||||||||||||||||||||||||||||
– salary |
||||||||||||||||||||||||||||||||||||||||||||||||
– fees |
||||||||||||||||||||||||||||||||||||||||||||||||
– taxable benefits |
||||||||||||||||||||||||||||||||||||||||||||||||
– short-term incentives |
||||||||||||||||||||||||||||||||||||||||||||||||
– long-term incentives |
||||||||||||||||||||||||||||||||||||||||||||||||
Sub-total |
||||||||||||||||||||||||||||||||||||||||||||||||
Pension; other emoluments |
||||||||||||||||||||||||||||||||||||||||||||||||
– pension |
||||||||||||||||||||||||||||||||||||||||||||||||
– other emoluments |
||||||||||||||||||||||||||||||||||||||||||||||||
Sub-total |
||||||||||||||||||||||||||||||||||||||||||||||||
Total emoluments |
Award |
Exercised LTIP shares |
Exercise date |
Price per share (£) |
Aggregate gain (£) |
||||||||||||||
Jack Bowles |
||||||||||||||||||
Tadeu Marroco |
Shares |
Price per share (£) 1 |
Face value (£) |
||||||||||
Jack Bowles |
||||||||||||
Tadeu Marroco |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
1. |
The Group is subject to contingencies pursuant to requirements that it complies with relevant laws, regulations and standards. |
2. |
Failure to comply could result in restrictions in operations, damages, fines, increased tax, increased cost of compliance, interest charges, reputational damage or other sanctions. These matters are inherently difficult to quantify. In cases where the Group has an obligation as a result of a past event existing at the balance sheet date, if it is probable that an outflow of economic resources will be required to settle the obligation and if the amount of the obligation can be reliably estimated, a provision will be recognised based on best estimates and management judgement. |
3. |
There are, however, contingent liabilities in respect of litigation, taxes in some countries and guarantees for which no provisions have been made. |
4. |
There are a number of legal and regulatory actions, proceedings and claims against Group companies related to tobacco and New Category products that are pending in a number of jurisdictions. These proceedings include, among other things, claims for personal injury (both individual claims and class actions) and claims for economic loss arising from the treatment of smoking- and health-related diseases (such as medical recoupment claims brought by local governments). |
5. |
The plaintiffs in these cases seek recovery on a variety of legal theories, including negligence, strict liability in tort, design defect, failure to warn, fraud, misrepresentation, violations of unfair and deceptive trade practices statutes, conspiracy, public nuisance, medical monitoring and violations of competition and antitrust laws. The plaintiffs seek various forms of relief, including compensatory and, where available, punitive damages, treble or multiple damages and statutory damages and penalties, creation of medical monitoring and smoking cessation funds, disgorgement of profits, attorneys’ fees, and injunctive and other equitable relief. |
6. |
Although alleged damages often are not determinable from a complaint, and the law governing the pleading and calculation of damages varies from jurisdiction to jurisdiction, compensatory and punitive damages have been specifically pleaded in a number of cases, sometimes in amounts ranging into the hundreds of millions and even hundreds of billions of sterling. |
7. |
With the exception of the Engle Engle |
8. |
Group companies generally do not settle claims. However, Group companies may enter into settlement discussions in some cases, if they believe it is in their best interests to do so. Exceptions to this general approach include, but are not limited to, actions taken pursuant to ‘offer of judgment’ statutes and Filter Cases, as defined below. An ‘offer of judgment,’ if rejected by the plaintiff, preserves the Group’s right to recover attorneys’ fees under certain statutes in the event of a verdict favourable to the Group. Such offers are sometimes made through court-ordered mediations. Other settlements by Group companies include the State Settlement Agreements (as defined in paragraph 41 below), the funding by various tobacco companies of a US$ Broin Engle |
9. |
Although the Group intends to defend all pending cases vigorously, and believes that the Group’s companies have valid bases for appeals of adverse verdicts and valid defences to all actions, and that an outflow of resources related to any individual case is not considered probable, litigation is subject to many uncertainties, and, generally, it is not possible to predict the outcome of any particular litigation pending against Group companies, or to reasonably estimate the amount or range of any possible loss. Furthermore, a number of political, legislative, regulatory and other developments relating to the tobacco industry and cigarette smoking have received wide media attention. These developments may negatively affect the outcomes of tobacco-related legal actions and encourage the commencement of additional similar litigation. Therefore, the Group does not provide estimates of the financial effect of the contingent liabilities represented by such litigation, as such estimates are not practicable. |
10. |
The following table lists the categories of the tobacco-related actions pending against Group companies as of 31 December 2021 and the increase or decrease from the number of cases pending against Group companies as of 31 December 2020. Details of the quantum of past judgments awarded against Group companies, the majority of which are under appeal, are also identified along with any settlements reached during the relevant period. Given the volume and more active nature of the Engle |
BAT Annual Report and Form 20-F 2021 |
Case Type |
Case Numbers as at 31 December 2021 |
Case Numbers as at 31 December 2020 (note 1) |
Change in Number Increase/(decrease) |
|||||||||
U.S. tobacco-related actions |
||||||||||||
Medical reimbursement cases (note 2) |
||||||||||||
Class actions (note 3) |
||||||||||||
Individual smoking and health cases (note 4) |
||||||||||||
Engle |
( |
) | ||||||||||
Broin |
( |
) | ||||||||||
Filter Cases (note 7) |
( |
) | ||||||||||
State Settlement Agreements – Enforcement and Validity (note 8) |
( |
) | ||||||||||
Non-U.S. tobacco-related actions |
||||||||||||
Medical reimbursement cases |
||||||||||||
Class actions (note 9) |
||||||||||||
Individual smoking and health cases (note 10) |
( |
) |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
11. |
Certain terms and phrases used in this note 31 may require some explanation. |
a. |
‘Judgment’ or ‘final judgment’ refers to the final decision of the court resolving the dispute and determining the rights and obligations of the parties. At the trial court level, for example, a final judgment generally is entered by the court after a jury verdict and after post-verdict motions have been decided. In most cases, the losing party can appeal a verdict only after a final judgment has been entered by the trial court. |
b. |
‘Damages’ refers to the amount of money sought by a plaintiff in a complaint, or awarded to a party by a jury or, in some cases, by a judge. ‘Compensatory damages’ are awarded to compensate the prevailing party for actual losses suffered, if liability is proved. In cases in which there is a finding that a defendant has acted wilfully, maliciously or fraudulently, generally based on a higher burden of proof than is required for a finding of liability for compensatory damages, a plaintiff also may be awarded ‘punitive damages’. Although damages may be awarded at the trial court stage, a losing party may be protected from paying any damages until all appellate avenues have been exhausted by posting a supersedeas bond. The amount of such a bond is governed by the law of the relevant jurisdiction and generally is set at the amount of damages plus some measure of statutory interest, modified at the discretion of the appropriate court or subject to limits set by a court or statute. |
c. |
‘Settlement’ refers to certain types of cases in which cigarette manufacturers, including RJRT, B&W and Lorillard Tobacco, have agreed to resolve disputes with certain plaintiffs without resolving the cases through trial. |
d. |
All sums set out in note 31 have been converted to GBP and US$ using the following end closing rates: GBP 1 to US$ |
12. |
Group companies, notably RJRT (individually and as successor by merger to Lorillard Tobacco) and B&W as well as other leading cigarette manufacturers, are defendants in a number of product liability cases. In a number of these cases, the amounts of compensatory and punitive damages sought are significant. |
13. |
The total number of U.S. tobacco product liability cases pending at 31 December 2021 involving RJRT, B&W and/or Lorillard Tobacco was approximately |
14. |
Since many of these pending cases seek unspecified damages, it is not possible to quantify the total amounts being claimed, but the aggregate amounts involved in such litigation are significant, possibly totalling billions of U.S. dollars. The cases fall into |
15. |
RJRT (individually and as successor by merger to Lorillard Tobacco), American Snuff Co., Santa Fe Natural Tobacco Company, Inc. (SFNTC), R.J. Reynolds Vapor Company (RJR Vapor), Reynolds American, Lorillard Inc., other Reynolds American affiliates and indemnitees, including but not limited to B&W (collectively, the Reynolds Defendants), believe that they have valid defences to the tobacco-related litigation claims against them, as well as valid bases for appeal of adverse verdicts against them. The Reynolds Defendants have, through their counsel, filed pleadings and memoranda in pending tobacco-related litigation that set forth and discuss a number of grounds and defences that they and their counsel believe have a valid basis in law and fact. |
16. |
Scheduled trials. Trial schedules are subject to change, and many cases are dismissed before trial. In the U.S., there are Engle Engle |
17. |
Trial results. From 1 January 2019 through 31 December 2021, Engle |
BAT Annual Report and Form 20-F 2021 |
18. |
These civil actions seek to recover amounts spent by government entities and other third-party providers on healthcare and welfare costs claimed to result from illnesses associated with smoking. |
19. |
At 31 December 2021, Crow Creek Sioux Tribe v. American Tobacco Co. |
20. |
On 22 September 1999, the U.S. Department of Justice brought an action in the U.S. District Court for the District of Columbia against various industry members, including RJRT, B&W, Lorillard Tobacco, B.A.T Industries p.l.c. (Industries) and Investments ( United States v. Philip Morris USA Inc. |
21. |
Industries was dismissed for lack of personal jurisdiction on 28 September 2000. In addition, Investments was a defendant at the trial, but intervening changes in controlling law post-trial led to a 28 March 2011 court ruling that the court’s Final Judgment and Remedial Order no longer applied to Investments prospectively, and for this reason, Investments would not have to comply with any of the remaining injunctive remedies being sought by the government. As the government did not appeal the 28 March 2011 ruling, this means that Investments is no longer in the case and is not subject to any injunctive relief that the court is expected to order against the remaining defendants. As the case continued as against RJRT and Lorillard Tobacco with respect to injunctive relief and related matters, the following is noted. |
22. |
The non-jury trial of the RICO portion of the claim began on 21 September 2004 and ended on 9 June 2005. On 17 August 2006, the federal district court issued its Final Judgment and Remedial Order, which found certain defendants, including RJRT, B&W, Lorillard Tobacco and Investments, had violated RICO, but did not impose any direct financial penalties. The district court instead enjoined the defendants from committing future racketeering acts, participating in certain trade organisations, making misrepresentations concerning smoking and health and youth marketing, and using certain brand descriptors such as ‘low tar’, ‘light’, ‘ultra-light’, ‘mild’ and ‘natural’. The district court also ordered the defendants to issue ‘corrective communications’ on |
23. |
Defendants, including RJRT, B&W, Lorillard Tobacco and Investments, appealed, and the U.S. government cross-appealed to the DC Circuit. On 22 May 2009, the DC Circuit affirmed the federal district court’s RICO liability judgment, but vacated the order and remanded for further factual findings and clarification as to whether liability should be imposed against B&W, based on changes in the nature of B&W’s business operations (including the extent of B&W’s control over tobacco operations). The court also remanded on three other discrete issues relating to the injunctive remedies, including for the district court ‘to reformulate’ the injunction on the use of low-tar descriptors ‘to exempt foreign activities that have no substantial, direct, and foreseeable domestic effects,’ and for the district court to evaluate whether corrective communications could be required at point-of-sale displays (which requirement the DC Circuit vacated). On 28 June 2010, the U.S. Supreme Court denied the parties’ petitions for further review. |
24. |
On 22 December 2010, the district court dismissed B&W from the litigation. In November 2012, the trial court entered an order setting forth the text of the corrective statements and directed the parties to engage in discussions with the Special Master to implement them. After various proceedings and appeals, the federal district court in October 2017 ordered RJRT and the other U.S. tobacco company defendants to fund the publishing of compelled public statements in various U.S. media outlets, including in newspapers, on television, on the companies’ websites, and in onserts on cigarette packaging. The compelled public statements in newspapers and on television were completed in 2018 and in package onserts were completed in mid-2020. Also, the compelled public statements now appear on RJRT websites. The district court is considering mandating the display of the compelled public statements at retail point of sale; an evidentiary hearing is scheduled to begin on 13 June 2022. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
25. |
At 31 December 2021, RJRT, B&W and Lorillard Tobacco were named as defendants in two separate actions attempting to assert claims on behalf of classes of persons allegedly injured or financially impacted by their smoking, one asserting claims of violation of the Americans With Disabilities Act of 1990, and SFNTC was named in |
26. |
A total of |
27. |
Jones v. American Tobacco Co. |
28. |
Young v. American Tobacco Co. Scott v. American Tobacco Co. |
29. |
In July 1998, trial began in Engle v. R. J. Reynolds Tobacco Co. |
30. |
In July 2000, the jury in Phase II awarded the class a total of approximately US$ Engle |
31. |
This decision was appealed and ultimately resulted in the Florida Supreme Court in December 2006 decertifying the class and allowing judgments entered for only Engle Engle Engle Engle |
32. |
During 2015, RJRT and Lorillard Tobacco, together with Philip Morris USA Inc. (PM USA), settled virtually all of the Engle Engle |
BAT Annual Report and Form 20-F 2021 |
33. |
As at 31 December 2021, there were approximately Engle Engle |
34. |
Engle |
35. |
The following chart identifies the number of trials in Engle |
Total number of trials |
41 | |
Number of trials resulting in plaintiffs’ verdicts |
21** | |
Total damages awarded in final judgments against RJRT |
US$224,990,000 (approximately | |
£166 million) | ||
Amount of overall damages comprising ‘compensatory damages’ (approximately) |
US$65,440,000 (of overall | |
US$224,990,000) (approximately | ||
£48 million of £166 million) | ||
Amount of overall damages comprising ‘punitive damages’ (approximately) |
US$159,550,000 (of overall | |
US$224,990,000) (approximately | ||
£118 million of £166 million) |
Number of adverse judgments appealed by RJRT |
13 (note 12) | |
Number of adverse judgments, in which RJRT still has time to file an appeal |
4 | |
Number of adverse judgments in which an appeal was not, and can no longer be, sought |
3 | |
Appeals of individual Engle |
||
Number of adverse judgments appealed by RJRT |
15 (note 13) |
a. |
5 appeals remain undecided in the District Courts of Appeal; and |
b. |
8 appeals were decided and/or closed in the District Court of Appeals. Of these 8 appeals, 4 were affirmed in favour of plaintiff (review of by the Florida Supreme Court has been sought in 3 of the 4 cases), 3 were reversed for a new trial, and 1 was voluntarily dismissed and judgment paid. |
a. |
5 appeals remain undecided in the District Courts of Appeal; |
b. |
9 appeals were decided and/or closed in the District Courts of Appeal, and 1 appeal was reversed by the Eleventh Circuit. Of these appeals, 5 were affirmed in favour of plaintiff, 3 in which review of Florida Supreme Court was sought, 1 was voluntarily dismissed and judgment paid, 1 in which the Eleventh Circuit reversed the district court’s denial of Defendants’ motion for judgment in accordance with the verdict, and 3 were reversed for a new trial; and |
c |
does not include four cases that were appealed prior to the relevant time period but which remain pending before the Florida Supreme Court. |
36. |
By statute, Florida applies a US$ Engle Engle Engle Engle |
37. |
In 2021, RJRT or Lorillard Tobacco paid judgments in Engle |
38. |
In addition, accruals for damages and attorneys’ fees and statutory interest for Starr-Blundell v. R. J. Reynolds Tobacco Co. Hardin v. R. J. Reynolds Tobacco Co. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
39. |
As of 31 December 2021, Engle Broin |
40. |
The following chart identifies the number of individual cases pending as of 31 December 2021 as against the number pending as of 31 December 2020, along with the number of Engle Broin |
U.S. |
U.S. |
Change in |
||||||||||
Case Numbers |
Case Numbers |
Number |
||||||||||
31 December |
31 December |
Increase/ |
||||||||||
Case Type |
2021 |
2020 |
(Decrease) |
|||||||||
Individual Smoking and Health Cases (note 14) |
||||||||||||
Engle |
( |
|||||||||||
Broin |
( |
|||||||||||
Filter Cases (note 17) |
( |
41. |
In November 1998, the major U.S. cigarette manufacturers, including RJRT, B&W and Lorillard Tobacco, entered into the Master Settlement Agreement (MSA) with attorneys general representing |
42. |
These State Settlement Agreements settled all health care cost recovery actions brought by, or on behalf of, the settling jurisdictions; released the defending major U.S. cigarette manufacturers from various additional present and potential future claims; imposed future payment obligations in perpetuity on RJRT, B&W, Lorillard Tobacco and other major U.S. cigarette manufacturers; and placed significant restrictions on their ability to market and sell cigarettes and smokeless tobacco products. In accordance with the MSA, various tobacco companies agreed to fund a US$ |
BAT Annual Report and Form 20-F 2021 |
43. |
RJRT and SFNTC are subject to the substantial payment obligations under the State Settlement Agreements. Payments under the State Settlement Agreements are subject to various adjustments for, among other things, the volume of cigarettes sold, relative market share, operating profit and inflation. Reynolds American’s operating subsidiaries’ expenses and payments under the State Settlement Agreements for 2018, 2019, 2020 and 2021 and the projected expenses and payments for 2022 and onwards are set forth below (in millions of U.S. dollars)*: |
2023 and |
||||||||||||||||||||||||
2018 |
2019 |
2020 |
2021 |
2022 |
thereafter |
|||||||||||||||||||
Settlement expenses |
$ |
$ |
$ |
$ |
||||||||||||||||||||
Settlement cash payments |
$ |
$ |
$ |
$ |
||||||||||||||||||||
Projected settlement expenses |
$> |
$> |
||||||||||||||||||||||
Projected settlement cash payments |
$> |
$> |
* |
Subject to adjustments for changes in sales volume, inflation, operating profit and other factors. Payments are allocated among the companies on the basis of relative market share or other methods. |
44. |
The State Settlement Agreements have materially adversely affected RJRT’s shipment volumes. Reynolds American believes that these settlement obligations may materially adversely affect the results of operations, cash flows or financial position of Reynolds American and RJRT in future periods. The degree of the adverse impact will depend, among other things, on the rate of decline in U.S. cigarette sales in the premium and value categories, RJRT’s share of the domestic premium and value cigarette categories, and the effect of any resulting cost advantage of manufacturers not subject to the State Settlement Agreements. |
45. |
In addition, the MSA includes an adjustment that potentially reduces the annual payment obligations of RJRT, Lorillard Tobacco and the other signatories to the MSA, known as ‘Participating Manufacturers’ (PMs). Certain requirements, collectively referred to as the ‘Adjustment Requirements’, must be satisfied before the Non-Participating Manufacturers (NPM) Adjustment for a given year is available: (i) an Independent Auditor must determine that the PMs have experienced a market share loss, beyond a triggering threshold, to those manufacturers that do not participate in the MSA (such non-participating manufacturers being referred to as NPMs); and (ii) in a binding arbitration proceeding, a firm of independent economic consultants must find that the disadvantages of the MSA were a significant factor contributing to the loss of market share. This finding is known as a significant factor determination. |
46. |
When the Adjustment Requirements are satisfied, the MSA provides that the NPM Adjustment applies to reduce the annual payment obligation of the PMs. However, an individual settling state may avoid its share of the NPM Adjustment if it had in place and diligently enforced during the entirety of the relevant year a ‘Qualifying Statute’ that imposes escrow obligations on NPMs that are comparable to what the NPMs would have owed if they had joined the MSA. In such event, the state’s share of the NPM Adjustment is reallocated to other settling states, if any, that did not have in place and diligently enforce a Qualifying Statute. |
47. |
RJRT and Lorillard Tobacco are or were involved in NPM Adjustment proceedings concerning the years 2003 to 2019. In 2012, RJRT, Lorillard Tobacco, and SFNTC entered into an agreement (the Term Sheet) with certain settling states that resolved accrued and potential NPM adjustments for the years 2003 through 2012 and, as a result, RJRT and SFNTC collectively received, or are to receive, more than US$ |
48. |
On 18 January 2017, the State of Florida filed a motion to join Imperial Tobacco Group, PLC (ITG) as a defendant and to enforce the Florida State Settlement Agreement, which motion sought payment under the Florida State Settlement Agreement of approximately US$ |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
49. |
After a bench trial, on 27 December 2017 the court entered an order holding that RJRT (not ITG) is liable for annual settlement payments for the Acquired Brands, finding that ITG did not assume liability for annual settlement payments under the terms of the asset purchase agreement relating to the Divestiture and RJRT remained liable for payments under the Florida State Settlement Agreement as to the Acquired Brands. In January 2018, the auditor of the Florida State Settlement Agreement adjusted the final 2017 invoice for the annual payment and amended the 2015 and 2016 invoices for the respective annual payment and the net operating profit penalty for each of those years under the Florida Settlement Agreement, based on the auditor’s interpretation of the court’s order. The adjusted invoices reflected amounts due to both the State of Florida and PM USA. In total, the estimated additional amounts due were US$ |
50. |
On |
51. |
On 26 March 2018, the State of Minnesota filed a motion against RJRT to enforce the Minnesota State Settlement Agreement, which motion sought payments under the Minnesota State Settlement Agreement of approximately US$ |
BAT Annual Report and Form 20-F 2021 |
The State of Minnesota also filed a separate complaint against ITG, which complaint sought the same payments. The State’s motion against RJRT and complaint against ITG sought, among other things, an order declaring that RJRT and ITG were in breach of the Minnesota State Settlement Agreement and were jointly and severally liable to make annual payments to the State of Minnesota under the Minnesota State Settlement Agreement with respect to the Acquired Brands. In addition, on 28 March 2018, PM USA filed a motion to enforce the Minnesota State Settlement Agreement, asserting, among other things, that RJRT and ITG breached the Minnesota State Settlement Agreement by failing to make settlement payments as to the Acquired Brands, which PM USA asserted had improperly shifted settlement payment obligations to PM USA. On 27 March 2018, the Minnesota court consolidated the motions to enforce and separate complaint against ITG into one proceeding captioned In re Petition of the State of Minnesota for an Order Compelling Payments of Settlement Proceeds Related to ITG Brands LLC, |
52. |
On 28 January 2019, the State of Texas filed motions in the original Texas health care reimbursement case, brought against the tobacco industry that led to the Texas State Settlement Agreement, to join ITG as a defendant and to enforce the Texas State Settlement Agreement against RJRT and ITG, seeking payment under the Texas State Settlement Agreement of approximately US$ |
PM USA filed a motion to enforce the Texas State Settlement Agreement, asserting among other things that RJRT and ITG breached that agreement by failing to make settlement payments as to the Acquired Brands, which PM USA asserts has improperly shifted settlement payment obligations to PM USA. After completion of discovery, a hearing on the motions to enforce was held on 30 October 2019. On 25 February 2020, the Court entered a Memorandum Opinion and Order holding that RJRT remains liable for settlement payments on the Acquired Brands under the Texas Settlement Agreement. The Court further held that, although ITG is unambiguously an assign within the meaning of the Texas Settlement Agreement, a final determination of the scope of ITG’s obligations under the asset purchase agreement is to be determined in the litigation pending before the Delaware Court. Pursuant to the Court’s direction, on 9 March 2020 the parties submitted a status report indicating the remaining issues before the Court include RJRT’s position that the Court should subtract the equity fee payments made on the Acquired Brands by ITG’s distributors from the settlement payments due by RJRT after including the Acquired Brands in calculating damages, whether a final judgment should be entered in favour of ITG, whether a partial final judgment should be entered against RJRT and the State’s request for an award of attorneys’ fees and costs against RJRT and/or ITG. On 5 May 2020 the Court entered final judgment (later clarified in a 14 August 2020 amended judgment) on the State’s motion, ordering RJRT to pay all settlement amounts due on the Acquired Brands under the Texas Settlement Agreement; granting RJRT a full dollar-for-dollar set-off for all equity fee payments made on the Acquired Brands by ITG or its distributors, but holding RJRT liable for any equity fee payments that are lawfully refunded; and ordering the case closed, to be reopened after ITG’s liability under the asset purchase agreement is determined by the Delaware Court. ITG’s equity fee payments to Texas for the Acquired Brands currently equal approximately |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
53. |
In June 2015, ITG joined the Mississippi Settlement Agreement. On 26 December 2018, PM USA filed a Motion to Enforce Settlement Agreement against RJRT and ITG alleging RJRT and ITG failed to act in good faith in calculating the base-year net operating profits for the Acquired Brands, claiming damages of approximately US$ |
54. |
In January 2021, RJRT reached an agreement with several MSA states to waive RJRT’s claims under the MSA in connection with a settlement between those MSA states and a non-participating manufacturer, S&M Brands, Inc. (S&M Brands), under which the states released certain claims against S&M Brands in exchange for receiving a portion of the funds S&M Brands had deposited into escrow accounts in those states pursuant to the states’ escrow statutes. In consideration for waiving claims, RJRT, together with SFNTC, received approximately $ |
55. |
As at 31 December 2021: |
a. |
medical reimbursement actions are being brought in Angola, Brazil, Canada, Nigeria and South Korea; |
b. |
class actions are being brought in Canada and Venezuela; and |
c. |
active tobacco product liability claims against the Group’s companies existed in |
56. |
In or about |
57. |
In 2007, the non-governmental organisation the Argentina Tort Law Association (ATLA) and Emma Mendoza Voguet brought a reimbursement action against Nobleza Piccardo S.A.I.C.y.F. (Nobleza) and Massalín Particulares. The case is being heard in the Contentious Administrative Court. The parties filed conclusive briefs on 20 May 2019. On 11 May 2021, the Court dismissed the case on the basis of plaintiffs’ lack of legal standing to bring the suit. Plaintiffs did not appeal within the applicable deadline and accordingly the judgment dismissing the case has become final. |
58. |
On 1 March 2019, the Quebec Court of Appeal handed down a judgment which largely upheld and endorsed the lower court’s previous decision in two Quebec class actions (the Quebec Class Actions), as further described below. The share of the judgment for Imperial, the Group’s operating company in Canada, is approximately CAD $ |
59. |
The below represents the state of the referenced litigation as at the advent of the Stays. |
60. |
Following the implementation of legislation enabling provincial governments to recover health-care costs directly from tobacco manufacturers, |
61. |
The |
BAT Annual Report and Form 20-F 2021 |
Canadian province |
Act pursuant to which Claim was brought |
Companies named as Defendants |
Current stage | |||
British Columbia |
||||||
New Brunswick |
||||||
Ontario |
||||||
Newfoundland and Labrador |
||||||
Saskatchewan |
||||||
Manitoba |
||||||
Alberta |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Canadian province |
Act pursuant to which Claim was brought |
Companies named as Defendants |
Current stage | |||
Quebec |
||||||
Prince Edward Island |
||||||
Nova Scotia |
62. |
British American Tobacco (Nigeria) Limited (BAT Nigeria), the Company and Investments have been named as defendants in a medical reimbursement action by the federal government of Nigeria, filed on |
63. |
The suits claim that the state and federal government plaintiffs incurred costs related to the treatment of smoking-related illnesses resulting from allegedly tortious conduct by the defendants in the manufacture, marketing, and sale of tobacco products in Nigeria, and assert that the plaintiffs are entitled to reimbursement for such costs. The plaintiffs assert causes of action for negligence, negligent design, fraud and deceit, fraudulent concealment, breach of express and implied warranty, public nuisance, conspiracy, strict liability, indemnity, restitution, unjust enrichment, voluntary assumption of a special undertaking, and performance of another’s duty to the public. |
64. |
The Company and Investments have made a number of challenges to the jurisdiction of the Nigerian courts. Such challenges are still pending (on appeal) against the federal government and the states of Lagos, Kano, Gombe and Ogun. The underlying cases are stayed or adjourned pending the final outcome of these jurisdictional challenges. In the state of Oyo, on 13 |
65. |
In April 2014, Korea’s National Health Insurance Service (NHIS) filed a healthcare recoupment action against KT&G (a Korean tobacco company), PM Korea and BAT Korea (including BAT Korea Manufacturing). The NHIS is seeking damages of roughly |
BAT Annual Report and Form 20-F 2021 |
66. |
On 21 May 2019, the Federal Attorney’s Office (AGU) in Brazil filed an action in the Federal Court of Rio Grande do Sul against the Company, the BAT Group’s Brazilian subsidiary Souza Cruz LTDA (Souza Cruz), Philip Morris International, Philip Morris Brazil Indústria e Comércio LTDA and Philip Morris Brasil S/A, asserting claims for medical reimbursement for funds allegedly expended by the federal government as public health care expenses to treat |
67. |
On 19 July 2019, the trial court ordered that service of the action on the Company be effected via service on Souza Cruz. On 6 August 2019, Souza Cruz refused to receive service on behalf of the Company due to Souza Cruz’s lack of power to receive the summons on behalf of the Company and such refusal was attached to the case files on 9 August 2019. On 7 August 2019, Souza Cruz was served with the complaint by the AGU and Souza Cruz’s acknowledgement of service was attached to the case files on 12 August 2019. |
68. |
On 19 August 2019, Souza Cruz filed an interlocutory appeal challenging the 19 July 2019 trial court order permitting the AGU to effect service on the Company by serving Souza Cruz and requesting a stay of the proceedings until the appeal is decided. Souza Cruz also appealed the fact that several documents attached to the AGU’s complaint are in English, without proper translation, and it also appealed the very short term of 30 days for the defendants to prepare their defences. |
69. |
On 20 August 2019, Souza Cruz informed |
Souza Cruz and the Company submitted on 6 August 2020 requests for clarification of this appellate decision. The court granted the Company’s request to intervene, and rejected Souza Cruz and the Company’s request for clarification of the appellate decision, which decision became final on 6 June 2021. Souza Cruz and the Company filed their respective defences on 12 May 2020. On 19 May 2020, a notice was sent to the Public Prosecutor’s Office (MPF) regarding the AGU’s request that the MPF join the action as a plaintiff. The MPF, in its response filed 10 July 2020, rejected the AGU’s request, and declined to join the action as party, but will act as an ‘inspector of the law’, which enables MPF to express its opinion on matters in the case. The court to date has not opened up the term for the AGU to reply to the defences presented. On 19 February 2021, the Associação de Controle do Tabagismo, Promoção da Saúde (ACT) filed a petition seeking to intervene in the case as amicus curiae amicus curiae amicus curiae amicus curiae |
70. |
As noted above, on 1 March 2019 the Quebec Court of Appeal handed down a judgment which largely upheld and endorsed the lower court’s previous decision in two Quebec Class Actions, as further described below. Imperial’s share of the judgment is approximately CAD $ |
71. |
The below represents the state of the referenced litigation as at the advent of the Stays. |
72. |
There are |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
73. |
Knight Class Action: |
74. |
On appeal, the appellate court confirmed the certification of the class, but limited any financial liability, if proven, to 1997 onward. Imperial’s third-party claim against the federal government was dismissed by the Supreme Court of Canada. The federal government is seeking a cost order of CAD$ |
75. |
Growers’ Class Action: |
76. |
Quebec Class Actions: |
The group also includes the heirs of members who meet the criteria described above. Pursuant to the judgment, the plaintiffs were awarded damages and interest against Imperial and the Canadian subsidiaries of Philip Morris International and JTI in the amount of CAD$ |
77. |
Other Canadian Smoking and Health Class Actions: |
BAT Annual Report and Form 20-F 2021 |
78. |
In June 2009, |
79. |
In June 2010, |
80. |
In June 2012, a smoking and health class action was filed in Ontario (Jacklin) against various Canadian and non-Canadian tobacco-related entities, including the UK Companies, Imperial and the RJR Companies. The claim has been in abeyance. |
81. |
In April 2008, the Venezuelan Federation of Associations of Users and Consumers (FEVACU) and Wolfang Cardozo Espinel and Giorgio Di Muro Di Nunno, acting as individuals, filed a class action against the Venezuelan government. The class action seeks regulatory controls on tobacco and recovery of medical expenses for future expenses of treating smoking-related illnesses in Venezuela. Both C.A Cigarrera Bigott Sucs. (Cigarrera Bigott), a Group subsidiary, and ASUELECTRIC, represented by its president Giorgio Di Muro Di Nunno (who had previously filed as an individual), have been admitted as third parties by the Constitutional Chamber of the Supreme Court of Justice. A hearing date for the action is yet to be scheduled. On 25 April 2017 and on 23 January 2018, Cigarrera Bigott requested the court to declare the lapsing of the class action due to no proceedings taking place in the case in over a year. A ruling on the matter is yet to be issued. |
82. |
As at 31 December 2021, the jurisdictions with the most active individual cases against Group companies were, in descending order: Brazil ( Baldassare |
83. |
On 22 July 2020, Nicholas Bernston filed a personal injury action in the Northern District of Oklahoma against JUUL Labs Inc. (JUUL), Altria Client Services, LLC, RJR Vapor, Reynolds American, and others. The complaint seeks damages for personal injuries (including pneumonia and acute respiratory failure) allegedly resulting from vaping on several theories, including strict liability, negligence, and breach of implied warranty of merchantability. On 24 July 2020, JUUL notified the JPML that this case could be a potential tag-along in the JUUL MDL. On 5 August 2020, the Judicial Panel on Multidistrict Litigation entered a conditional transfer order transferring the case to the Northern District of California. That order became effective on 12 August 2020, and this case now is a member case in the JUUL multidistrict litigation (MDL). On 13 October 2020, RJR Vapor and Reynolds American moved to dismiss the complaint or, in the alternative, for a stay or a suggestion of remand to the Northern District of Oklahoma. On 16 October 2020, the MDL court issued an order staying those motions to dismiss. The case will remain pending against Reynolds American and RJR Vapor, but they will not be subject to discovery or other pretrial obligations absent further order from the court. |
84. |
BAT Hrvatska d.o.o u likvidaciji and British American Tobacco Investments (Central and Eastern Europe) Limited are named as defendants in a claim by Mr Perica received on 22 August 2017 and brought before the commercial court of Zagreb, Croatia. Mr Perica seeks damages of HRK |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
85. |
Following the Company’s acquisition of the remaining |
86. |
Certain Group companies are party to a number of patent litigation cases and procedural challenges concerning the validity of patents owned by or licensed to them and/or the alleged infringement of third-parties’ patents. |
87. |
On 22 June 2018, an affiliate of Philip Morris International (PMI) commenced proceedings against British American Tobacco Japan, Ltd. (BAT Japan) in the Japanese courts challenging the import, export, sale and offer of sale of the glo device and of the NeoStiks consumable in Japan at the time the claim was brought (and earlier models of the glo device), alleging that the glo devices directly infringe certain claims of two Japanese patents that have been issued to the PMI affiliate and that the NeoStiks indirectly infringe certain claims of those patents. On 17 January 2019, the PMI affiliate introduced new grounds of infringement, alleging that the glo device also infringes some other claims in the two PMI affiliate’s Japanese patents. Damages for the glo device and NeoStik are claimed in the court filing, to the amount of |
88. |
Fuma International LLC (Fuma) filed two separate patent infringement complaints in the U.S. District Court for the Middle District of North Carolina against RJR Vapor on 6 March 2019 and 2 July 2019, each alleging that Vuse Solo and Vuse Ciro products infringe a patent. The two complaints were consolidated into a single proceeding involving both asserted Fuma patents. The parties resolved this matter pursuant to a Confidential Settlement and License Agreement effective 29 November 2021. |
89. |
On 9 April 2020, Nicoventures Trading Limited (Nicoventures) commenced an action in the England and Wales High Court (Patents Court) against Philip Morris Products S.A. (PMP) for revocation against three divisional patents in the same family, of which PMP is the proprietor (a further divisional patent in the same family was added into the revocation action on 9 July 2020). On 12 May 2020 PMP filed its defence |
together with a counterclaim for patent infringement against Nicoventures and Investments concerning prototype examples or production samples of certain ‘glo’ tobacco heating devices. PMP are seeking an injunction, an order for delivery up or a destruction upon oath of all infringing articles, and either an account of profits or damages on commercial sales (and interest thereon). On 12 June 2020, Nicoventures and Investments filed their defence to the counterclaim. The trial of this action took place between 18-25 May 2021. On 14 July 2021 the England and Wales High Court (Patents Court) handed down its judgment finding that all four divisional patents were invalid for lack of an inventive step and consequently, that PMP’s counterclaim failed. On 2 November 2021, PMP filed a request for permission to appeal. |
90. |
On 28 May 2020 Altria Client Services LLC and U.S. Smokeless Tobacco Company LLC commenced proceedings against RJR Vapor before the U.S. District Court for the Middle District of North Carolina against the vapour products Vuse Vibe and Vuse Alto, and the tin used in the modern oral product Velo. Nine patents in total were asserted: two against Vibe, four against Alto and three against Velo. On 5 January 2021, Altria filed an Amended Complaint adding Modoral Brands Inc. as a defendant with respect to the Velo product claims. The plaintiffs have sought damages but have not to date sought preliminary or permanent injunctions. RJR Vapor has responded to the complaint. The parties conducted a one-day mediation session in August 2021, but were unable to resolve the dispute. A claim construction hearing was held on 28 April 2021, and the court issued its claim construction ruling on 12 May 2021. Fact discovery, expert discovery, and summary judgment briefings are completed. No date has been set for a summary judgment hearing, and no trial date has been set. |
91. |
On 9 April 2020, RAI Strategic Holdings, Inc. and RJR Vapor commenced an action in the U.S. District Court for the Eastern District of Virginia against Altria Client Services LLC, Philip Morris USA, Inc., Altria Group, Inc., Philip Morris International, Inc., and Philip Morris Products S.A. (collectively, Philip Morris) for infringement of six patents based on the importation and commercialization within the United States of IQOS. On 8 May 2020 and 12 June 2020, Philip Morris filed Inter Partes Review (IPR) petitions in the U.S. Patent Office challenging the validity of each of the six patents asserted. On 29 June 2020, Philip Morris asserted counterclaims alleging that RJR Vapor infringes five patents. On 24 November 2020, the court issued a claim construction order that determined that each disputed term would have its plain and ordinary meaning. On 4 December 2020, the magistrate judge issued an order staying RJR Vapor and Philip Morris’s patent claims pending a decision by the U.S. Patent Office regarding whether to proceed with the IPRs. At the time of the stay, fact and expert discovery was ongoing and was scheduled to conclude 26 January 2021. The court lifted the stay, and the parties have substantially completed discovery. On 6 August 2021, the court denied all summary judgment motions. Trial on the Altria and Philip Morris patents was scheduled to have begun on 4 April 2022, but the court postponed the trial and set a new trial date of 6 June 2022; the RJR Vapor offensive patent case remains stayed pending (i) an appeal by Philip Morris to the Federal Circuit in relation an exclusion order granted against Philip Morris by the International Trade Commission based on the relevant patents, and (ii) the decisions in IPRs commenced by Philip Morris against the relevant patents at the U.S. Patent Office. |
BAT Annual Report and Form 20-F 2021 |
92. |
On 27 November 2020 Philip Morris filed a complaint before the Regional Court Mannheim in Germany against British American Tobacco (Germany) GmbH (BAT Germany) alleging that the sale, offer for sale and importation of Vype ePod products infringes a patent. Philip Morris is seeking an injunction, a recall of product from commercial customers and a declaratory judgment for damages. The trials of this action took place on 15 June 2021 and 9 November 2021. A decision on the matter was promulgated on 30 November 2021. The decision dismissed the complaint in its entirety. On 28 December 2021, Philip Morris lodged an appeal against this decision before the Higher Regional Court Karlsruhe. |
93. |
On 11 December 2020 Philip Morris filed a complaint before the Regional Court Dusseldorf in Germany against BAT Germany alleging that the sale, offer for sale and importation of the glo TABAK HEATER and neo STICK products infringe a patent. Philip Morris is seeking an injunction, a recall of product from commercial customers and a declaratory judgment for damages. The trial of this action took place on 30 November 2021. The court promulgated its decision on 21 December 2021 and decided that the above-mentioned products infringe the patent. The decision is not final and was appealed by BAT Germany on 21 December 2021 to the Higher Regional Court Dusseldorf. On 31 December 2021, BAT Germany also lodged a formal request with the appeal court to suspend the injunction order against the neo STICK products. On 24 January 2022, the appeal court granted this request, subject to providing a security and indicating that the neo STICK products are only suitable for new glo TABAK HEATER devices. BAT Germany is no longer marketing the glo TABAK HEATER, but rather a new glo TABAK HEATER marketed as glo Hyper + New Heating Technology, which is not subject to the patent infringement proceedings. Because the trial court decision only contains a declaratory obligation for BAT Germany to pay damages, Philip Morris would have to file a new separate action for the actual payment of damages, stating the precise amount that is being claimed. |
94. |
On 14 December 2020, Modoral Brands Inc. (Modoral) filed a complaint in the U.S. District Court for the District of Delaware against Pinkerton Tobacco Co., LP, Swedish Match North America LLC, and NYZ AB (collectively Swedish Match) seeking a declaratory judgment that the importation, manufacture, use, and/or sale of Modoral’s Velo product does not infringe U.S. Patent No. 9,161,908 (the ‘908 Patent) or any of Swedish Match’s trade secrets. On 3 June 2021, the case was transferred to the U.S. District Court for the Central District of California. On 13 July 2021, Swedish Match and Helix Innovations GmbH filed counterclaims against Modoral for infringement of the ’908 patent and misappropriation of trade secrets arising out of the manufacture, use, and sale of Modoral’s Velo product. On 15 December 2021, the court entered a Markman Order finding that the ’908 patent distinguishes a nicotine complex from the claimed ‘nicotine salt,’ and more specifically, affirmatively excluding the nicotine polacrilex complex used in the accused Velo product from the claimed invention because it is “not a nicotine salt”. Swedish Match agreed to a joint stipulation and request for entry of judgment of non-infringement for all of the asserted claims of the ’908 patent, which the Court granted on 19 January 2022. Modoral filed a motion to stay Swedish Match’s remaining trade secret misappropriation claims in light of Swedish Match’s intent to appeal the Markman Order to the Federal Circuit. Modoral also filed a Rule 54(b) motion for partial final judgment of the infringement claims. Both motions are scheduled for argument on 4 March 2022. |
95. |
On 19 April 2017, Sociedade Agrícola de Tabacos, Limitada (SAT) (a BAT Group company in Mozambique) filed a complaint to the National Inspectorate for Economic Activities (INAE), the government body under the Ministry of Industry and Trade, regarding alleged infringements of its registered trademark (GT) by GS Tobacco SA (GST). INAE subsequently seized the allegedly infringing products (GS cigarettes) and fined and ordered GST to discontinue manufacturing products that could infringe SAT’s intellectual property rights. Following INAE’s decision, in July 2017 and March 2018, SAT sought damages via the Judicial Court of Nampula, from GST in the amount of and equivalent to £ |
96. |
In December 2020, the Company and British American Tobacco (GLP) Limited (GLP) were named as defendants in a claim made in the English High Court by around |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
97. |
On 12 November 2020, British American Tobacco Middle East W.L.L (formerly British American Tobacco Middle East SPC) (BAT ME), along with its distributor in Qatar, Ali Bin Ali Establishment (ABA), filed a case before the Qatar Court of First Instance which challenges a decision of Qatar General Authority of Customs dated 16 August 2020 ordering ABA to pay two amounts arising from unrelated circumstances, one of which totalled QAR |
98. |
On 25 January 2021, Walid Ahmed Mohammed Al Naghi for Trading Establishment (Al Naghi), a former distributor for the Group’s operating companies in the Middle East, filed a claim in the Commercial Court in Jeddah, Saudi Arabia, seeking SAR |
At that hearing, the Court of First Instance set a timetable for the parties to file written submissions setting out their arguments with regard to the legal status of the BAT entities in Bahrain and UAE. A further hearing was held on 2 February 2022. The court is seeking further information from the BAT entities in Bahrain and UAE ahead of a further hearing on 23 February 2022. |
99. |
On 15 January 2021, plaintiffs in an individual asbestos personal injury action (Rentko), originally filed 5 October 2020 in the New York City Asbestos Litigation court, filed an amended complaint, which named as defendants the Company, BATUS Holdings, Inc., British American Tobacco (Brands) Inc., and RJRT, along with various other defendants. The amended complaint was served 20 January 2021 on BATUS Holdings, Inc. and British American Tobacco (Brands) Inc., and served 22 January 2021 on RJRT. The amended complaint alleges that one of the plaintiffs was exposed to the defendants’ asbestos and asbestos-contaminated talcum powder products, which allegedly caused her to develop mesothelioma, and asserts claims under state law, including for negligence, breach of warranty, product liability, negligent misrepresentation, fraudulent concealment, and civil conspiracy. A further amended complaint was filed on 27 January 2021, which named Reynolds American as a defendant as an alleged successor in interest to the Company, and which was served on Reynolds American on 5 February 2021. Plaintiffs seek unspecified compensatory and punitive damages jointly and severally against the defendants. Reynolds American and RJRT moved to dismiss the amended complaint on 26 March 2021. A notice of discontinuance was filed on 31 March 2021 discontinuing the litigation without prejudice as against the Company, BATUS Holdings, Inc. and British American Tobacco (Brands) Inc. A stipulation of discontinuance was filed on 6 April 2021 discontinuing the litigation without prejudice as against Reynolds American and RJRT. |
100. |
On 23 April 2021, plaintiff in an asbestos personal injury action (Smoltino), originally filed 25 August 2020 in the New York City Asbestos Litigation court, filed an amended complaint, which named as defendants the Company, BATUS Holdings, Inc., British American Tobacco (Brands) Inc., Reynolds American and RJRT, along with various other defendants. The amended complaint was served on BATUS Holdings, Inc., British American Tobacco (Brands) Inc. and RJRT on 23 April 2021 and served on Reynolds American on 26 April 2021. The amended complaint alleged that plaintiff’s decedent was exposed to the defendants’ asbestos and asbestos-contaminated talcum powder products, which allegedly caused her to develop mesothelioma, and asserted claims under state law, including for negligence, breach of warranty, product liability, negligent misrepresentation, fraudulent concealment, wrongful death and civil conspiracy. Plaintiff seeks unspecified compensatory and punitive damages jointly and severally against the defendants. A notice of discontinuance was filed on 19 May 2021 discontinuing the litigation without prejudice as against the Company, BATUS Holdings, Inc. and British American Tobacco (Brands) Inc. Reynolds American and RJRT moved to dismiss the amended complaint on 10 May 2021. A stipulation of discontinuance was filed on 24 May 2021 discontinuing the litigation without prejudice as against Reynolds American and RJRT. |
BAT Annual Report and Form 20-F 2021 |
101. |
On 11 May 2021, plaintiff in an asbestos personal injury action (Gilbride) filed a complaint in the Superior Court of New Jersey Law Division – Middlesex County, which named as defendants R. J. Reynolds Tobacco Company, individually and as successor-by-merger to British American Cosmetics, along with various other defendants. The complaint was served on RJRT on 26 May 2021. The complaint alleged that plaintiff was exposed to asbestos-containing cosmetic talcum powder products sold and supplied by the Defendants (and/or their predecessors in interest), which allegedly caused her to develop mesothelioma, and asserted claims under state law, including for negligence, breach of warranty, strict liability in tort, marketing an ultra-hazardous product, failure to warn, product liability, negligent misrepresentation, fraudulent concealment, and civil conspiracy. Plaintiff seeks unspecified compensatory and punitive damages jointly and severally against the defendants. A stipulation for voluntary dismissal was filed with the court on 7 July 2021. |
102. |
In Wisconsin, the authorities have identified potentially responsible parties (PRPs) to fund the clean-up of river sediments in the lower Fox River. The pollution was caused by discharges of Polychlorinated Biphenyls (PCBs) from paper mills and other facilities operating close to the river. Among the PRPs is NCR Corporation (NCR). |
103. |
In NCR’s Form 10-K Annual Report for the year ended 31 December 2014, the total clean-up costs for the Fox River were estimated at US$ |
104. |
Industries’ involvement with the environmental liabilities arises out of indemnity arrangements which it became party to due to a series of transactions that took place from the late-1970s onwards and subsequent litigation brought by NCR against Industries and Appvion Inc. (Appvion) (a former Group subsidiary) in relation to those arrangements which was ultimately settled. U.S. authorities have never identified Industries as a PRP. |
105. |
There has been a substantial amount of litigation in the United States involving NCR and Appvion regarding the responsibility for the costs of the clean-up operations. The U.S. Government also brought enforcement proceedings against NCR and Appvion to ensure compliance with regulatory orders made in relation to the Fox River clean-up. This litigation has been settled through agreements with other PRPs and a form of settlement known as a Consent Decree with the U.S. Government, approved by the District Court of Wisconsin on 23 August 2017. |
106. |
The principal terms of that Consent Decree, in summary, are as follows: |
a. |
NCR is obliged to perform and fund all of the remaining Fox River remediation work by itself. |
b. |
The U.S. Government enforcement proceedings were settled, with NCR having no liability to meet the U.S. Government’s claim for costs it had incurred in relation to the clean-up to date, a secondary responsibility to meet certain future costs, and no liability to the U.S. Government for NRDs. |
c. |
NCR ceased to pursue its contribution claims against the other PRPs and in return received contribution protection preventing other PRPs from pursuing their contribution claims against NCR and existing claims for contribution being dismissed by order of the Court. NCR does, however, have the right to reinstate its contribution claims if the other PRPs decide to continue to pursue certain contractual claims against NCR. |
d. |
Appvion also agreed to cease pursuance of claims against the other PRPs, subject to retention of the right to reinstate its claims if the other PRPs decide to continue to pursue certain claims against Appvion. |
107. |
A Consent Decree between the U.S. Government, P.H. Glatfelter and Georgia Pacific settling the allocation of costs on the Fox River was approved by the District Court in the Eastern District of Wisconsin on 14 March 2019. This Consent Decree concludes all existing litigation on the Fox River, following P.H. Glatfelter’s withdrawal of its appeal against the issuance of the Consent Decree as a term of the settlement. |
108. |
In NCR’s Form 10-K Annual Report for the year ended 31 December 2020 NCR disclosed that, in November 2019, an arbitral tribunal had awarded approximately US$ |
109. |
NCR has taken the position that, under the terms of a 1998 Settlement Agreement between it, Appvion and Industries, and a 2005 arbitration award, Industries and Appvion generally had a joint and several obligation to bear |
110. |
Until May 2012, Appvion and Windward Prospects Limited (Windward) (another former Group subsidiary) had paid a |
111. |
Industries commenced proceedings against Windward and Appvion in December 2011 seeking indemnification in respect of any liability it might have to NCR (the English Indemnity Proceedings) pursuant to a 1990 de-merger agreement between those parties. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
112. |
On 30 September 2014, Industries entered into a Funding Agreement with Windward, Appvion, NCR and BTI 2014 LLC (BTI) (a wholly owned subsidiary of Industries). Pursuant to the Funding Agreement, the English Indemnity Proceedings and a counterclaim Appvion had brought in those proceedings, as well as an NCR-Appvion arbitration concerning Appvion’s indemnity to NCR, were discontinued as part of an overall agreement between the parties providing a framework through which they would together fund the ongoing costs of the Fox River clean-up. Under the agreement, NCR has agreed to accept funding by Industries at the lower level of |
113. |
The parties also agreed to cooperate in order to maximise recoveries from certain claims made against third parties, including (i) a claim commenced by Windward in the High Court of England & Wales (the High Court) against Sequana and the former Windward directors (the Windward Dividend Claim). That claim was assigned to BTI under the Funding Agreement, and relates to dividend payments made by Windward to Sequana of around € € |
114. |
The Windward Dividend Claim and BAT section 423 Claim were heard together in the High Court, with judgment handed down on 11 July 2016. The court upheld the BAT section 423 Claim and, by way of a consequentials judgment dated 10 February 2017, ordered that Sequana pay to BTI an amount up to the full value of the 2009 Dividend plus interest, which equates to around US$ |
115. |
The parties pursued cross appeals on the judgment, during which time Sequana was granted a stay in respect of the above payments. That stay was lifted in May 2017, three months after Sequana had entered into an insolvency process in France seeking court protection (the Sauvegarde). On 15 May 2019, the Nanterre Commercial Court made an order placing Sequana into formal liquidation proceedings ( liquidation judiciaire |
116. |
On 6 February 2019 the Court of Appeal gave judgment upholding the High Court’s findings, with one immaterial change to the method of calculating the damages awarded. Sequana therefore remains liable to pay approximately US$ |
117. |
All parties to the appeal sought permission from the Court of Appeal for a further appeal to the UK Supreme Court. On 31 July 2019, BTI was granted permission to appeal to the Supreme Court. On the same day, the Supreme Court refused Sequana permission to appeal. The hearing of BTI’s appeal took place before the UK Supreme Court on 4 and 5 May 2021 and the judgment is awaited. |
118. |
BTI has brought claims against certain of Windward’s former advisers, including Windward’s auditors at the time of the dividend payments, PricewaterhouseCoopers LLP (PwC) (which claims were also assigned to BTI under the Funding Agreement). The claim had been stayed pending the outcome of the Sequana Proceedings. Once that stay was lifted, PwC applied to strike-out BTI’s claim. A hearing of this application took place in October 2019. On 15 November 2019, the court dismissed PwC’s application. The court granted PwC permission to appeal in respect of part of its dismissal of the application and the hearing of that appeal was heard by the Court of Appeal on 27 and 28 October 2020. On 11 January 2021, the Court of Appeal handed down judgment dismissing PwC’s appeal. The Court of Appeal also refused PwC’s application for permission to appeal to the Supreme Court and made an order requiring PwC to file its Defence within two months of 11 January 2021. This deadline was subsequently extended. PwC subsequently applied directly to the Supreme Court for permission to appeal the Court of Appeal’s decision. PwC’s application for permission to appeal to the Supreme Court has yet to be determined. In the meantime, BTI’s claim against PwC is progressing in the High Court. PwC served its Defence on 22 April 2021 and filed it with the Court on 26 April 2021. A Case Management Conference has been listed in a window between 2 March 2022 and 4 March 2022 (inclusive). |
119. |
An agreed stay is in place in respect of BTI’s separate assigned claim against Freshfields Bruckhaus Deringer. |
120. |
The sums Industries has paid under the Funding Agreement are subject to the reservation as set out in paragraph 112 above and ongoing adjustment. Clean-up costs can only be estimated in advance of the work being carried out and certain sums payable are the subject of ongoing U.S. litigation. In 2019, Industries paid £ |
BAT Annual Report and Form 20-F 2021 |
121. |
NCR is also being pursued by Georgia-Pacific, a designated PRP in respect of the Kalamazoo River in Michigan, in relation to remediation costs caused by PCBs released into that river. |
122. |
On 26 September 2013, the Michigan Court held that NCR was liable as a PRP on the basis that it had arranged for the disposal of hazardous material for the purposes of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). |
123. |
The second phase of the Kalamazoo trial to determine the apportionment of liability amongst PRPs took place between September and December 2015. On 29 March 2018, Judge Jonker ordered that NCR pay |
124. |
The parties commenced appeal proceedings against the judgment in July 2018. NCR also agreed an appeal bond with Georgia-Pacific to prevent enforcement of the judgment while it remained subject to appeal. |
125. |
On 11 December 2019, NCR announced that it had entered into a Consent Decree with the U.S. Government and the State of Michigan, pursuant to which it assumed liability for certain remediation work at the Kalamazoo River. This Consent Decree was approved by the District Court for the Western District of Michigan on 2 December 2020. The payments to be made on the face of the Consent Decree in respect of such work total approximately US$ |
126. |
The quantum of the clean-up costs for the Kalamazoo River is presently unclear. It may well exceed the amounts which are payable on the face of the Consent Decree. |
127. |
It is anticipated that NCR will look to Industries to pay |
128. |
Industries also anticipates that NCR may seek to recover from Appvion (subject to a cap of US$ |
129. |
As detailed above, Industries is taking active steps to protect its interests, including seeking to procure the repayment of the Windward dividends, pursuing the other valuable claims that are now within its control, and working with the other parties to the Funding Agreement to maximise recoveries from third parties with a view to ensuring that amounts funded towards clean-up related costs are later recouped under the agreed repayment mechanisms under the Funding Agreement. |
130. |
Reynolds American and its subsidiaries are subject to federal, state and local environmental laws and regulations concerning the discharge, storage, handling and disposal of hazardous or toxic substances. Such laws and regulations provide for significant fines, penalties and liabilities, sometimes without regard to whether the owner or operator of the property or facility knew of, or was responsible for, the release or presence of hazardous or toxic substances. In addition, third parties may make claims against owners or operators of properties for personal injuries and property damage associated with releases of hazardous or toxic substances. In the past, RJRT has been named a PRP with third parties under CERCLA with respect to several superfund sites. Reynolds American and its subsidiaries are not aware of any current environmental matters that are expected to have a material adverse effect on the business, results of operations or financial position of Reynolds American or its subsidiaries. |
131. |
From time to time, the Group investigates, and becomes aware of governmental authorities’ investigations into, allegations of misconduct against Group companies. The Group cooperates with the authorities’ investigations, where appropriate, including with the DOJ and OFAC in the United States, which are conducting an investigation into suspicions of breach of sanctions. |
132. |
Potential fines, penalties or other consequences cannot currently be assessed. As the investigations are ongoing, it is not possible to identify the timescale in which these matters might be resolved. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
133. |
The following matters on which the Company reported in the contingent liabilities and financial commitments note 27 to the Company’s 2020 financial statements have been dismissed, concluded or resolved as noted below: |
Matter |
Jurisdiction |
Companies named as Defendants |
Description |
Disposition | ||||
134. |
While it is impossible to be certain of the outcome of any particular case or of the amount of any possible adverse verdict, the Group believes that the defences of the Group’s companies to all these various claims are meritorious on both the law and the facts, and a vigorous defence is being made everywhere. |
135. |
As indicated above, on 1 March 2019 the Quebec Court of Appeal released its appeal judgment. The trial judgment was largely upheld by a unanimous decision of the |
136. |
Having regard to all these matters, with the exception of the Quebec Class Actions, Fox River and certain Engle |
137. |
JTI Indemnities. |
138. |
RJRT has received claims for indemnification from JTI, and several of these have been resolved. Although RJR and RJRT recognise that, under certain circumstances, they may have other unresolved indemnification obligations to JTI under the 1999 Purchase Agreement, RJR and RJRT disagree what circumstances described in such claims give rise to any indemnification obligations by RJR and RJRT and the nature and extent of any such obligation. RJR and RJRT have conveyed their position to JTI, and the parties have agreed to resolve their differences at a later date. |
BAT Annual Report and Form 20-F 2021 |
139. |
ITG Indemnity. |
140. |
Loews Indemnity. |
141. |
SFRTI Indemnity. |
before (a) 13 January 2019, to the extent relating to alleged personal injuries, and (b) in all other cases, 13 January 2021; (ii) brought by (a) a governmental authority to enforce legislation implementing European Union Directive 2001/37/EC or European Directive 2014/40/EU or (b) consumers or a consumer association; and (iii) arising out of any statement or claim (a) made on or before 13 January 2016, (b) by any company sold to JTI Holding in the transaction, (c) concerning Natural American Spirit brand products consumed or intended to be consumed outside of the United States and (d) that the Natural American Spirit brand product is natural, organic, or additive-free. Under the terms of this indemnity, JTI has requested indemnification from Santa Fe Natural Tobacco Company Germany GmbH (SFNTCG) in connection with an audit of SFNTCG relating to transfer pricing for the tax years 2007 to 2010 and 2012 to 2015. SFNTCG contests the audit results. The amount in dispute is approximately € |
142. |
Indemnification of Distributors and Retailers. RJRT, Lorillard Tobacco, SFNTC, American Snuff Co. and RJR Vapor have entered into agreements to indemnify certain distributors and retailers from liability and related defence costs arising out of the sale or distribution of their products. Additionally, SFNTC has entered into an agreement to indemnify a supplier from liability and related defence costs arising out of the sale or use of SFNTC’s products. The cost has been, and is expected to be, insignificant. RJRT, SFNTC, American Snuff Co. and RJR Vapor believe that the indemnified claims are substantially similar in nature and extent to the claims that they are already exposed to by virtue of their having manufactured those products. |
143. |
Except as otherwise noted above, Reynolds American is not able to estimate the maximum potential of future payments, if any, related to these indemnification obligations. |
144. |
Competition Investigations. There are instances where Group companies are cooperating with relevant national competition authorities in relation to ongoing competition law investigations and/or engaged in legal proceedings at the appellate level, including (amongst others) in the Netherlands. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
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Service contracts |
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Within one year |
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Between one and five years |
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Beyond five years |
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BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Summarised financial information |
2021 £m |
2020 £m |
2019 £m |
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Revenue |
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Profit for the year |
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– Attributable to non-controlling interests |
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Total comprehensive income |
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– Attributable to non-controlling interests |
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Dividends paid to non-controlling interests |
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Summary net assets: |
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Net cash generated from operating activities |
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Net cash used in investing activities |
( |
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( |
) |
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) | ||||||
Net cash used in financing activities |
( |
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( |
) |
( |
) | ||||||
Differences on exchange |
– |
( |
) |
( |
) | |||||||
(Decrease)/increase in net cash and cash equivalents |
( |
) |
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Net cash and cash equivalents at 1 January |
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Net cash and cash equivalents at 31 December |
Summarised financial information |
2021 £m |
2020 £m |
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Non-current assets |
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Current assets |
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Non-current liabilities |
( |
) |
( |
) | ||||
Current liabilities |
( |
) |
( |
) | ||||
BAT Annual Report and Form 20-F 2021 |
2021 £m |
2020 £m |
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Cash and cash equivalents * |
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Inventory |
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Investments held at fair value |
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Other |
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* |
Cash and cash equivalents above include £ |
– |
US$ |
– |
US$ |
– |
US$ |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
a. |
British American Tobacco p.l.c. (as the parent guarantor), referred to as ‘BAT p.l.c.’ in the financials below; |
b. |
B.A.T Capital Corporation (as an issuer or a subsidiary guarantor, as the case may be), referred to as ‘BATCAP’ in the financials below; |
c. |
B.A.T. International Finance p.l.c. (as an issuer or a subsidiary guarantor, as the case may be), referred to as ‘BATIF’ in the financials below; |
d. |
B.A.T. Netherlands Finance B.V. (as a subsidiary guarantor), referred to as ‘BATNF’ in the financials below; |
e. |
Reynolds American Inc. (as a subsidiary guarantor), referred to as ‘RAI’ in the financials below; and |
f. |
British American Tobacco Holdings (The Netherlands) B.V. (as a subsidiary guarantor of the 2017 Bonds only), referred to as ‘BATHTN’ in the financials below. |
Summarised Financial Information |
||||||||||||||||||||||||
Year ended 31 December 2021 |
BAT p.l.c. £m |
BATCAP £m |
BATIF £m |
BATNF £m |
RAI £m |
BATHTN £m |
||||||||||||||||||
Income Statement |
||||||||||||||||||||||||
Revenue |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
(Loss)/profit from operations |
( |
) |
( |
) |
( |
) |
– |
– |
||||||||||||||||
Dividend income |
– |
– |
– |
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Net finance income/(costs) |
( |
) |
( |
) |
– |
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Profit/(loss) before taxation |
( |
) |
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Taxation on ordinary activities |
– |
– |
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Profit/(loss) for the year |
( |
) |
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Intercompany Transactions – Income Statement |
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Transactions with non-issuer/non-guarantor subsidiaries (expense)/income |
( |
) |
( |
) |
( |
) |
– |
– |
||||||||||||||||
Transactions with non-issuer/non-guarantor subsidiaries net finance (cost)/income |
( |
) |
– |
– |
||||||||||||||||||||
Dividend income from non-issuer/non-guarantor subsidiaries |
– |
– |
– |
BAT Annual Report and Form 20-F 2021 |
Summarised Financial Information |
||||||||||||||||||||||||
Year ended 31 December 2020 |
BAT p.l.c. £m |
BATCAP £m |
BATIF £m |
BATNF £m |
RAI £m |
BATHTN £m |
||||||||||||||||||
Income Statement |
||||||||||||||||||||||||
Revenue |
– |
– |
– |
– |
– |
– |
||||||||||||||||||
Loss from operations |
( |
) |
( |
) |
( |
) |
– |
( |
) |
– |
||||||||||||||
Dividend income |
– |
– |
– |
|||||||||||||||||||||
Net finance income/(costs) |
– |
( |
) |
|||||||||||||||||||||
Profit before taxation |
– |
|||||||||||||||||||||||
Taxation on ordinary activities |
( |
) |
( |
) |
– |
– |
||||||||||||||||||
Profit for the year |
– |
|||||||||||||||||||||||
Intercompany Transactions – Income Statement |
||||||||||||||||||||||||
Transactions with non-issuer/non-guarantor subsidiaries (expense)/income |
( |
) |
( |
) |
– |
– |
||||||||||||||||||
Transactions with non-issuer/non-guarantor subsidiaries net finance income |
– |
– |
||||||||||||||||||||||
Dividend income from non-issuer/non-guarantor subsidiaries |
– |
– |
– |
Summarised Financial Information |
||||||||||||||||||||||||
As at 31 December 2021 |
BAT p.l.c. £m |
BATCAP £m |
BATIF £m |
BATNF £m |
RAI £m |
BATHTN £m |
||||||||||||||||||
Balance Sheet |
||||||||||||||||||||||||
Non-current assets |
||||||||||||||||||||||||
Current assets |
||||||||||||||||||||||||
Non-current liabilities |
||||||||||||||||||||||||
Non-current borrowings |
– |
– |
||||||||||||||||||||||
Other non-current liabilities |
– |
|||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||||
Current borrowings |
||||||||||||||||||||||||
Other current liabilities |
– |
– |
||||||||||||||||||||||
Intercompany Transactions – Balance Sheet |
||||||||||||||||||||||||
Amounts due from non-issuer/non-guarantor subsidiaries |
– |
|||||||||||||||||||||||
Amounts due to non-issuer/non-guarantor subsidiaries |
– |
– |
||||||||||||||||||||||
Investment in subsidiaries (that are not issuers or guarantors) |
– |
– |
Summarised Financial Information |
||||||||||||||||||||||||
As at 31 December 2020 |
BAT p.l.c £m. |
BATCAP £m |
BATIF £m |
BATNF £m |
RAI £m |
BATHTN £m |
||||||||||||||||||
Balance Sheet |
||||||||||||||||||||||||
Non-current assets |
||||||||||||||||||||||||
Current assets |
||||||||||||||||||||||||
Non-current liabilities |
||||||||||||||||||||||||
Non-current borrowings |
– |
|||||||||||||||||||||||
Other non-current liabilities |
– |
– |
||||||||||||||||||||||
Current liabilities |
||||||||||||||||||||||||
Current borrowings |
||||||||||||||||||||||||
Other current liabilities |
– |
|||||||||||||||||||||||
Intercompany Transactions – Balance Sheet |
||||||||||||||||||||||||
Amounts due from non-issuer/non-guarantor subsidiaries |
– |
|||||||||||||||||||||||
Amounts due to non-issuer/non-guarantor subsidiaries |
– |
|||||||||||||||||||||||
Investment in subsidiaries (that are not issuers or guarantors) |
– |
– |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
As at 31 December |
2021 £m |
2020 £m |
||||||
Total equity |
||||||||
Share capital |
||||||||
Share premium |
||||||||
Perpetual hybrid bonds |
– |
|||||||
Other equity |
BAT Annual Report and Form 20-F 2021 |
Albania |
Rruga e Kavajes, Ish Kombinati Ushqimor, Tirana, Albania |
British American Tobacco – Albania SH.P.K. |
Algeria |
Zone d’activité El Omran, Route de Ouled Fayet, Ilot 789- Lot 04, |
Cheraga, Alger, Algerié |
British American Tobacco (Algérie) S.P.A. (51%) |
Angola |
Viana Park, Polo Industrial, Viana, Luanda, Angola |
British American Tobacco – B.A.T. Angola, Limitada 1 |
Sociedade Geral de Distribuição e Comércio, Limitada |
Sociedade Industrial Tabacos Angola LDA (77.60%) |
Sociedade Unificada Tabacos Angola LDA (76.39%) |
Argentina |
San Martín 140, Floor 14, City of Buenos Aires, Argentina |
BAT Operaciones S.A.U. |
British American Tobacco Argentina S.A.I.C.y F. (99.98%) |
Australia |
166 William Street, Woolloomooloo, NSW 2011, Australia |
British American Tobacco South East Asia Pty Limited |
British American Tobacco Australasia Limited |
British American Tobacco Australia Limited |
British American Tobacco Australia Overseas Pty Limited |
British American Tobacco Australia Services Limited |
Rothmans Asia Pacific Limited # |
The Benson & Hedges Company Pty. Limited |
W.D. & H.O. Wills Holdings Limited |
Austria |
Dr. Karl Lueger Platz 5, 1010, Wien, Austria |
British American Tobacco (Austria) GmbH |
Bahrain |
Flat 2115, Building 2504, Road 2832, Block 428 Al Seef Area, |
Kingdom of Bahrain |
British American Tobacco Middle East W.L.L |
Bangladesh |
New DOHS Road, Mohakhali, Dhaka 1206, Bangladesh |
British American Tobacco Bangladesh Company Limited (72.91%) |
Barbados |
Chancery Chambers, Chancery House, High Street, Bridgetown, |
Barbados |
Southward Insurance Ltd. |
Belarus |
7th Floor, 3 Kuprevicha Str., Minsk, 220141, Belarus |
British-American Tobacco Trading Company Foreign Trade |
Unitary Enterprise |
Belgium |
Globe House, 4 Temple Place, London, WC2R 2PG, United Kingdom |
British American Tobacco Holdings Belgium N.V. |
Nieuwe Gentsesteenweg 21, 1702 Groot-Bijgaarden, Belgium |
British American Tobacco Belgium N.V. |
Benin |
Cotonou, Lot Numbero H19, Quartiers Les Cocotiers, 01 BP 2520, |
Benin |
British American Tobacco Benin SA |
Bolivia |
Av. Ballivian entre calles 11 y 12 No. 555, Edificio El Dorial, Piso 19, |
Oficina E, Zona de Calacoto, La Paz, Bolivia |
BAT Bolivia S.R.L. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Bosnia and Herzegovina |
Fra Dominka Mandica 24 A, 88220 Široki Brijeg, Bosnia and Herzegovina |
IPRESS d.o.o. |
ul. Azize Ša´cirbegovi´c 1, 71000 Sarajevo-Novo Sarajevo, Bosnia and Herzegovina |
TDR d.o.o. Sarajevo |
ul. Kolodvorska 12, 71000 Sarajevo-Novo Sarajevo, Bosnia and Herzegovina |
iNovine BH d.o.o. |
Botswana |
Plot 20774 Broadhurst Industrial Estate, Gaborone, Botswana |
British American Tobacco Botswana (Pty) Limited |
Business Venture Investments Botswana 6773 (Pty) Ltd. |
Brazil |
Avenida República do Chile, nº 330, Bloco 1, Torre Leste, 30º andar, Centro, Rio de Janeiro/RJ - CEP 20.031-170, Brazil |
Souza Cruz LTDA |
Yolanda Participacoes S.A. |
Brunei Darussalam |
6th Floor, Bang Hj Ahmad Laksamana Othman, 38-39, Jalan Sultan, Bandar Seri Begawan BS8811, Brunei Darussalam |
Commercial Marketers and Distributors Sdn. Bhd. (100%) (50%)^ (In Liquidation) |
Bulgaria |
115 M, Tsarigradsko Shose Blvd., Building D, Floor 5, Sofia, Mladost Municipality, 1784, Bulgaria |
British American Tobacco Trading EOOD |
Burkina Faso |
Ouagadougou, Avenue Yennega, BP: 882, Ouagadougou, Burkina Faso |
Tobacco Marketing Consultant Burkina Faso SARL |
Burundi |
Avenue de L’Uprina a Bujumbura, BP 345, Burundi |
Tabarundi SARL |
Cambodia |
1121 National Road 2, Prek Tanou Village, Sangkat Chak Ang Re Leu, Khan Mean Chey, Phnom Penh, Kingdom of Cambodia |
British American Tobacco (Cambodia) Limited (71%) |
British American Tobacco (Cambodge) International Limited |
Cameroon |
Rue Njo Njo, Bonapriso – B.P. 259, Douala, Cameroon |
British American Tobacco Cameroun S.A. (99.76%) |
Canada |
30 Pedigree Court, Brampton, Ontario, L6T 5T8, Canada |
Imperial Tobacco Canada Limited |
Imperial Tobacco Company Limited |
3711 St-Antoine West, Montreal, Quebec, H4C 3P6, Canada |
Allan Ramsay and Company Limited |
Cameo Inc. |
Genstar Corporation 2 |
Imperial Brands Limited |
Imperial Tobacco Products Limited |
Imperial Tobacco Services Inc. |
John Player & Sons Ltd |
Liggett & Myers Tobacco Company of Canada Limited (70%) (50%)^ 3 |
Marlboro Canada Limited |
Medaillon Inc. |
45 O’Connor Street, Suite 1500, Ottawa, Ontario, K1P 1A4, Canada |
2004969 Ontario Inc. |
Cayman Islands |
Trident Trust Company (Cayman) Ltd., One Capital Place, PO Box 847, Grand Cayman KY1-1103, Cayman Islands |
R.J. Reynolds Tobacco (CI), Co. |
Chile |
Isidora Goyenechea 3000, Piso 15, of 1501, Las Condes, Santiago, Chile |
BAT Chile S.A. |
British American Tobacco Chile Operaciones S.A. (99.51%) |
Inversiones Casablanca S.A. |
China (People’s Republic of) |
607, Floor 6, China Resources Tower, No. 2666 South Keyuan Road, Zhuhai Community, Yuehai Street, Nanshan District, Shenzhen, People’s Republic of China |
Nicoventures Business Consulting (Shenzhen) Co., Ltd |
Room 436, No. 1000, Zenchen Road, Baoshan District, Shanghai, People’s Republic of China |
British American (Shanghai) Enterprise Development Co., Ltd |
British American Nico Business Consulting (Shanghai) Co., Ltd |
Unit 1001 in 901, 9/F, Building 3, No.8 Guanghuadongli, Chaoyang District, Beijing, People’s Republic of China |
British American Consulting (Beijing) Co., Ltd |
Colombia |
Av. Cra. 72 # 80-94 Piso 10. Bogotá, Colombia |
British American Tobacco Colombia S.A.S. |
Vype Colombia S.A.S. |
Congo (Democratic Republic of) |
1er étage, Immeuble du Centenaire, Gombe, Kinshasa, Democratic Republic of Congo |
British American Tobacco Congo SARL (In Liquidation) |
BAT Distribution SARL (In Liquidation) |
1st floor Immeuble L’horizon sis avenue Colonel Lukusa n.50, Gombe, Kinshasa, Democratic Republic of Congo |
British American Tobacco Services Congo SARL |
British American Tobacco Import SARL |
Costa Rica |
325 Metros este del Puente de la Firestone, Llorente, Flores, Heredia, Costa Rica |
BASS Americas S.A. |
BATCCA Park Inversiones Immobiliarias, S.A. |
BATCCA Servicios S.A. |
BAT Annual Report and Form 20-F 2021 |
Croatia |
Draškovi´ceva 27, 10000 Zagreb, Croatia |
Inovine d.d. (93.42%) |
Ivana Lu
![]() |
BAT HRVATSKA d.o.o. u likvidaciji |
Obala V. Nazora 1, 52210 Rovinj, Croatia |
TDR d.o.o. |
Osje
![]() |
Hrvatski Duhani d.d. Tobacco Leaf Processing (89.55%) (95.25%)^ |
Cuba |
Parcela nº 2 a noroeste do terminal de contêineres de Mariel, a 2,2 km do vértice nº 4, Município de Mariel, Província de Artemisa, na República de Cuba. |
Brascuba Cigarrillos S.A. (50%) |
Cyprus |
Photiades Business Centre, 5th Floor, 8 Stasinou Avenue, Nicosia, CY-1060, Cyprus |
B.A.T (Cyprus) Limited |
Rothmans (Middle East) Limited |
Czech Republic |
Karolinská 654/2, Prague 8 – Karlín, 186 00, Czech Republic |
British American Tobacco (Czech Republic), s.r.o. |
Denmark |
Bernstorffsgade 50, 1577 Copenhagen, Denmark |
British American Tobacco Denmark A/S (House of Prince A/S) |
Precis (1789) Denmark A/S |
Djibouti |
Rue de Magadiscio, Lot No. 133, Djibouti City, Djibouti |
British American Tobacco Djibouti SARL |
Egypt |
Administrative unit no.1, 5th Floor, Building S2B, Sector A, Downtown Mall Katameya, 5th settlement, New Cairo, Egypt |
BETCO for General Services and Marketing LLC |
BETCO for Trade and Distribution LLC |
British American Tobacco Egypt LLC |
British American Tobacco North Africa LLC |
English American Company for Importation and Trade LLC |
(In Liquidation) |
Eritrea |
P.O. Box 749, 62 Fel Ket Street, Asmara, Eritrea |
British American Tobacco (Eritrea) Share Company # |
Estonia |
Tornimäe 7-10, 10145 Tallinn, Estonia |
British American Tobacco Estonia AS |
Fiji |
Lady Maria Road, Nabua, Suva, Fiji |
British American Tobacco (Fiji) Marketing Pte Limited |
Central Manufacturing Company Pte Limited |
Rothmans of Pall Mall (Fiji) Pte Limited |
Finland |
c/o Retail 24, Olarinluoma 7, 02200 Espoo, Finland |
British American Tobacco Finland Oy |
France |
111 Avenue Victor Hugo, Paris, 75016, France |
Carreras France SAS |
Tour Légende, 20 place de la Défense, CS 80289, 92050 Paris La Défense Cedex, France |
British American Tobacco France SAS |
Germany |
Alsterufer 4, 20354 Hamburg, Germany |
BATIG Gesellschaft fur Beteiligungen m.b.H. |
British American Tobacco (Germany) GmbH |
British American Tobacco (Industrie) GmbH |
Schutterwalder Straße. 23, 01458 Ottendorf-Okrilla, Germany |
Quantus Beteiligungs – und Beratungsgesellschaft mbH |
Ghana |
4th Floor, Volta Place, Airport Residence Area, Patrice Lumumba Street, Accra, Ghana |
British American Tobacco Ghana Limited (97.09%) |
Greece |
27, Ag. Thoma Street, Maroussi, 151 24, Greece |
British American Tobacco Hellas S.A. |
Guernsey |
St. Martin’s House, Le Bordage, St. Peter’s Port, GY1 4AU, Guernsey |
Belaire Insurance Company Limited |
Guyana |
Lot 122 Parade Street, Kingston, Georgetown, Guyana |
Demerara Tobacco Company Limited (70.25%) |
Honduras |
Boulevard del Sur, Zona El Cacao, San Pedro Sula, Depart.de Cortés, Honduras |
Tabacalera Hondureña S.A. (83.64%) |
Hong Kong |
11/F, One Pacific Place, 88 Queensway, Hong Kong |
British American Tobacco China Investments Limited |
LEHMAN, LEE & XU CORPORATE SERVICES, Suite 3313, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong |
Reynolds Asia-Pacific Limited |
Level 30, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong |
British American Tobacco Asia-Pacific Region Limited |
British-American Tobacco Company (Hong Kong) Limited |
Level 24, Suites 2407 - 09, 3 Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong |
BAT Global Travel Retail Limited |
Hungary |
H-1124, Budapest, Csörsz utca 49-51. 3. em., Hungary |
BAT Pécsi Dohánygyár Korlátolt Felelosségu Társaság |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Indonesia |
Capital Place Office Tower, 6th Floor, Jl. Gatot Subroto Kav. 18, Jakarta 12710 Indonesia |
PT Bentoel Internasional Investama, Tbk (99.96%) |
Jl. Raya Karanglo, 1 Desa Banjararum, Kecamatan Singosari, Jawa Timur 65153 Indonesia |
PT Bentoel Prima 4 (100%) (99.99%)^ |
Jl. Susanto No. 2B, Ciptomulyo, Sukun, Malang, Jawa Timur 65148 Indonesia |
PT Bentoel Distribusi Utama (100%) (99.8%)^ |
Iraq |
Empire Business Tower, Building C5, 2nd Floor, Erbil, Kurdistan Region of Iraq |
B.A.T. Iraqia Company for Tobacco Trading Limited |
Ireland |
Suite D, 2nd Floor, The Apex Building, Blackthorn Road, Sandyford Industrial Estate, Dublin 18, Republic of Ireland |
Carroll Group Distributors Limited |
P.J. Carroll & Company Limited |
Rothmans of Pall Mall (Ireland) Limited 5 |
Isle of Man |
2nd Floor, St Mary’s Court, 20 Hill Street, Douglas, IM1 1EU, Isle of Man |
Abbey Investment Company Limited |
The Raleigh Investment Company Limited |
Tobacco Manufacturers (India) Limited |
Italy |
Via Amsterdam 147, 00144 Rome, Italy |
British American Tobacco Italia S.p.A. |
Ivory Coast |
Rue des Jardins -Immeuble Sayegh-Mezzanine, Abidjan, Cocody 2 plateaux, Côte d’Ivoire |
British American Tobacco RCI SARL |
Jamaica |
13A Ripon Road, Kingston 5, Jamaica |
Carreras Limited (50.40%) 9 |
Sans Souci Development Limited (100%) (50.40%) ^ 9 |
Sans Souci Limited (100%) (50.40%) ^ 9 |
Japan |
Midtown Tower 20F, 9-7-1 Akasaka, Minato-ku, Tokyo, Japan |
British American Tobacco Japan, Ltd. |
Jersey |
22 Grenville Street, St Helier, JE4 8PX, Jersey |
Pathway 5 (Jersey) Limited |
Jordan |
Airport Road, Al Qastal Industrial Area, Air Cargo Road, Amman, Jordan |
British American Tobacco – Jordan Private Shareholding Company Limited |
Kazakhstan |
240G, Nursultan Nazarbayev avenue, A26F8D4 Almaty, Republic of Kazakhstan |
British American Tobacco Kazakhstan Trading LLP |
Kenya |
8 Likoni Road, Industrial Area, P.O. Box 30000-00100, Nairobi, Kenya |
BAT Kenya Tobacco Company Limited (100%) (60%)^ |
British American Tobacco Area Limited |
British American Tobacco Kenya plc (60%) |
East African Tobacco Company (Kenya) Limited (100%) (60%)^ (In Liquidation) |
Korea, Republic of |
141, Gongdan1-ro, Sanam-Myun, Sacheon City, Kyungsangnamdo, Korea (the Republic of) |
British American Tobacco Korea Manufacturing Limited |
42FI Gangnam Finance Center, 152 Teheran-ro, Gangnam-gu, Seoul, Korea (the Republic of) |
British American Tobacco Korea Limited |
Kosovo, Republic of |
Llapllaselle p.n., 10500 Gracanicë, Republic of Kosovo |
British American Tobacco Kosovo SH.P.K. |
Latvia |
Mukusalas iela 101, Riga LV-1004, Latvia |
British American Tobacco Latvia SIA |
Lithuania |
J. Galvydžio g. 11-7, LT-08236 Vilnius, Lithuania |
UAB British American Tobacco Lietuva |
Luxembourg |
1, Rue Jean Piret, 2350 Luxembourg, Grand Duchy of Luxembourg |
British American Tobacco Brands (Switzerland) Limited |
Malawi |
Northgate Arcade Complex, Masauko Chipembere Highway, Blantyre, Malawi |
British American Tobacco (Malawi) Limited |
Malaysia |
12th Floor, Menara Symphony, No. 5, Jalan Prof Khoo Kay Kim, Seksyen 13, 46200, Petaling Jaya, Selangor Darul Ehsan, Malaysia |
British American Tobacco GSD (Kuala Lumpur) Sdn Bhd |
Level 11, Sunway Geo Tower, Jalan Lagoon Selatan, Sunway South Quay, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan, Malaysia |
BAT Aspac Service Centre Sdn Bhd |
Level 19, Guoco Tower, Damansara City, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala Lumpur, Malaysia |
British American Tobacco Malaysia Foundation 8 |
British American Tobacco (Malaysia) Berhad (50%) |
Commercial Marketers and Distributors Sdn. Bhd. (100%) (50%)^ |
Rothmans Brands Sdn. Bhd. (100%) (50%)^ (In Liquidation) |
Tobacco Importers and Manufacturers Sdn. Bhd. (100%) (50%)^ |
BAT Annual Report and Form 20-F 2021 |
Mali |
DJELIBOUGOU-Immeuble BASSARO- BP 2065, Bamako -Mali |
British American Tobacco (Mali) Sarl |
Malta |
PM Building, Level 2, Bone Street, Zone 1, Central Business District, Birkirkara, CBD 1060, Malta |
British American Tobacco (Malta) Limited |
Central Cigarette Company Limited |
Rothmans of Pall Mall (Malta) Limited |
Mexico |
Francisco I Madero 2750 Poniente, Colonia Centro, Monterrey, Nuevo León, C.P. 64000, Mexico |
BAT DBS Mexico S.A. de C.V. 4 |
British American Tobacco Mexico Comercial, S.A. de C.V. |
British American Tobacco Mexico, S.A. de C.V. 4 |
British American Tobacco Servicios S.A. de C.V. |
Cigarrera La Moderna, S.A. de C.V. |
Predio Los Sauces Sin número, Colonia Los Sauces, C.P. 63197, Tepic, Nayarit, Mexico |
Procesadora de Tabacos de Mexico, S.A. de C.V. (93%) |
Moldova, Republic of |
65, Stephan cel Mare Str., off. 416, Chisinau, MD2001, Republic of Moldova |
British American Tobacco – Moldova S.R.L. |
Mozambique |
2289 Avenida de Angola, Maputo, Mozambique |
British American Tobacco Mozambique Limitada (95%) |
Myanmar |
Min Aye Yar Street, Plot No. (55, 56), Survey Ward No. (14) Shwe Than Lwin Industrial Zone, Hlaing Tharyar Township Yangon Region, Myanmar |
British American Tobacco Myanmar Limited (95%) 9 |
British American Tobacco Myanmar Services Limited 9 |
Namibia |
24 Orban Street, Klein Windhoek, Namibia |
Twisp (Pty) Limited |
Shop 48, Second Floor Old Power Station Complex, Armstrong Street, Windhoek, Namibia |
British American Tobacco Namibia (Pty) Limited |
Netherlands |
Handelsweg 53 A, 1181 ZA, Amstelveen, Netherlands |
Aruba Properties B.V. |
B.A.T. Netherlands Finance B.V. |
British American Tobacco European Operations Centre B.V. |
British American Tobacco Exports B.V. |
British American Tobacco Holdings (Australia) B.V. |
British American Tobacco Holdings (Malaysia) B.V. |
British American Tobacco Holdings (South Africa) B.V. |
British American Tobacco Holdings (The Netherlands) B.V. |
British American Tobacco Holdings (Venezuela) B.V. |
British American Tobacco Holdings (Vietnam) B.V. |
British American Tobacco International (Holdings) B.V. |
Molensteegh Invest B.V. |
Precis (1790) B.V. |
Rothmans Far East B.V. |
Rothmans International Holdings B.V. |
Rothmans Tobacco Investments B.V. |
Rothmans UK Holdings B.V. |
New Zealand |
2 Watt Street, Parnell, Auckland, 1052, New Zealand |
BAT (New Zealand) Limited |
BAT Holdings (New Zealand) Limited |
Mint Advisory Limited, Suite 6, 8 Turua Street, St Heliers, Auckland, 1071, New Zealand |
New Zealand (UK Finance) Limited # |
Nigeria |
1, Tobacco Road, Oluyole Local Government Area, Ibadan, Oyo State, Nigeria |
British American Tobacco (Nigeria) Limited |
2 Olumegbon Road, Ikoyi, Lagos, Nigeria |
British American Tobacco Marketing Nigeria Limited |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
North Macedonia, Republic of |
Blvd. 8-mi SEPTEMVRI No. 18, 1000 Skopje, Republic of Macedonia |
TDR SKOPJE DOOEL Skopje |
Norway |
Dronning Eufemias Gate 42. 0191 Oslo, Norway |
British American Tobacco Norway AS |
Pakistan |
Serena Business Complex. Khayaban-e-Suhrwardy, Islamabad, Pakistan |
British American Tobacco SAA Services (Private) Ltd |
Pakistan Tobacco Company Limited (94.65%) |
Bun Khurma Chichian Road, Mirpur Azad Jammu & Kashmir, Pakistan |
Phoenix (Private) Limited (100%) (94.65%)^ |
Panama |
Calle 54, Obarrio, PH Twist Tower, Piso 22, Oficina E-22, Corregimiento Bella Vista, Ciudad de Panama, Panama |
British American Tobacco Central America S.A. (87.65%) |
British American Tobacco Panama S.A. |
Tabacalera Istmeña S.A. |
Via Fernandez de Cordoba, Corregimiento of Pueblo Nuevo, Panama City, Panama |
BAT Caribbean, S.A. |
Papua New Guinea |
Ashurst Png, Level 11 Mrdc Haus, Cnr Of Musgrave Street and Champion Parade, Port Moresby, National Capital District, Papua New Guinea |
British American Tobacco (PNG) Limited |
Papua New Guinea Tobacco Co. Ltd |
Paradise Tobacco Co. Limited |
Rothmans of Pall Mall (P.N.G) Limited |
Paraguay |
Roque Centurion Miranda 1635, AYMAC II, Piso 2, Asunción, Paraguay |
British American Tobacco Productora de Cigarrillos S.A. |
Peru |
Av. El Derby No 055, Torre 3, Oficinas 405-406-407-408, Urb. Lima Polo and Hunt Club, Santiago de Surco, Lima, Perú |
British American Tobacco del Peru Holdings S.A. (98.55%) 6 |
British American Tobacco del Peru, S.A.C. |
Philippines |
31 Tayuman Street, Tondo, Manila, Philippines |
Alhambra Industries Inc. # |
Poland |
Aleja Wojska Polskiego 23c, 63-500, Ostrzeszow, Poland |
CHIC sp.zo.o |
Chic Holding sp.zo.o (In Liquidation) |
ESMOKING LIQUIDS SP. Z O.O |
Krakowiakow 48, 02-255, Warszawa, Poland |
British American Tobacco Polska Trading sp. zo.o. |
Rubiez 46, 61-612, Poznan, Poland |
eSMOKING INSITUTE sp.zo |
ul. IŁZECKA 26E, 02-135, Warszawa, Poland |
Nicoventures Poland sp. Z.o.o. |
Ul. Tytoniowa 16, 16-300, Augustow, Poland |
British-American Tobacco Polska S.A. |
Portugal |
Edificio Amoreiras Square, Rua Carlos Alberto da Mota Pinto 17, 3e A, 1070-313, Amoreiras, Lisboa, Portugal |
COTAPO Empreendimentos Commerciais e Industriais S.A. |
Sociedade Unificada de Tabacos Limitada (76.4%) |
Qatar |
P.O. Box 6689, 41 Floor, Tornado Tower, West Bay, Doha, Qatar |
British American Tobacco Q LLC |
Réunion |
5, Immeuble Cap, Avenue Théodore Drouhet, ZAC Horizon 2000, Le Port, 97420, IIe de la Réunion |
B.A.T. La Reunion SAS |
Romania |
319 Splaiul Independentei, Sema Parc ‘City Building’, 1st Floor, 6th Sector, Bucharest, Romania |
British American Shared Services (Europe) S.R.L. |
319 Splaiul Independentei, Sema Parc ‘City Building’, 6th Floor, 6th Sector, Bucharest, Romania |
BRITISH American GBS Recruitment S.R.L. |
Ploiesti, 17-19 Laboratorului Street, Prahova County, Romania |
British-American Tobacco (Romania) Investment S.R.L. |
Bucharest Business Park, Building A (3rd floor) and Building B2 (floors 3-4), 1A Bucuresti – Ploiesti (DN1) Road, Sector 1, Bucharest 013681, Romania |
British American Tobacco (Romania) Trading SRL |
Russia |
38, 3rd Konnaya lakhta, Saint Petersburg, 197229 Russia |
JSC ‘British American Tobacco-SPb’ # |
Building 2, 17 Krylatskaya Street, Moscow, 121614 Russia |
JSC ‘International Tobacco Marketing Services’ |
Rwanda |
SORAS Building, Boulevard de la Revolution P.O Box 650 Kigali, Rwanda |
British American Tobacco Rwanda Limited |
Saint Lucia |
c/o ADCO Incorporated, 10 Manoel Street, Castries, Saint Lucia |
Carisma Marketing Services Ltd |
Pointe Seraphine, Castries, Saint Lucia |
Rothmans Holdings (Caricom) Limited |
Samoa |
Vaitele Estate, Vaitele, Samoa |
British American Tobacco Company (Samoa) Limited |
Saudi Arabia, Kingdom Of |
7051 Al Amir Sultan-Al Salamah District, Unit 1302. Jeddah 23525 - 2661, Saudi Arabia |
BAT Saudia for Trading |
BAT Arabia for Trading |
Senegal |
Almadies, Route Hôtel Méridien en Face Club Med, Dakar, Senegal BP 3174 |
Tobacco Marketing Consultant TMC S.A.R.L. (In Liquidation) |
BAT Annual Report and Form 20-F 2021 |
Serbia |
Bulevar Milutina Milankovica 1ž, Belgrade, 11070, Serbia |
British American Tobacco South – East Europe d.o.o. Beograd |
Kralja Stefana Provencanog 209, Vranje, 17500, Serbia |
British American Tobacco Vranje a.d. Vranja |
Singapore |
15 Senoko Loop, Singapore, 758168 |
British-American Tobacco (Singapore) Private Limited |
British-American Tobacco Marketing (Singapore) Private Limited |
18 Ah Hood Road #12-51, Hiap Hoe Bldg at Zhongshan Park, Singapore, 329983 |
British American Tobacco Sales & Marketing Singapore Pte. Ltd. |
Shenton Way, #33-00 OUE Downtown, Singapore 068809 |
RHL Investments Pte Limited # (In Liquidation) |
Slovenia |
Bravni
![]() |
British American Tobacco d.o.o. |
Solomon Islands |
Kukum Highway, Ranadi, Honiara, Honiara, Solomon Islands |
Solomon Islands Tobacco Company Limited |
South Africa |
Waterway House South, 3 Dock Road, V&A Waterfront, Cape Town, Western Cape 8002, South Africa |
Agrega EEMEA (Pty) Ltd |
Amalgamated Tobacco Corporation (South Africa) (Pty) Ltd |
American Cigarette Company (Overseas) (Pty) Ltd |
Benson and Hedges (Pty) Ltd |
British American Shared Services Africa Middle East (Pty) Ltd |
British American Tobacco GSD (South Africa) (Pty) Ltd |
British American Tobacco Holdings South Africa (Pty) Ltd # |
British American Tobacco Properties South Africa (Pty) Ltd. |
British American Tobacco Services South Africa (Pty) Ltd |
British American Tobacco South Africa (Pty) Ltd |
British American Tobacco East and Southern Africa (Pty) Ltd |
Brown & Williamson Tobacco Corporation (Pty) Ltd |
Business Venture Investments No 216 (Pty) Ltd |
Carlton Cigarette Company (Pty) Ltd |
John Chapman (Pty) Ltd |
John Player & Sons (Pty) Ltd |
Kentucky Tobacco Corporation (Pty) Ltd |
Martins of London (Pty) Ltd |
Rembrandt Tobacco Corporation (Overseas) (Pty) Ltd |
Riggio Tobacco Corporation of New York (Pty) Ltd |
Rothmans of Pall Mall London (Pty) Ltd |
St Regis Tobacco Corporation (Pty) Ltd |
Thomas Bear’s Son and Company (Pty) Ltd |
Tobacco Research and Development Institute (Pty) Ltd |
Twisp (Pty) Ltd |
WD and HO Wills (Pty) Ltd |
Westminster Tobacco Company (Cape Town and London) (Pty) Ltd |
Winfield Tobacco Corporation (Pty) Ltd |
Winston Tobacco Company (Pty) Ltd |
Spain |
Torreo Espacio, Paseo de la Castellana, 259D, 28046 Madrid, Spain |
British American Tobacco España, S.A. |
Sri Lanka |
178 Srimath Ramanathan Mawatha, Colombo, 15, Sri Lanka |
Ceylon Tobacco Company Plc (84.13%) |
Sudan |
Byblos Tower, Al-Muk Nemer Street, Postal Code 11111, P.O. Box 1381, Khartoum, Sudan |
Blue Nile Cigarette Company Limited |
Swaziland |
213 King Mswati III Avenue West, Matsapha Industrial Site, Mutsapha, eSwatini |
British American Tobacco Swaziland (Pty) Limited |
Sweden |
Hyllie Boulevard 32, 215 32 Malmö, Sweden |
Niconovum AB |
Stenåldersgatan 23, 213 76 Malmö, Sweden |
Fiedler & Lundgren AB |
Winnington AB |
Västra Trädgårdsgatan 15, 11153 Stockholm, Sweden |
British American Tobacco Sweden AB |
Switzerland |
c/o British American Tobacco Switzerland S.A., Route de France 17, 2926 Boncourt, Switzerland |
American-Cigarette Company (Overseas) Limited |
British American Tobacco Switzerland SA |
BAT Switzerland Vending SA |
Rothmans of Pall Mall Limited |
Route de France 17, 2926 Boncourt, Switzerland |
Nicoventures Communications (Switzerland) SA |
c/o NBA Fiduciaire S.A., Route de la Glâne 107, c/o NBA Fiduciaire S.A. 1752 Villars-sur-Glâne, Switzerland |
Intertab S.A. (50%) |
c/o Bright Law AG, Bundesplatz, 6302 Zug, Switzerland |
British American Tobacco International Limited (In Liquidation) |
Tanzania |
Acacia Estate Building, Kinondoni Road, P.O Box 288, Dar es Salaam, Tanzania |
BAT Distribution Tanzania Limited |
British American Tobacco (Tanzania) Limited (In Liquidation) |
International Cigarette Distributors Limited (99%) (In Liquidation) |
Zanzibar Distribution Company Limited (99%) (In Liquidation) |
Trinidad and Tobago |
Corner Eastern Main Road and Mt. D’or Road, Champs Fleurs, Trinidad and Tobago |
The West Indian Tobacco Company Limited (50.13%) |
Turkey |
Orjin Maslak İş Merkezi, Eski Büyükdere Caddesi, Kat 9-10, Maslak, Sarıyer, İstanbul |
British American Tobacco Tütün Mamulleri Sanayi ve Ticaret Anonim Sirketi |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Uganda |
10th Floor, Lotis Towers, Plot 16 Mackinnon Road, Nakasero, Kampala, Uganda |
British American Tobacco Uganda Limited (90%) |
Ukraine |
13-15 Bolsunovska Str, Kyiv, 01014 Ukraine |
LLC ‘British American Tobacco Sales and Marketing Ukraine’ |
21 Nezalezhnosti Str, Chernihiv Oblast, Prylucky, 17502, Ukraine |
PJSC ‘A/T B.A.T. – Prilucky Tobacco Company’ |
United Arab Emirates |
Jumeriah Business Centre 3, 37th Floor, Jumeirah Lake Towers, Dubai, P.O. Box 337222, United Arab Emirates |
British American Tobacco GCC DMCC |
British American Tobacco ME DMCC |
Unit # 2680, DMCC Business Center- Level # 1, Jewellery & Gemplex 3 Dubai, United Arab Emirates |
British American Tobacco International DMCC |
United Kingdom |
212-218 Upper Newtownards Road, Belfast, BT4 3ET, Northern Ireland |
Murray, Sons & Company, Limited |
7 More London, Riverside, London, SE1 2RT, United Kingdom |
Ryesekks P.L.C. (50%) (In Liquidation) |
Building 7, Chiswick Business Park, 566 Chiswick High Road, London, W4 5YG, United Kingdom |
British American Tobacco UK Limited |
Ten Motives Limited |
10 Motives Limited |
Globe House, 1 Water Street, London, WC2R 3LA, United Kingdom |
Advanced Technologies (Cambridge) Limited |
Allen & Ginter (UK) Limited |
B.A.T (U.K. and Export) Limited |
B.A.T Cambodia (Investments) Limited |
B.A.T Far East Holding Limited |
B.A.T Far East Leaf Limited |
B.A.T Services Limited |
B.A.T Uzbekistan (Investments) Limited |
B.A.T Vietnam Limited |
B.A.T. (Westminster House) Limited |
B.A.T. China Limited |
BAT Finance COP Limited |
BATIF Dollar Limited |
BATUS Limited |
Big Ben Tobacco Company Limited |
British American Shared Services (GSD) Limited |
British American Shared Services Limited |
British American Tobacco (AIT) Limited |
British American Tobacco (GLP) Limited |
British American Tobacco (Investments) Limited |
British American Tobacco (Philippines) Limited |
British American Tobacco (Serbia) Limited |
British American Tobacco (South America) Limited |
British American Tobacco China Holdings Limited |
British American Tobacco Exports Limited |
British American Tobacco Georgia Limited |
British American Tobacco Global Travel Retail Limited |
British American Tobacco International Holdings (UK) Limited |
British American Tobacco Investments (Central & Eastern Europe) Limited |
British American Tobacco Italy Investments Limited |
British American Tobacco Italy Limited |
British American Tobacco Korea (Investments) Limited |
British American Tobacco Malaysia (Investments) Limited |
British American Tobacco Peru Holdings Limited |
British American Tobacco UK Pension Fund Trustee Limited 9 |
British-American Tobacco (Mauritius) p.l.c. |
Carreras Rothmans Limited # |
Chelwood Trading & Investment Company Limited |
East African Tobacco Company (U.K.) Limited |
Kbio Holdings Limited |
Lord Extra Limited |
Myddleton Investment Company Limited |
Nicovations Limited |
Nicoventures Holdings Limited |
Nicoventures Retail (UK) Limited |
Nicoventures Trading Limited |
Powhattan Limited |
Precis (2396) Limited |
Ridirectors Limited |
Rothmans Exports Limited |
Rothmans International Limited |
Rothmans International Services Limited |
Rothmans International Tobacco (UK) Limited |
Rothmans of Pall Mall (Overseas) Limited |
Rothmans Trading Limited |
Ryservs (1995) Limited |
Ryservs (No.3) Limited |
Tobacco Exporters International Limited |
Tobacco Marketing Consultants Limited |
Venezuela Property Company Limited |
Westanley Trading & Investment Company Limited |
Westminster Tobacco Company Limited |
Globe House, 2 Milford Lane, London, WC2R 3LN, United Kingdom |
World Investment Company Limited |
BAT Annual Report and Form 20-F 2021 |
Globe House, 4 Temple Place, London, WC2R 2PG, United Kingdom |
Amalgamated Tobacco Company Limited |
American Cigarette Company (Overseas) Limited |
Ardath Tobacco Company Limited |
B.A.T Additional Retirement Benefit Scheme Trustee Limited |
B.A.T Industries p.l.c. |
B.A.T. International Finance p.l.c.* |
B.A.T. Operating Finance Limited |
BATLaw Limited |
BATMark Limited* |
Benson & Hedges (Overseas) Limited |
British American Global Shared Services Limited |
British American Tobacco (1998) Limited* |
British American Tobacco (2009) Limited |
British American Tobacco (2009 PCA) Limited |
British American Tobacco (2012) Limited |
British American Tobacco (Brands) Limited |
British American Tobacco (Corby) Limited |
British American Tobacco (NGP) Limited |
British American Tobacco Healthcare Trustee Limited |
British American Tobacco Taiwan Logistics Limited |
British-American Tobacco (Holdings) Limited |
Brown & Williamson Tobacco Corporation (Export) Limited |
Btomorrow Ventures Limited |
Carreras Limited |
Courtleigh of London Limited |
Dunhill Tobacco of London Limited |
John Sinclair Limited |
Louisville Securities Limited |
Moorgate Tobacco Co. Limited |
Peter Jackson (Overseas) Limited |
Precis (1789) Limited |
Precis (1814) Limited |
Rothmans International Enterprises Limited |
Rothmans of Pall Mall Limited |
Senior Service (Overseas) Limited |
South Western Nominees Limited |
The London Tobacco Company Limited |
Tobacco Insurance Company Limited |
Weston (2009) Limited |
Weston Investment Company Limited |
United States |
CSC-Lawyers Incorporating Service, 2710 Gateway Oaks Drive, Suite 150N, Sacramento CA 95833-3505, United States |
Genstar Pacific Corporation |
251 Little Falls Drive, Wilmington, DE 19808, United States |
B.A.T Capital Corporation |
BATUS Holdings Inc. |
BATUS Japan, Inc. |
BATUS Retail Services, Inc. |
British American Tobacco (Brands), Inc. |
Brown & Williamson Holdings, Inc. |
BT DE Investments Inc. |
Btomorrow Innovation Hub Inc. |
BTI 2014 LLC |
Imasco Holdings Group, Inc. |
Imasco Holdings, Inc. |
ITL (USA) Limited |
Louisville Corporate Services, Inc. |
Nicoventures U.S. Limited |
Farmers Bank Building, Suite 1402, 301 N. Market Street, Wilmington, DE 19801, United States |
Reynolds Finance Company |
3700 Airpark Drive, Owensboro, KY 42301, United States |
KBio, Inc. |
401 N. Main Street, Winston-Salem, NC 27101, United States |
Conwood Holdings, Inc. |
EXP Homes, LLC |
Lorillard Licensing Company LLC |
Lorillard, LLC |
Modoral Brands Inc. |
Northern Brands International, Inc. |
R.J. Reynolds Global Products, Inc. |
R.J. Reynolds Tobacco Company |
R.J. Reynolds Tobacco International, Inc |
R.J. Reynolds Vapor Company |
R.J. Reynolds Tobacco Co. |
R.J. Reynolds Tobacco Holdings, Inc. |
RAI Innovations Company |
RAI International, Inc. |
RAI Services Company |
RAI Strategic Holdings, Inc. |
Reynolds American Inc. |
Reynolds Brands Inc. |
Reynolds Marketing Services Company |
Reynolds Technologies, Inc. |
RJR Realty Relocation Services, Inc. |
RJR Vapor Co., LLC |
Rosswil LLC |
S.F. Imports, Inc. |
Spot You More, Inc. |
Vuse Stores LLC |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
3220 Knotts Grove Road, Oxford, NC 27565, United States |
Santa Fe Natural Tobacco Company, Inc. |
5106, Tradeport Dr., Memphis, TN 38141, United States |
American Snuff Company, LLC |
Uruguay |
Juncal 1392, Montevideo, Uruguay |
Kellian S.A. |
Uzbekistan |
77 Minor Passage, Tashkent, 100084, Uzbekistan |
JSC JV “UZBAT A.O.” (97.38%) |
Venezuela |
Registro Mecantil Primero de la Circunscripción, Judical des Distrito, Capital y Estado, Miranda, Venezuela |
Agrega de Venezuela, Agreven, C.A. (50%) (In Liquidation) |
Avenida Francisco de Miranda, Edificio Bigott, Los Ruices, Caracas – Estado Miranda, 1010, Venezuela |
Agrobigott, C.A. |
Compania Anonima Cigarrera Bigott Sucesores |
Distribuidora Bigott, C.A. |
Avenida Francisco de Miranda, Torre Regelfall, Municipio Chacao, Estado, Miranda, Caracas, Venezuela |
Proyectos de Inversion BAT 1902 C.A. |
Vietnam |
20/F Mplaza Saigon, 39 Le Duan Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam |
East Asia Area Services Company Limited 7 |
Area 8, Long Binh Ward, Bien Hoa City, Dong Nai Province, Vietnam |
British American Tobacco – Vinataba (JV) (70%) 7 |
Lot 45C/I, Road #7, Vinh Loc Industrial Park, Binh Chanh District, Ho Chi Minh City, Vietnam |
VINA-BAT Joint Venture Company Limited (49%) 7 |
Zambia |
Plot No. PH1 IND & 53 & 54, LS-MFEZ, Chifwema Road, Lusaka, Zambia |
British American Tobacco (Zambia) plc (78.08%) |
Zimbabwe |
Manchester Road 1, Southerton, Harare, Zimbabwe |
American-Cigarette Company (Overseas) (Private) Ltd |
British American Tobacco Zimbabwe (Holdings) Limited (63.74%) |
House of Raleigh Limited |
Rothmans Limited |
Associated Undertakings and Joint Ventures |
Canada |
35 English Drive, Moncton, New Brunswick, E1E 3X3, Canada |
Organigram Holdings Inc. (18.8%) |
France |
88 Avenue des Ternes, 75017, Paris, France |
Alcome SAS (24%) |
Hungary |
H-6800 Hódmezóvásárhely, Erzsébeti út 5/b, Hungary |
Országos Dohányboltellátó Korlátolt Felelosségu Társaság (49%) |
India |
Virginia House, 37, J.L. Nehru Road, Kolkata, 700071, India |
ITC Limited (29.37%) 9 |
Azamabad, Andhra Pradesh, Hyderabad, 500 020, India |
VST Industries Limited (32.16%) 9 |
United Kingdom |
4a Station Parade, Uxbridge Road, London, W5 3LD, United Kingdom |
AYR LTD (13.14%) 10 |
Uzbekistan |
Gulobod Village, Samarkand Region, 140100, Uzbekistan |
FE “Samfruit” JSC (42.61%) |
Yemen |
P.O. Box 14, Sanna, Yemen |
Kamaran Industry and Investment Company (31%) |
P.O. Box 5302, Hoban, Taiz, Yemen |
United Industries Company Limited (32%) |
Joint Operations |
Hong Kong |
29/F, Oxford House, 979 King’s Road, Taikoo Place, Quarry Bay, Hong Kong |
CTBAT International Co. Limited (50%) |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
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350 |
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352 |
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Shareholder Information |
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353 |
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354 |
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356 |
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360 |
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383 |
BAT Annual Report and Form 20-F 2021 |
– |
the United States (U.S. – Reynolds American Inc.); |
– |
Asia-Pacific and the Middle East (APME); |
– |
Americas and Sub-Saharan Africa (AmSSA); and |
– |
Europe and North Africa (ENA). |
– |
1999 - global merger with Rothmans International; |
– |
2000 - acquisition of Imperial Tobacco Canada; |
– |
2003 - acquisition of Ente Tabacchi Italiani S.p.A., Italy’s state-owned tobacco company, Tabacalera Nacional in Peru and Duvanska Industrija Vranje in Serbia; |
– |
2004 - the U.S. assets, liabilities and operations, other than certain specified assets and liabilities, of BAT’s wholly-owned subsidiary, B&W, were combined with RJR Tobacco Company to form Reynolds American Inc. As a result of the B&W business combination, B&W acquired beneficial ownership of approximately 42% of the Reynolds American Inc. shares; |
– |
2008 - acquisition of Tekel, the Turkish state-owned tobacco company and the cigarette and snus business of Skandinavisk Tobakskompagni A/S; |
– |
2009 - acquisition of an effective 99% interest in Bentoel in Indonesia; |
– |
2011 - acquisition of Protabaco in Colombia; |
– |
2012 - acquisition of CN Creative Limited in the UK; |
– |
2013 - entered into joint operations in China; |
– |
2015 - acquisition of the shares not already owned by the Group in Souza Cruz in Brazil, the acquisition of the CHIC Group in Poland, the acquisition of TDR d.o.o., a cigarette manufacturer in Central Europe. Also in 2015, the Group increased its investment in Reynolds American Inc. by US$4.7 billion to maintain the Group’s approximate 42% equity position following Reynolds American Inc.’s purchase of Lorillard Inc.; |
– |
2016 - acquisition of Ten Motives in the UK; |
– |
2017 - acquisition of the remaining 57.8% of Reynolds American Inc. the Group did not already own. Following completion of the acquisition, Reynolds American Inc. became an indirect, wholly-owned subsidiary of BAT and is no longer a publicly-held corporation. In 2017, the Group also acquired certain tobacco assets from Bulgartabac Holding AD in Bulgaria and Fabrika Duhana Sarajevo (FDS) in Bosnia, acquired Winnington Holdings AB in Sweden and acquired certain assets from Must Have Limited in the UK, including the electronic cigarette brand ViP. |
– |
2018 - acquisition of Quantus Beteiligungs-und Beratungsgesellschaft mbH in Germany; |
– |
2019 - acquisition of the Twisp Propriety Limited in South African and 60% of VapeWild Holdings LLC in the US; |
– |
2020 - acquisition of the nicotine pouch product assets of Dryft Sciences, LLC (Dryft) in the U.S. and the acquisition of Eastern Tobacco Company for Trading in Saudi Arabia; |
– |
2021 - entered into a strategic collaboration agreement with Organigram Inc., a wholly-owned subsidiary of publicly-traded Organigram Holdings Inc., as part of which a Group subsidiary acquired a 19.9% equity stake in Organigram Holdings Inc., being a company focused on research and product development activities of next generation adult cannabis products, with an initial focus on cannabidiol; and |
– |
2021 - disposed of BAT Pars Company PJSC, the Group’s Iranian subsidiary. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
As of and for the Year Ended 31 December |
||||||||||||||||||||
All items shown in £m except per share information |
2021 |
2020 |
2019 |
2018 |
2017 |
|||||||||||||||
Income statement data |
||||||||||||||||||||
Revenue 2 |
25,684 |
25,776 |
25,877 |
24,492 |
19,564 |
|||||||||||||||
Raw materials and consumables used |
(4,542 |
) |
(4,583 |
) |
(4,599 |
) |
(4,664 |
) |
(4,520 |
) | ||||||||||
Changes in inventories of finished goods and work in progress |
160 |
445 |
162 |
114 |
(513 |
) | ||||||||||||||
Employee benefit costs |
(2,717 |
) |
(2,744 |
) |
(3,221 |
) |
(3,005 |
) |
(2,679 |
) | ||||||||||
Depreciation, amortisation and impairment costs |
(1,076 |
) |
(1,450 |
) |
(1,512 |
) |
(1,038 |
) |
(902 |
) | ||||||||||
Other operating income |
196 |
188 |
163 |
85 |
144 |
|||||||||||||||
Loss on reclassification from amortised cost to fair value |
(3 |
) |
(3 |
) |
(3 |
) |
(3 |
) |
– |
|||||||||||
Other operating expenses |
(7,468 |
) |
(7,667 |
) |
(7,851 |
) |
(6,668 |
) |
(4,682 |
) | ||||||||||
Profit from operations |
10,234 |
9,962 |
9,016 |
9,313 |
6,412 |
|||||||||||||||
Net finance costs |
(1,486 |
) |
(1,745 |
) |
(1,602 |
) |
(1,381 |
) |
(1,094 |
) | ||||||||||
Share of post-tax results of associates and joint ventures |
415 |
455 |
498 |
419 |
24,209 |
|||||||||||||||
Profit before taxation |
9,163 |
8,672 |
7,912 |
8,351 |
29,527 |
|||||||||||||||
Taxation on ordinary activities |
(2,189 |
) |
(2,108 |
) |
(2,063 |
) |
(2,141 |
) |
8,129 |
|||||||||||
Profit for the year |
(6,974 |
) |
6,564 |
5,849 |
6,210 |
37,656 |
||||||||||||||
Per share data |
||||||||||||||||||||
Basic weighted average number of ordinary shares, in millions |
2,287 |
2,286 |
2,284 |
2,285 |
2,044 |
|||||||||||||||
Diluted weighted average number of ordinary shares, in millions |
2,297 |
2,295 |
2,291 |
2,292 |
2,051 |
|||||||||||||||
Earnings per share-basic (pence) |
296.9p |
280.0p |
249.7p |
264.0p |
1,833.9p |
|||||||||||||||
Earnings per share-diluted (pence) |
295.6p |
278.9p |
249.0p |
263.2p |
1,827.6p |
|||||||||||||||
Dividends per share (pence) 3 |
217.8p |
215.6p |
210.4p |
203.0p |
195.2p |
|||||||||||||||
Dividends per share (US dollars) 3 |
$2.94 |
$2.99 |
$2.69 |
$2.71 |
$2.54 |
|||||||||||||||
Balance sheet data |
||||||||||||||||||||
Assets |
||||||||||||||||||||
Non-current assets |
124,558 |
124,078 |
127,731 |
133,687 |
127,088 |
|||||||||||||||
Current assets |
12,807 |
13,612 |
13,274 |
12,655 |
13,966 |
|||||||||||||||
Total assets |
137,365 |
137,690 |
141,005 |
146,342 |
141,054 |
|||||||||||||||
Liabilities |
||||||||||||||||||||
Non-current liabilities |
54,820 |
59,257 |
58,022 |
64,325 |
64,468 |
|||||||||||||||
Current liabilities |
15,144 |
15,478 |
18,823 |
16,329 |
15,605 |
|||||||||||||||
Total borrowings |
39,658 |
43,968 |
45,366 |
47,509 |
49,450 |
|||||||||||||||
Equity |
||||||||||||||||||||
Share capital |
614 |
614 |
614 |
614 |
614 |
|||||||||||||||
Total equity |
67,401 |
62,955 |
64,160 |
65,688 |
60,981 |
|||||||||||||||
Cash flow data |
||||||||||||||||||||
Net cash generated from operating activities |
9,717 |
9,786 |
8,996 |
10,295 |
5,347 |
|||||||||||||||
Net cash used in investing activities |
(1,140 |
) |
(783 |
) |
(639 |
) |
(1,021 |
) |
(18,544 |
) | ||||||||||
Net cash (used in)/generated from financing activities |
(8,749 |
) |
(7,897 |
) |
(8,593 |
) |
(9,630 |
) |
14,759 |
1. |
All of the information above is in respect of continuing operations, revised for the fully retrospective adoption of IFRS 15. |
2. |
Revenue is net of duty, excise and other taxes of £38,595 million, £39,172 million, £39,826 million, £38,553 million and £37,780 million for the years ended 31 December 2021, 2020, 2019, 2018, and 2017, respectively. |
3. |
In February 2022, the BAT Directors declared an interim dividend of 217.8 pence per share for the year ended 31 December 2021, payable in four equal instalments of 54.45 pence per ordinary share. The interim dividend will be paid to BAT shareholders in May 2022, August 2022, November 2022 and February 2023. The equivalent quarterly dividends receivable by holders of ADSs in US dollars will be calculated based on the exchange rate on the applicable payment date. |
BAT Annual Report and Form 20-F 2021 |
– |
Factory made cigarettes (FMC) – sticks, regardless of weight or dimensions; |
– |
Roll-Your-Own/Make-Your-Own Roll-Your-Own and between 0.5 and 0.7 grams (per stick equivalent) for Make-Your-Own; |
– |
Traditional oral – pouches (being 1:1 conversion to stick equivalent) and kilos, converted to a stick equivalent based upon 2.8 grams (per stick equivalent) for Moist Snuff, 2.0 grams (per stick equivalent) for Dry Snuff and 7.1 grams (per stick equivalent) for other oral; |
– |
Modern Oral – pouches, being 1:1 conversion to stick equivalent; |
– |
Tobacco Heat sticks – sticks, being 1:1 conversion to stick equivalent; and |
– |
Vapour - pods and 10 millilitre bottles. There is no conversion to a stick equivalent. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
For the year ended 31 December (£m) |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenue |
25,684 |
25,776 |
25,877 |
|||||||||
Less: Excise on goods bought-in on short-term arrangements |
– |
– |
(50 |
) | ||||||||
Adjusted revenue |
25,684 |
25,776 |
25,827 |
|||||||||
Impact of translational foreign exchange |
1,877 |
894 |
(144 |
) | ||||||||
2021 adjusted revenue re-translated at 2020 exchange rates |
27,561 |
|||||||||||
2020 adjusted revenue re-translated at 2019 exchange rates |
26,670 |
|||||||||||
2019 adjusted revenue re-translated at 2018 exchange rates |
25,683 |
|||||||||||
Change in adjusted revenue at prior year’s exchange rates (constant rates) |
+6.9% |
+3.3% |
+5.6% |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
|||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||
Reported |
vs 2020 |
items |
Adjusted |
exchange |
at constant |
vs 2020 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
|||||||||||||||||||||||||||||||||
Combustible |
22,029 |
-3.2% |
– |
22,029 |
1,640 |
23,669 |
+4.0% |
22,752 |
– |
22,752 |
||||||||||||||||||||||||||||||||
Vapour |
927 |
+51.8% |
– |
927 |
46 |
973 |
+59.3% |
611 |
– |
611 |
||||||||||||||||||||||||||||||||
THP |
853 |
+34.4% |
– |
853 |
74 |
927 |
+46.1% |
634 |
– |
634 |
||||||||||||||||||||||||||||||||
Modern Oral |
274 |
+38.8% |
– |
274 |
4 |
278 |
+40.6% |
198 |
– |
198 |
||||||||||||||||||||||||||||||||
New Categories |
2,054 |
+42.4% |
– |
2,054 |
124 |
2,178 |
+50.9% |
1,443 |
– |
1,443 |
||||||||||||||||||||||||||||||||
Traditional Oral |
1,118 |
-3.6% |
– |
1,118 |
77 |
1,195 |
+3.0% |
1,160 |
– |
1,160 |
||||||||||||||||||||||||||||||||
Other |
483 |
+14.7% |
– |
483 |
36 |
519 |
+23.1% |
421 |
– |
421 |
||||||||||||||||||||||||||||||||
Revenue |
25,684 |
-0.4% |
– |
25,684 |
1,877 |
27,561 |
+6.9% |
25,776 |
– |
25,776 |
2020 |
2019 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2019 |
items |
Adjusted |
exchange |
at constant |
vs 2019 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
|||||||||||||||||||||||||||||||||||
Combustible |
22,752 |
-1.1% |
– |
22,752 |
842 |
23,594 |
+2.8% |
23,001 |
(50 |
) |
22,951 |
|||||||||||||||||||||||||||||||||
Vapour |
611 |
+52.3% |
– |
611 |
4 |
615 |
+53.4% |
401 |
– |
401 |
||||||||||||||||||||||||||||||||||
THP |
634 |
-12.9% |
– |
634 |
2 |
636 |
-12.7% |
728 |
– |
728 |
||||||||||||||||||||||||||||||||||
Modern Oral |
198 |
+57.1% |
– |
198 |
– |
198 |
+57.1% |
126 |
– |
126 |
||||||||||||||||||||||||||||||||||
New Categories |
1,443 |
+14.9% |
– |
1,443 |
6 |
1,449 |
+15.4% |
1,255 |
– |
1,255 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
1,160 |
+7.2% |
– |
1,160 |
5 |
1,165 |
+7.7% |
1,081 |
– |
1,081 |
||||||||||||||||||||||||||||||||||
Other |
421 |
-21.7% |
– |
421 |
41 |
462 |
-14.4% |
540 |
– |
540 |
||||||||||||||||||||||||||||||||||
Revenue |
25,776 |
-0.4% |
– |
25,776 |
894 |
26,670 |
+3.3% |
25,877 |
(50 |
) |
25,827 |
BAT Annual Report and Form 20-F 2021 |
2021 |
2020 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2020 |
items |
Adjusted |
exchange |
at constant |
vs 2020 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
U.S. |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
10,015 |
+0.9% |
– |
10,015 |
719 |
10,734 |
+8.1% |
9,926 |
– |
9,926 |
||||||||||||||||||||||||||||||||||
Vapour |
561 |
+46.4% |
– |
561 |
40 |
601 |
+56.9% |
383 |
– |
383 |
||||||||||||||||||||||||||||||||||
THP |
1 |
-21.8% |
– |
1 |
– |
1 |
-16.2% |
1 |
– |
1 |
||||||||||||||||||||||||||||||||||
Modern Oral |
2 |
-81.5% |
– |
2 |
– |
2 |
-80.1% |
10 |
– |
10 |
||||||||||||||||||||||||||||||||||
New Categories |
564 |
+43.0% |
– |
564 |
40 |
604 |
+53.3% |
394 |
– |
394 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
1,077 |
-4.3% |
– |
1,077 |
78 |
1,155 |
+2.6% |
1,126 |
– |
1,126 |
||||||||||||||||||||||||||||||||||
Other |
35 |
+26.9% |
– |
35 |
2 |
37 |
+36.0% |
27 |
– |
27 |
||||||||||||||||||||||||||||||||||
Revenue |
11,691 |
+1.9% |
– |
11,691 |
839 |
12,530 |
+9.2% |
11,473 |
– |
11,473 |
2020 |
2019 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Impact of |
Adjusted |
at constant |
Adjusting |
|||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2019 |
items |
Adjusted |
exchange |
at constant |
vs 2019 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
U.S. |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
9,926 |
+9.3% |
– |
9,926 |
54 |
9,980 |
+9.9% |
9,078 |
– |
9,078 |
||||||||||||||||||||||||||||||||||
Vapour |
383 |
+85.1% |
– |
383 |
2 |
385 |
+86.1% |
207 |
– |
207 |
||||||||||||||||||||||||||||||||||
THP |
1 |
+0.0% |
– |
1 |
– |
1 |
+0.5% |
1 |
– |
1 |
||||||||||||||||||||||||||||||||||
Modern Oral |
10 |
+13.5% |
– |
10 |
– |
10 |
+14.1% |
9 |
– |
9 |
||||||||||||||||||||||||||||||||||
New Categories |
394 |
+81.9% |
– |
394 |
2 |
396 |
+82.9% |
217 |
– |
217 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
1,126 |
+7.0% |
– |
1,126 |
5 |
1,131 |
+7.6% |
1,052 |
– |
1,052 |
||||||||||||||||||||||||||||||||||
Other |
27 |
+4.6% |
– |
27 |
2 |
29 |
+5.1% |
26 |
– |
26 |
||||||||||||||||||||||||||||||||||
Revenue |
11,473 |
+10.6% |
– |
11,473 |
63 |
11,536 |
+11.2% |
10,373 |
– |
10,373 |
2021 |
2020 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2020 |
items |
Adjusted |
exchange |
at constant |
vs 2020 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
AMSSA |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
3,435 |
-2.8% |
– |
3,435 |
244 |
3,679 |
+4.1% |
3,535 |
– |
3,535 |
||||||||||||||||||||||||||||||||||
Vapour |
141 |
+115% |
– |
141 |
– |
141 |
+115% |
65 |
– |
65 |
||||||||||||||||||||||||||||||||||
THP |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Modern Oral |
– |
-100% |
– |
– |
– |
– |
-100% |
1 |
– |
1 |
||||||||||||||||||||||||||||||||||
New Categories |
141 |
+114% |
– |
141 |
– |
141 |
+114% |
66 |
– |
66 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Other |
225 |
+32.3% |
– |
225 |
22 |
247 |
+44.7% |
171 |
– |
171 |
||||||||||||||||||||||||||||||||||
Revenue |
3,801 |
+0.8% |
– |
3,801 |
266 |
4,067 |
+7.8% |
3,772 |
– |
3,772 |
2020 |
2019 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Impact of |
Adjusted |
at constant |
Adjusting |
|||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2019 |
items |
Adjusted |
exchange |
at constant |
vs 2019 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
AMSSA |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
3,535 |
-11.4% |
– |
3,535 |
508 |
4,043 |
+1.3% |
3,992 |
– |
3,992 |
||||||||||||||||||||||||||||||||||
Vapour |
65 |
+52.8% |
– |
65 |
3 |
68 |
+58.6% |
43 |
– |
43 |
||||||||||||||||||||||||||||||||||
THP |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Modern Oral |
1 |
-49.8% |
– |
1 |
(1 |
) |
– |
-47.3% |
1 |
– |
1 |
|||||||||||||||||||||||||||||||||
New Categories |
66 |
+51.3% |
– |
66 |
2 |
68 |
+57.1% |
44 |
– |
44 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Other |
171 |
-24.3% |
– |
171 |
39 |
210 |
-7.2% |
225 |
– |
225 |
||||||||||||||||||||||||||||||||||
Revenue |
3,772 |
-11.5% |
– |
3,772 |
549 |
4,321 |
+1.4% |
4,261 |
– |
4,261 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
2021 |
2020 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2020 |
items |
Adjusted |
exchange |
at constant |
vs 2020 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
APME |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
3,555 |
-9.6% |
– |
3,555 |
287 |
3,842 |
-2.3% |
3,935 |
– |
3,935 |
||||||||||||||||||||||||||||||||||
Vapour |
18 |
+26.0% |
– |
18 |
1 |
19 |
+27.5% |
15 |
– |
15 |
||||||||||||||||||||||||||||||||||
THP |
511 |
+2.8% |
– |
511 |
51 |
562 |
+13.0% |
497 |
– |
497 |
||||||||||||||||||||||||||||||||||
Modern Oral |
6 |
+179% |
– |
6 |
1 |
7 |
+199% |
2 |
– |
2 |
||||||||||||||||||||||||||||||||||
New Categories |
535 |
+4.2% |
– |
535 |
53 |
588 |
+14.2% |
514 |
– |
514 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Other |
101 |
+13.0% |
– |
101 |
4 |
105 |
+20.1% |
88 |
– |
88 |
||||||||||||||||||||||||||||||||||
Revenue |
4,191 |
-7.6% |
– |
4,191 |
344 |
4,535 |
0.0% |
4,537 |
– |
4,537 |
2020 |
2019 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2019 |
items |
Adjusted |
exchange |
at constant |
vs 2019 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
APME |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
3,935 |
-10.3% |
– |
3,935 |
113 |
4,048 |
-7.7% |
4,387 |
– |
4,387 |
||||||||||||||||||||||||||||||||||
Vapour |
15 |
+255% |
– |
15 |
– |
15 |
+260% |
4 |
– |
4 |
||||||||||||||||||||||||||||||||||
THP |
497 |
-26.0% |
– |
497 |
(7 |
) |
490 |
-27.1% |
671 |
– |
671 |
|||||||||||||||||||||||||||||||||
Modern Oral |
2 |
n/m |
– |
2 |
– |
2 |
n/m |
– |
– |
– |
||||||||||||||||||||||||||||||||||
New Categories |
514 |
-24.0% |
– |
514 |
(7 |
) |
507 |
-25.0% |
675 |
– |
675 |
|||||||||||||||||||||||||||||||||
Traditional Oral |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Other |
88 |
-1.3% |
– |
88 |
1 |
89 |
-0.4% |
91 |
– |
91 |
||||||||||||||||||||||||||||||||||
Revenue |
4,537 |
-11.9% |
– |
4,537 |
107 |
4,644 |
-9.9% |
5,153 |
– |
5,153 |
2021 |
2020 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2020 |
items |
Adjusted |
exchange |
at constant |
vs 2020 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
ENA |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
5,024 |
-6.2% |
– |
5,024 |
390 |
5,414 |
+1.1% |
5,356 |
– |
5,356 |
||||||||||||||||||||||||||||||||||
Vapour |
207 |
+40.2% |
– |
207 |
5 |
212 |
+43.8% |
148 |
– |
148 |
||||||||||||||||||||||||||||||||||
THP |
341 |
+150% |
– |
341 |
23 |
364 |
+167% |
136 |
– |
136 |
||||||||||||||||||||||||||||||||||
Modern Oral |
266 |
+43.9% |
– |
266 |
3 |
269 |
+45.6% |
185 |
– |
185 |
||||||||||||||||||||||||||||||||||
New Categories |
814 |
+73.6% |
– |
814 |
31 |
845 |
+80.3% |
469 |
– |
469 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
41 |
+18.2% |
– |
41 |
(1 |
) |
40 |
+18.1% |
34 |
– |
34 |
|||||||||||||||||||||||||||||||||
Other |
122 |
-8.9% |
– |
122 |
8 |
130 |
-4.9% |
135 |
– |
135 |
||||||||||||||||||||||||||||||||||
Revenue |
6,001 |
+0.1% |
– |
6,001 |
428 |
6,429 |
+7.3% |
5,994 |
– |
5,994 |
2020 |
2019 |
|||||||||||||||||||||||||||||||||||||||||||
Adjusted |
||||||||||||||||||||||||||||||||||||||||||||
Adjusting |
Impact of |
Adjusted |
at constant |
Adjusting |
||||||||||||||||||||||||||||||||||||||||
Reported |
vs 2019 |
items |
Adjusted |
exchange |
at constant |
vs 2019 |
Reported |
items |
Adjusted |
|||||||||||||||||||||||||||||||||||
ENA |
£m |
% |
£m |
£m |
£m |
£m |
% |
£m |
£m |
£m |
||||||||||||||||||||||||||||||||||
Combustible |
5,356 |
-3.4% |
– |
5,356 |
167 |
5,523 |
+0.5% |
5,544 |
(50 |
) |
5,494 |
|||||||||||||||||||||||||||||||||
Vapour |
148 |
+0.4% |
– |
148 |
(1 |
) |
147 |
+0.2% |
147 |
– |
147 |
|||||||||||||||||||||||||||||||||
THP |
136 |
+143% |
– |
136 |
9 |
145 |
+159% |
56 |
– |
56 |
||||||||||||||||||||||||||||||||||
Modern Oral |
185 |
+58.5% |
– |
185 |
1 |
186 |
+59.3% |
116 |
– |
116 |
||||||||||||||||||||||||||||||||||
New Categories |
469 |
+46.7% |
– |
469 |
9 |
478 |
+49.6% |
319 |
– |
319 |
||||||||||||||||||||||||||||||||||
Traditional Oral |
34 |
+16.2% |
– |
34 |
– |
34 |
+14.2% |
29 |
– |
29 |
||||||||||||||||||||||||||||||||||
Other |
135 |
-31.6% |
– |
135 |
(1 |
) |
134 |
-31.7% |
198 |
– |
198 |
|||||||||||||||||||||||||||||||||
Revenue |
5,994 |
-1.6% |
– |
5,994 |
175 |
6,169 |
+2.1% |
6,090 |
(50 |
) |
6,040 |
BAT Annual Report and Form 20-F 2021 |
For the year ended 31 December (£m) |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Profit from operations |
10,234 |
9,962 |
9,016 |
|||||||||
Add: |
||||||||||||
Restructuring and integration costs |
150 |
408 |
565 |
|||||||||
Amortisation and impairment of trademarks and similar intangibles |
306 |
339 |
481 |
|||||||||
Impairment of goodwill |
57 |
209 |
194 |
|||||||||
(Income)/charge in respect of an excise tax dispute in Russia |
– |
(40 |
) |
202 |
||||||||
Charge in respect of Canada class action |
– |
– |
436 |
|||||||||
Charge in respect of MSA liabilities related to brands sold to a third party |
– |
400 |
– |
|||||||||
Credit in respect of the partial buy-out of the pension fund in the U.S. |
(35 |
) |
– |
– |
||||||||
Charge in respect of the sale of the Group’s operations in Iran |
358 |
– |
– |
|||||||||
Other, including litigation |
80 |
87 |
236 |
|||||||||
Adjusted profit from operations |
11,150 |
11,365 |
11,130 |
|||||||||
Operating margin |
39.8% |
38.6% |
34.8% |
|||||||||
Adjusted operating margin* |
43.4% |
44.1% |
43.1% |
|||||||||
Impact of translational foreign exchange |
802 |
296 |
(98 |
) | ||||||||
2021 adjusted profit from operations re-translated at 2020 exchange rates |
11,952 |
|||||||||||
2020 adjusted profit from operations re-translated at 2019 exchange rates |
11,661 |
|||||||||||
2019 adjusted profit from operations re-translated at 2018 exchange rates |
11,032 |
|||||||||||
Change in adjusted profit from operations at prior year’s exchange rates (constant rates) |
+5.2% |
+4.8% |
+6.6% |
* |
Adjusted profit from operations as a percentage of adjusted revenue. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
For the year ended 31 December (£m) |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Group’s share of post-tax results of associates and joint ventures |
415 |
455 |
498 |
|||||||||
Issue of shares and changes in shareholding |
(6 |
) |
(17 |
) |
(25 |
) | ||||||
Impairment of the Group’s associate in Yemen |
18 |
– |
– |
|||||||||
Other |
– |
4 |
– |
|||||||||
Adjusted Group’s share of post-tax results of associates and joint ventures |
427 |
442 |
473 |
For the year ended 31 December (£m) |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Profit before taxation |
9,163 |
8,672 |
7,912 |
|||||||||
Less: Share of post-tax results of associates and joint ventures |
(415 |
) |
(455 |
) |
(498 |
) | ||||||
Adjusting items within profit from operations |
916 |
1,403 |
2,114 |
|||||||||
Adjusting items within finance costs |
55 |
153 |
80 |
|||||||||
Adjusted profit before taxation, excluding associates and joint ventures |
9,719 |
9,773 |
9,608 |
|||||||||
Taxation on ordinary activities |
(2,189 |
) |
(2,108 |
) |
(2,063 |
) | ||||||
Adjusting items in taxation |
(91 |
) |
(35 |
) |
(65 |
) | ||||||
Taxation on adjusting items |
(119 |
) |
(287 |
) |
(373 |
) | ||||||
Adjusted taxation |
(2,399 |
) |
(2,430 |
) |
(2,501 |
) | ||||||
Effective tax rate |
23.9% |
24.3% |
26.1% |
|||||||||
Underlying tax rate |
24.7% |
24.9% |
26.0% |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
As of 31 December |
||||||||||||
Region (number of employees worldwide) |
2021 |
2020 |
2019 |
|||||||||
U.S. |
4,405 |
4,921 |
5,020 |
|||||||||
APME |
9,747 |
10,750 |
13,465 |
|||||||||
AmSSA |
15,565 |
15,873 |
16,862 |
|||||||||
ENA 1 |
22,333 |
23,785 |
24,642 |
|||||||||
Total employees |
52,050 |
55,329 |
59,989 |
1. |
Included within the employee numbers for ENA are certain employees in different locations in respect of central functions. Some of the costs of these employees are allocated or charged to the various regions and markets in the Group. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
As of 31 December (£m) 1 |
||||||||||||||||||
Currency |
Maturity dates |
Interest rates at 31 December 2021 |
2021 |
2020 |
2019 |
|||||||||||||
Eurobonds 2 |
Euro |
2022 to 2045 |
0.9% to 3.1% |
7,316 |
8,875 |
7,591 |
||||||||||||
Euro |
2021 |
3m EURIBOR +50bps |
– |
984 |
931 |
|||||||||||||
UK pound sterling |
2022 to 2055 |
2.1% to 7.3% |
4,086 |
4,590 |
4,161 |
|||||||||||||
Swiss franc |
2026 |
1.4% |
203 |
540 |
510 |
|||||||||||||
Bonds issued pursuant to rules under the |
||||||||||||||||||
U.S. Securities Act (as amended) 2 |
US dollar |
2022 to 2050 |
1.7% to 8.1% |
25,625 |
25,461 |
23,805 |
||||||||||||
US dollar |
2022 |
USD 3m LIBOR + 88bps |
554 |
548 |
1,325 |
|||||||||||||
Commercial Paper 2 |
269 |
– |
1,056 |
|||||||||||||||
Other loans |
500 |
1,929 |
4,624 |
|||||||||||||||
Bank loans |
313 |
317 |
293 |
|||||||||||||||
Bank overdrafts |
346 |
249 |
491 |
|||||||||||||||
Finance leases |
446 |
475 |
579 |
|||||||||||||||
Total |
39,658 |
43,968 |
45,366 |
1. |
The financial data above has been extracted from the Group’s consolidated financial statements. |
2. |
The issuers of these debt securities are B.A.T. International Finance p.l.c., B.A.T Capital Corporation, Reynolds American Inc., or R.J. Reynolds Tobacco Company, as applicable. British American Tobacco p.l.c. is the ultimate guarantor in each case. |
BAT Annual Report and Form 20-F 2021 |
Payments due by period (£m) |
||||||||||||||||||||
Total |
Less than 1 Year |
1–3 Years |
3–5 Years |
Thereafter |
||||||||||||||||
Long-term notes and other borrowings, exclusive of interest 1 |
38,752 |
3,406 |
6,178 |
6,742 |
22,426 |
|||||||||||||||
Interest payments related to long-term notes 1 |
460 |
460 |
– |
– |
– |
|||||||||||||||
Lease liabilities |
446 |
126 |
159 |
87 |
74 |
|||||||||||||||
Purchase obligations 2 |
1,160 |
943 |
207 |
10 |
– |
|||||||||||||||
Total cash obligations |
40,818 |
4,935 |
6,544 |
6,839 |
22,500 |
1. |
For more information about the Group’s long-term debt, see note 23 in the Notes on the Accounts. |
2. |
Purchase obligations primarily include commitments to acquire tobacco leaf. Purchase orders for the purchase of other raw materials and other goods and services are not included in the table, as the Group’s operating subsidiaries are not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders typically represent authorisations to purchase rather than binding agreements. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
Competition from illicit trade. |
– |
Geopolitical tensions that have the potential to disrupt the Group’s business in multiple markets. |
– |
Disruption to the Group’s data and information technology systems, including by cyber attack or the malicious manipulation or disclosure of confidential or sensitive information. |
– |
Failure to meet current or future New Categories demand. |
– |
Failure of a financial counterparty. |
– |
Exposure to unavailability of, and price volatility, in raw materials and increased costs of employment. |
– |
Failure to retain key personnel or to attract and retain skilled talent. |
– |
Disruption to the supply chain and distribution channels. |
– |
Failure to deliver digital innovation and drive digital transformation. |
– |
Exposure to product contamination. |
– |
Inability to obtain adequate supplies of tobacco leaf. |
– |
Failure to successfully design, implement and sustain an integrated operating model. |
– |
Failure to uphold the high standard of ESG management. |
– |
Failure to manage the Group’s climate change risk. |
– |
Impact of a pandemic on the performance of the Group. |
– |
Exposure to, the enactment of, proposals for, or rumours of regulation that significantly impairs the Group’s ability to communicate, differentiate, market or launch its products and/or the lack of appropriate regulation for New Categories. |
– |
Adverse implications of proposed EU legislation on single-use plastics that will result in on-pack environmental warnings and financial implications relating to the Extended Producer Responsibility (EPR). |
– |
Exposure to litigation on tobacco, nicotine, New Categories and other issues. |
– |
Significant and/or unexpected increases or structural changes in tobacco and nicotine-related taxes. |
– |
Failure to comply with health and safety and environmental laws. |
– |
Exposure to unfavourable tax rulings. |
– |
Unexpected legislative changes to corporate income tax laws. |
– |
Exposure to potential liability under competition or antitrust laws. |
– |
Failure to establish and maintain adequate controls and procedures to comply with applicable securities, corporate governance and compliance regulations. |
– |
Loss of confidential information, including through manipulation of data by employees and system failure. |
– |
Failure to comply with product regulations due to uncertainty surrounding the proper interpretation and application of those regulations. |
– |
Failure to uphold high standards of corporate behaviour, including through unintended or malicious breach of anti-bribery and anti-corruption and other anti-financial crime laws. |
– |
Imposition of sanctions under sanctions regimes or similar international, regional or national measures. |
– |
Loss or misuse of personal data through a failure to comply with the European General Data Protection Regulation, the UK Data Protection Act 2018, e-Privacy laws and other privacy legislation governing the processing of personal data. |
– |
Failure to uphold New Categories marketing practices. |
– |
Foreign exchange rate exposures. |
– |
Inability to obtain price increases and exposure to risks from excessive price increases and value chain erosion. |
– |
Effects of declining consumption of legitimate tobacco products and a tough competitive environment. |
– |
Funding, liquidity and interest rate risks. |
– |
Failure to achieve growth through mergers, acquisitions and joint ventures. |
– |
Unforeseen underperformance in key global markets. |
– |
Increases in net liabilities under the Group’s retirement benefit schemes. |
– |
Inability to predict consumers’ changing behaviours and launch innovative products that offer adult tobacco and nicotine consumers meaningful value-added differentiation. |
– |
Exposure to risks associated with intellectual property rights, including the failure to identify, protect and prevent infringement of the Group’s intellectual property rights and potential infringement of, or the failure to retain licences to use, third-party intellectual property rights. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
the ability to leverage our data assets to generate insights and foresights as a key driver of revenue growth; |
– |
the expansion and flexibility of technology solutions to streamline the market realisation of new products and marketing campaigns; and |
– |
the ability to build new solutions and the flexibility to react to market disruptions. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
– |
Reductions or volatility in consumer demand for one or more of our products due to illness, retail closures, quarantine or other travel restrictions, health consciousness (quitting use of tobacco and nicotine products), government restrictions, the deterioration of socio-economic conditions, economic hardship and customer-downtrading (switching to a cheaper brand), which may impact the Group’s market share. |
– |
Disruptions to the Group’s operations, such as its supply chain, or manufacturing or distribution capabilities, which may result in increased costs due to the need for more complex supply chain arrangements, to expand existing facilities or to maintain inefficient facilities, a reduction of the Group’s sales volumes or an increase in bad debts from customers. |
– |
Disruption to the Group’s operations resulting from a significant number of the Group’s employees, including employees performing key functions, working remotely for extended periods of time or becoming ill, which may reduce the employees’ efficiency and productivity and cause product development delays, hamper new product innovation and have other adverse effects on the Group’s business. |
– |
Significant volatility in financial markets (including exchange rate volatility) and measures adopted by governments and central banks that further restrict liquidity, which may limit the Group’s access to funds, lead to shortages of cash and cash equivalents needed to operate the Group’s business, and impact the Group’s ability to refinance its existing debt. |
– |
Regulations restricting the ability to manufacture, distribute, market and sell products, and potentially increasing illicit trade. |
– |
Governments seeking to increase revenues through increased corporate taxes and excise in combustible and/or New Category products, increasing the cost and prices of our products – which could reduce volumes and margins, and/or increase illicit trade. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
Category Bans: including regulations that ban the sale, import, possession, or use of certain product categories, entirely (e.g. New Categories); |
– |
Place: including regulations restricting consumption in private and public spaces (e.g. public place smoking or vaping bans, including restaurants and bars); |
– |
Product: including regulations on the use of or testing for ingredients, product design and attributes (e.g. tar/ nicotine / carbon monoxide ceilings) flavours bans (including menthol); product safety (e.g. reduced cigarette ignition propensity standards); product disclosure (e.g. ingredients and emissions) and environmental impact (e.g. Extended Producer Responsibility (EPR) requirements for cigarette filters); |
– |
Packaging and labelling: including regulations on health warnings and other government-mandated messages; restrictions on the use of certain descriptors and brand names; requirements on pack shape, size, weight and colour; and mandatory plain packaging; |
– |
Advertising, promotion and sponsorship: including partial or total bans on advertising, promotions and sponsorship, and online and direct engagement communication; |
– |
Purchase: including regulations on where the products are sold, such as type of outlet (e.g. supermarkets and vending machines), radius or distance restrictions (e.g. 300 meters from a school), online sales bans, regulation regarding how they are sold and displayed (e.g. above the counter or under the counter) and minimum purchase age and increases thereto; and |
– |
Price: including regulations that have implications on prices and margins (e.g. excise taxes, minimum prices and import/export duties). |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
– |
banning categories of tobacco products; and |
– |
requiring the reduction of nicotine yields of a tobacco product to zero. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
the likelihood that existing users of tobacco products will stop using cigarettes; |
– |
the likelihood that those who do not use tobacco products will start using such products; and |
– |
the illicit trade of cigarettes containing nicotine at levels higher than a non-addictive nicotine threshold. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Nature of agreement |
Key provisions | |
The revolving credit facilities agreement, effective 12 March 2020, entered into between the Company, B.A.T. International Finance p.l.c., B.A.T. Netherlands Finance B.V. and B.A.T Capital Corporation (as borrowers and, in the case of the Company, as a guarantor) and HSBC Bank plc (as agent) and certain financial institutions (as lenders), pursuant to which the lenders agreed to make available to the borrowers £5.85 billion for general corporate purposes (the Facility). |
– should a borrower (other than the Company) cease to be a direct or indirect subsidiary of the Company, such borrower shall immediately repay any outstanding advances made to it and shall cease to be a borrower under the Facility; and – where there is a change of control in respect of the Company, the lenders can require all amounts outstanding under the Facility to be repaid. | |
In March and December 2021, the Group extended short-term bilateral facilities with core relationship banks for a total amount of £2.5 billion. B.A.T. International Finance p.l.c. is the borrower under these facilities and the Company as the guarantor. As at 31 December 2021, £500 million was drawn on a short-term basis. |
– should the borrower cease to be a direct or indirect subsidiary of the Company, the borrower shall immediately repay any outstanding advances made to it under these facilities; and – where there is a change of control in respect of the Company, the lenders can require all amounts outstanding under these facilities to be repaid. | |
Packaging Materials Agreement dated 8 April 2015, between Souza Cruz S.A. and Amcor Group GmbH for the production and supply of packaging for a value of R$1.5 billion. |
– either party may terminate the agreement in the event of any direct or indirect acquisition of at least 25% of the voting shares of the supplier and/or its affiliates by directly or indirectly a competitor of Souza Cruz S.A., importer or distributor. | |
Global Framework Agreement dated 1 January 2014, between British American Tobacco (Investments) Limited and Papierfabrik Wattens GmbH & Co for the supply of direct materials, cigarette and plug-wrap paper. |
– Either party may terminate the agreement in the event of a change of control of the other party (or certain of its affiliated companies) in specified circumstances and which, in relation to British American Tobacco (Investments) Limited, would trigger a right for the other party to terminate the agreement on a change of control of British American Tobacco (Investments) Limited (or any holding company), where the new controlling entity is a customer or competitor of the other party. | |
On 25 July 2017, the Company acceded as a guarantor under the indenture of its indirect, wholly-owned subsidiary Reynolds American Inc. The securities issued under the indenture include approximately US$7.7 billion aggregate principal amount of unsecured Reynolds American Inc debt securities. |
– with respect to each series of debt securities issued under the indenture, upon a change of control event, combined with a credit ratings downgrade of the series to below investment-grade level (such downgrade occurring on any date from the date of the public notice of an arrangement that could result in a change of control event until the end of the 60-day period following public notice of the occurrence of a change of control event), Reynolds American Inc. is obligated to make an offer to repurchase all debt securities from each holder of debt securities. As a guarantor under the indenture, the Company guarantees such payments. | |
Rules of the long-term incentive plans 2007 and 2016 (“LTIPs”). |
– in the event of a change of control of the Company as a result of a takeover, reconstruction or winding-up of the Company (not being an internal reorganisation), LTIP awards will become exercisable for a limited period based on the period of time that has elapsed since the date of the award and the achievement of the performance conditions at that date, unless the Remuneration Committee determines this not to be appropriate in the circumstances; and – the rules of the LTIPs allow (as an alternative to early release) that participants may, if permitted, exchange their LTIP awards for new awards of shares in the acquiring company on a comparable basis. |
BAT Annual Report and Form 20-F 2021 |
United States |
APME |
AmSSA |
ENA |
Total |
||||||||||||||||
Fully integrated cigarette manufacturing |
2 |
14 |
15 |
11 |
42 |
|||||||||||||||
Sites processing tobacco only |
1 |
6 |
9 |
2 |
18 |
|||||||||||||||
Site manufacturing other tobacco products, Snus, Modern Oral and Liquids |
3 |
– |
– |
5 |
8 |
|||||||||||||||
R&D facilities and Product Centres |
1 |
1 |
3 |
2 |
7 |
|||||||||||||||
Total |
7 |
21 |
27 |
20 |
75 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Section 414C(11) of the Companies Act 2006 allows the Board to include in the Strategic Report information that it considers to be of strategic importance that would otherwise need to be disclosed in the Directors’ Report. The Board has chosen to take advantage of this provision and accordingly, the information set out below, which would otherwise be required to be contained in the Directors’ Report, has been included in the Strategic Report. | ||
Information required in the Directors’ Report |
Section in the Strategic Report | |
Information on dividends |
Financial review | |
Certain risk information about the use of financial instruments |
Financial review | |
An indication of likely future developments in the business of the Group |
A strategy for accelerated growth | |
An indication of the activities of the Group in the field of research and development |
Accelerating the Enterprise of the Future | |
Tobacco Harm Reduction Through World-class Science | ||
A statement describing the Group’s policy regarding the hiring, continuing employment and training, career development and promotion of disabled persons |
People and Culture | |
Details of employee engagement: information, consultation, regard to employee interests, share scheme participation and the achievement of a common awareness of the financial and economic factors affecting the performance of the Group |
Engaging with our stakeholders People and Culture Principles of Remuneration for Our Wider Workforce | |
Details of business relationships: Directors’ regard to business relationships with customers, suppliers and other external stakeholders |
Engaging with our stakeholders | |
Disclosures concerning greenhouse gas emissions and energy consumption |
Excellence in Environmental Management | |
Shareholder Information Disclosures |
||
Information required in the Directors’ Report |
Section in Other Information | |
Change of control provisions |
Material contracts | |
Information on dividends |
Dividends | |
Share capital – structure and voting rights; restrictions on transfers of shares |
Articles of Association | |
Directors – appointment and retirement |
Articles of Association | |
Amendment of Articles of Association |
Articles of Association | |
Branch outside of the UK - Representative Office in South Africa |
Inside page of the back cover | |
Major shareholders |
Share capital and security ownership | |
Directors – share issuance and buy-back powers |
Share capital and security ownership | |
Purchases of shares | ||
Listing Rules (LRs) Disclosures |
||
For the purpose of LR 9.8.4C R the applicable information required to be disclosed by LR 9.8.4 R |
Section in Other Information | |
Section (12) – shareholder waivers of dividends |
Group Employee Trust | |
Section (13) – shareholder waivers of future dividends |
Group Employee Trust |
Directors: Interests and Indemnities | ||
Interests |
– details of Directors’ remuneration and emoluments, and their interests in the Company’s shares (including share options and deferred shares) as at 31 December 2021 are given in the Remuneration Report; and – no Director had any material interest in a contract of significance (other than a service contract) with the Company or any subsidiary company during the year. | |
Insurance |
– appropriate cover provided in the event of legal action against the Company’s Directors. | |
Indemnities |
– provision of indemnities to Directors in accordance with the Company’s Articles of Association and to the maximum extent permitted by law; and – as at the date of this report, such indemnities are in force covering any costs, charges, expenses or liabilities that they may incur in or about the execution of their duties to the Company or to any entity which is an associated company (as defined in Section 256 of the Companies Act 2006), or as a result of duties performed by them on behalf of the Company or any such associated company. |
Directors’ Report Approval and Signature |
The Directors’ Report comprises the information on pages 98 to 127 and pages 299 to 379. The Directors’ Report was approved by the Board of Directors on 10 February 2022 and signed on its behalf by Paul McCrory, Company Secretary. |
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
High |
Low |
|||||||
LSE |
£29.14 |
£24.85 |
||||||
JSE |
R590.95 |
R513.00 |
||||||
NYSE |
US$40.51 |
US$33.65 |
BAT Annual Report and Form 20-F 2021 |
Announcement Year |
Payment |
Dividend Period |
Dividend Per BAT Ordinary Share GBP |
Dividend Per BAT ADS ADS ratio 1:1 USD 1 |
||||||||
2019 |
May |
Quarterly Interim 2019 |
0.5075 |
0.6596990 |
||||||||
August |
Quarterly Interim 2019 |
0.5075 |
0.6155970 |
|||||||||
November |
Quarterly Interim 2019 |
0.5075 |
0.6521370 |
|||||||||
February 2020 |
Quarterly Interim 2019 |
0.5075 |
0.6571610 |
|||||||||
Total |
2.0300 |
2.5845940 |
||||||||||
2020 |
May |
Quarterly Interim 2020 |
0.526 |
0.6424030 |
||||||||
August |
Quarterly Interim 2020 |
0.526 |
0.6889020 |
|||||||||
November |
Quarterly Interim 2020 |
0.526 |
0.6895860 |
|||||||||
February 2021 |
Quarterly Interim 2020 |
0.526 |
0.7178320 |
|||||||||
Total |
2.104 |
2.738723 |
||||||||||
2021 |
May |
Quarterly Interim 2021 |
0.539 |
0.7576180 |
||||||||
August |
Quarterly Interim 2021 |
0.539 |
0.7345300 |
|||||||||
November |
Quarterly Interim 2021 |
0.539 |
0.7217210 |
|||||||||
February 2022 |
Quarterly Interim 2021 |
0.539 |
0.7298860 |
|||||||||
Total |
2.156 |
2.943755 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Key dates In compliance with the requirements of the LSE, the NYSE and Strate, the electronic settlement and custody system used by the JSE, the following are the salient dates for the quarterly dividend payments. All dates are 2022 unless otherwise stated. |
Event |
Payment No. 1 |
Payment No. 2 |
Payment No. 3 |
Payment No. 4 | ||||
Preliminary announcement (includes declaration data required for JSE purposes) |
11 February |
|||||||
Publication of finalisation information (JSE) |
14 March |
28 June |
20 September |
12 December | ||||
No removal requests (in either direction) permitted between the UK main register and the South Africa branch register |
14 March– 28 March (inclusive) |
28 June– 11 July (inclusive) |
20 September– 3 October (inclusive) |
12 December– 27 December (inclusive) | ||||
Last day to trade (LDT) cum-dividend (JSE) |
22 March |
5 July |
27 September |
20 December | ||||
Shares commence trading ex-dividend (JSE) |
23 March |
6 July |
28 September |
21 December | ||||
No transfers permitted between the UK main register and the South Africa branch register |
23 March– 28 March (inclusive) |
6 July– 11 July (inclusive) |
28 September – 3 October (inclusive) |
21 December– 27 December (inclusive) | ||||
No shares to be dematerialised or rematerialised on the South Africa branch register |
23 March– 28 March (inclusive) |
6 July– 11 July (inclusive) |
28 September– 3 October (inclusive) |
21 December– 27 December (inclusive) | ||||
Shares commence trading ex-dividend (LSE) |
24 March |
7 July |
29 September |
22 December | ||||
Shares commence trading ex-dividend (NYSE) |
24 March |
7 July |
29 September |
22 December | ||||
Record date (LSE, JSE and NYSE) |
25 March |
8 July |
30 September |
23 December | ||||
Last date for receipt of Dividend Reinvestment Plan (DRIP) elections (LSE) |
8 April |
27 July |
20 October |
12 January 2023 | ||||
Payment date (LSE and JSE) |
4 May |
17 August |
10 November |
2 February 2023 | ||||
ADS payment date (NYSE) |
9 May |
22 August |
15 November |
6 February 2023 |
BAT Annual Report and Form 20-F 2021 |
– |
a bank or other financial institution; |
– |
a tax-exempt organisation; |
– |
an S corporation or other pass-through entity and an investor therein; |
– |
an insurance company; |
– |
a mutual fund; |
– |
a regulated investment company or real estate investment trust; |
– |
a dealer or broker in stocks and securities, or currencies; |
– |
a trader in securities that elects mark-to-market treatment; |
– |
a US holder subject to the alternative minimum tax provisions of the US Tax Code; |
– |
a US holder that received ordinary shares or ADSs through the exercise of an employee stock option, pursuant to a tax qualified retirement plan or otherwise as compensation; |
– |
a US holder that is a tax-qualified retirement plan or a participant or a beneficiary under such a plan; |
– |
a person that is not a US holder (as defined below); |
– |
a person that has a functional currency other than the US dollar; |
– |
a person required to recognise any item of gross income as a result of such income being recognised on an applicable financial statement; |
– |
a US holder of ordinary shares or ADSs that holds such equity interest as part of a hedge, straddle, constructive sale, conversion or other integrated transaction; |
– |
a US holder that owns (directly, indirectly or constructively) 10% or more of ordinary shares or ADSs by vote or by value; or |
– |
a US expatriate. |
– |
is for US federal income tax purposes: (i) an individual citizen or resident of the United States; (ii) a corporation, including any entity treated as a corporation for US federal income tax purposes, created or organised in or under the laws of the United States, any state thereof or the District of Columbia; (iii) a trust if a US court is able to exercise primary supervision over the trust’s administration and one or more US persons are authorised to control all substantial decisions of the trust or it has a valid election in effect under applicable Treasury regulations to be treated as a US person; or (iv) an estate that is subject to US federal income tax on its income regardless of its source; and |
– |
is not resident in the UK for UK tax purposes. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
Share capital |
||||
Ordinary shares of 25p each |
31 December 2021 |
|||
Issued ordinary shares |
||||
(excluding treasury shares) |
2,294,687,571 |
|||
Treasury shares |
161,930,217 |
|||
Total allotted and fully paid ordinary shares 1 |
2,456,617,788 |
|||
Aggregate nominal value £m |
614.2 |
Register |
Total number of shares |
Number of holders |
% of issued share capital | |||
UK |
2,201,910,356 |
35,134 |
89.63 | |||
South Africa |
254,707,432 |
69,124 |
10.37 | |||
Total |
2,456,617,788 |
104,258 |
100.00 |
Number of holders |
% of UK ordinary share capital |
|||||||
1–1,999 |
30,072 |
0.58 |
||||||
2,000–9,999 |
3,650 |
0.63 |
||||||
10,000–199,999 |
1,011 |
2.38 |
||||||
200,000–499,999 |
138 |
2.04 |
||||||
500,000 and over |
262 |
87.01 |
||||||
Treasury shares (UK) |
1 |
7.36 |
||||||
Total |
35,134 |
100.00 |
Number of holders |
% of SA ordinary share capital |
|||||||
1–1,999 |
63,837 |
6.44 |
||||||
2,000–9,999 |
3,557 |
5.69 |
||||||
10,000–199,999 |
1,592 |
25.43 |
||||||
200,000–499,999 |
78 |
9.89 |
||||||
500,000 and over |
60 |
52.55 |
||||||
Total |
69,124 |
100.00 |
Combined registers |
||||||||
Number of holders |
% of issued ordinary share capital |
|||||||
1–1,999 |
93,909 |
1.19 |
||||||
2,000–9,999 |
7,207 |
1.15 |
||||||
10,000–199,999 |
2,603 |
4.77 |
||||||
200,000–499,999 |
216 |
2.85 |
||||||
500,000 and over |
322 |
83.43 |
||||||
Treasury shares (UK) |
1 |
6.61 |
||||||
Total |
104,258 |
100.00 |
Number of holders |
% of total ADSs |
|||||||
1–1,999 |
8,721 |
0.69 |
||||||
2,000–9,999 |
166 |
0.22 |
||||||
10,000–199,999 |
20 |
0.16 |
||||||
200,000–499,999 |
1 |
0.09 |
||||||
500,000 and over 1 |
1 |
98.84 |
||||||
Total |
8,909 |
100.00 |
At 31 December 2021, the following substantial interests (3% or more) in the Company’s ordinary share capital (voting securities) had been notified to the Company in accordance with Section 5.1.2 of the Disclosure Guidance and Transparency Rules (DTRs). |
| |||||||
Name |
Number of ordinary shares |
% of issued share capital 1 |
||||||
The Capital Group Companies, Inc. 2 |
251,653,679 |
10.96 |
||||||
Spring Mountain Investments Ltd. 3 |
187,023,731 |
8.15 |
||||||
BlackRock, Inc. |
132,891,526 |
5.79 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
BAT Annual Report and Form 20-F 2021 |
Number of Ordinary Shares |
Percentage of Class 10 |
|||||||
Directors |
||||||||
Luc Jobin 1 |
90,236 |
0.0039 |
||||||
Jack Bowles 2,3 |
239,214 |
0.0104 |
||||||
Tadeu Marroco 2,3,4 |
78,136 |
0.0034 |
||||||
Sue Farr |
– |
– |
||||||
Karen Guerra |
5,000 |
0.0002 |
||||||
Dr Marion Helmes |
4,500 |
0.0002 |
||||||
Holly Keller Koeppel 5 |
– |
– |
||||||
Savio Kwan |
8,238 |
0.0004 |
||||||
Dimitri Panayotopoulos |
3,300 |
0.0001 |
||||||
Darrell Thomas 1 |
2,600 |
0.0001 |
||||||
Management Board |
||||||||
Jerome Abelman 6,7,8 |
102,664 |
0.0045 |
||||||
Marina Bellini 6 |
2,551 |
0.0001 |
||||||
Luciano Comin 6,7,8 |
30,523 |
0.0013 |
||||||
Michael Dijanosic 6,7,8 |
28,876 |
0.0013 |
||||||
Zafar Khan 6,7,8 |
415 |
0.0000 |
||||||
Hae In Kim 6,7,8] |
18,294 |
0.0008 |
||||||
Paul Lageweg 6,7,8,9 |
150,447 |
0.0066 |
||||||
Guy Meldrum 6,7,8 |
25,299 |
0.0011 |
||||||
David O’Reilly 6,7,8 |
77,822 |
0.0034 |
||||||
Johan Vandermeulen 6,7,8 |
77,506 |
0.0034 |
||||||
Kingsley Wheaton 6,7,8 |
61,992 |
0.0027 |
||||||
All Directors and Management Board as a group (21 persons) |
1,007,613 |
0.0260 |
1. |
The ordinary shares beneficially owned by Mr Jobin and Mr Thomas are represented by ADSs, each of which represents one ordinary share. |
2. |
The number of ordinary shares beneficially owned by the Executive Directors include ordinary shares awarded and required to be held for a period of at least three years in a UK-based trust under the SIP. Ordinary shares cannot be sold or transferred out of the trust until the end of the three-year holding period. The amounts next to the corresponding Executive Director include the following ordinary shares held in the trust under the SIP: (a) 822 ordinary shares for Mr Bowles, of which 451 have been held for less than three years; (b) 1,347 ordinary shares for Mr Marroco, of which 529 have been held for less than three years. In all cases, the beneficial owner of ordinary shares under the SIP may direct the trust to exercise its voting rights in accordance with his instructions. See footnote (5) to the table below under the heading ‘Outstanding Share-based Awards and Options-based Awards of the Board of Directors and the Management Board’ for additional details regarding the SIP and the ordinary shares held thereunder. |
3. |
The number of ordinary shares beneficially owned by the Executive Directors include the following number of awards of restricted ordinary shares granted under the DSBS that are scheduled to vest within 60 days of 9 February 2022: (a) 26,192 ordinary shares for Mr Bowles; (b) 13,233 ordinary shares for Mr Marroco. Until awards of ordinary shares under the DSBS vest, they are held in trust and the recipient of such award does not have the ability to transfer, sell or direct the voting of the applicable ordinary shares. See footnote (4) to the table below under the heading ‘Outstanding Share-based Awards and Options-based Awards of the Board of Directors and the Management Board’ for additional details regarding the DSBS. |
4. |
The number of ordinary shares beneficially owned by Mr Marroco includes 36,057 options granted under the LTIP that are scheduled to vest and may be exercised within 60 days of 9 February 2022. Each option is convertible into one ordinary share upon exercise. See footnote (1) to the table below under the heading ‘Outstanding Share-based Awards and Options-based Awards of the Board of Directors and the Management Board’ for additional details regarding the LTIP. |
5. |
Ms Koeppel, being a former director of Reynolds American Inc. and a participant in the Deferred Compensation Plan for Directors of Reynolds American Inc. (DCP), holds DSUs which were granted prior to becoming a Director of BAT. Each DSU entitles the holder to receive a cash payment upon ceasing to be a Director equal to the value of one BAT ADS. The number of DSUs increases on each dividend date by reference to the value of dividends declared on the ADSs underlying the DSUs. Ms Koeppel currently holds 26,660.09 DSUs. |
6. |
The number of ordinary shares beneficially owned by the members of the Management Board include ordinary shares awarded and required to be held for a period of at least three years in a UK-based trust under the SIP. Ordinary shares cannot be sold or transferred out of the trust until the end of the three-year holding period. The amounts next to the corresponding Management Board member include the following ordinary shares held in the trust under the SIP: (a) 1,159 ordinary shares for Mr Abelman, of which 498 have been held for less than three years; (b) 551 ordinary shares for Ms Bellini, of which 371 have been held for less than three years; (c) 1,199 ordinary shares for Mr Comin, of which 502 have been held for less than three years; (d) 30 ordinary shares for Mr Dijanosic, all of which 30 have been held for less than three years; (e) 359 ordinary shares for Mr Khan, all of which 207 have been held for less than three years; (f) 460 ordinary shares for Ms Kim, all of which 387 have been held for less than three years; (g) 601 ordinary shares for Mr Lageweg, 382 of which have been held for less than three years; (h) 400 ordinary shares for Mr Meldrum, 329 of which have been held for less than three years; (i) 2,517 ordinary shares for Dr O’Reilly, of which 760 have been held for less than three years; (j) 1,162 ordinary shares for Mr Vandermeulen, of which 492 have been held for less than three years; and (k) 1,278 ordinary shares for Mr Wheaton, of which 535 have been held for less than three years. In all cases, the beneficial owner of ordinary shares under the SIP may direct the trust to exercise its voting rights in accordance with their instructions. See footnote (5) to the table below under the heading ‘Outstanding Share-based Awards and Options-based Awards of the Board of Directors and the Management Board’ for additional details regarding the SIP and the ordinary shares held thereunder. |
7. |
The number of ordinary shares beneficially owned by the members of the Management Board include the following number of options granted under the LTIP that are scheduled to vest and may be exercised within 60 days of 9 February 2022: (a) 37,560 options under the LTIP for Mr Abelman; (b) 29,296 options under the LTIP for Ms Bellini; (c) 31,550 options under the LTIP for Mr Comin; (d) 8,862 options under the LTIP for Mr Khan; (e) 30,048 options under the LTIP for Ms Kim; (f) 29,296 options under the LTIP for Mr Lageweg; (g) 31,550 options under the LTIP for Mr Meldrum; (h) 30,048 options under the LTIP for Dr O’Reilly; (i) 8,299 options under the LTIP for Mr Dijanosic; (j) 39,438 options under the LTIP for Mr Vandermeulen; (k) 43,194 options under the LTIP for Mr Wheaton. Each option is convertible into one ordinary share upon exercise. See footnote (1) to the table below under the heading ‘Outstanding Share-based Awards and Options-based Awards of the Board of Directors and the Management Board’ for additional details regarding the LTIP. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
8. |
The number of ordinary shares beneficially owned by the members of the Management Board include the following number of awards of restricted ordinary shares granted under the DSBS that are scheduled to vest within 60 days of 9 February 2022: (a) 13,785 ordinary shares for Mr Abelman; (b) 5,084 ordinary shares for Mr Comin; (c) 2,981 ordinary shares for Mr Khan; (d) 3,798 ordinary shares for Ms Kim; (e) 5,265 ordinary shares for Mr Lageweg; (f) 5,651 ordinary shares for Mr Meldrum; (g) 11,028 ordinary shares for Dr O’Reilly; (h) 2,827 ordinary shares for Mr Dijanosic; (i) 13,785 ordinary shares for Mr Vandermeulen; (j) 13,785 ordinary shares for Mr Wheaton; and (k) 5,525 ordinary shares for Ms Bellini. Until awards of ordinary shares under the DSBS vest, they are held in trust and the recipient of such award does not have the ability to transfer, sell or direct the voting of the applicable ordinary shares. See footnote (4) to the table below under the heading ‘Outstanding Share-based Awards and Options-based Awards of the Board of Directors and the Management Board’ for additional details regarding the DSBS. |
9. |
The number of ordinary shares beneficially owned by Mr Lageweg includes 109,558 ADSs, each of which represents one ordinary share. |
10. |
The information in this column is based on 2,294,690,625 ordinary shares outstanding (excluding treasury shares) as of 9 February 2022. Any securities not outstanding subject to options, warrants, rights or conversion privileges that give the beneficial owner the right to acquire the securities within 60 days are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person but are not deemed to be outstanding for the purpose of computing the percentage of the class by any other person. |
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Directors |
| |||||||||||||||||||||||
Jack Bowles |
| |||||||||||||||||||||||
LTIP 1 |
176,532 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2024 – 27 Mar 2029 |
||||||||||||||||||
223,129 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2025 – 29 Mar 2030 |
|||||||||||||||||||
230,314 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2026 – 28 Mar 2031 |
|||||||||||||||||||
Total Options 3 |
629,975 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
26,192 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
53,618 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
40,052 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
6 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
8 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
9 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
7 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
9 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
13 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
12 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
13 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
13 |
12 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
16 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
16 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
120,313 |
BAT Annual Report and Form 20-F 2021 |
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Tadeu Marroco |
| |||||||||||||||||||||||
LTIP 1 |
36,057 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
113,938 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2025 – 29 Mar 2030 |
|||||||||||||||||||
115,017 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2026 – 28 Mar 2031 |
|||||||||||||||||||
Sharesave 2 |
624 |
30 Mar 2020 |
24.01 |
26.35 |
– |
1 May 2025 – 31 Oct 2025 |
||||||||||||||||||
Total Options 3 |
265,636 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
13,233 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
24,388 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
18,727 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
11 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
13 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
14 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
12 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
14 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
21 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
20 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
21 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
14 May 2021 |
– |
– |
22 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
25 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
27 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
56,877 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Management Board |
| |||||||||||||||||||||||
Jerome Abelman |
| |||||||||||||||||||||||
LTIP 1 |
37,560 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
40,676 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
38,715 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
10,653 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
10,139 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
137,743 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
13,785 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
15,824 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
11,114 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
9 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
10 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
11 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
10 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
12 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
18 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
17 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
18 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
18 |
12 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
22 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
24 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
41,221 |
BAT Annual Report and Form 20-F 2021 |
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Marina Bellini |
||||||||||||||||||||||||
LTIP 1 |
29,296 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
31,105 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
39,835 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
8,146 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
10,433 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Sharesave 2 |
785 |
28 Mar 2019 |
22.91 |
28.63 |
– |
1 May 2022 – 31 Oct 2022 |
||||||||||||||||||
Total Options 3 |
119,600 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
5,525 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
12,101 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
10,711 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
99 |
1 Apr 2022 |
||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
1 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
3 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
2 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
2 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
7 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
6 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
7 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
7 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
10 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
10 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
28,708 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Luciano Comin |
||||||||||||||||||||||||
LTIP 1 |
31,550 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
5,299 |
30 Mar 2020 |
0.00 |
25.52 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
36,077 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
8,773 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
9,448 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
91,147 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
5,084 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
13,032 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
10,059 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
9 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
11 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
12 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
10 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
13 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
18 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
17 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
18 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
19 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
22 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
24 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
28,677 |
|||||||||||||||||||||||
Michael Dijanosic |
||||||||||||||||||||||||
LTIP 1 |
8,299 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
7,739 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
31,567 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
2,149 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
8,267 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
58,021 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
2,827 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
2,746 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
4,873 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2021 |
– |
– |
30 |
1 Apr 2024 |
||||||||||||||||||
Total Restricted Share Awards 6 |
10,476 |
BAT Annual Report and Form 20-F 2021 |
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Zafar Khan |
||||||||||||||||||||||||
LTIP 1 |
8,862 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
8,855 |
30 Mar 2020 |
0.00 |
25.52 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
31,567 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
2,459 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
8,043 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
59,786 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
2,981 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
3,062 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
2,992 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
1 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
2 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
9,242 |
|||||||||||||||||||||||
Hae In Kim |
||||||||||||||||||||||||
LTIP 1 |
30,048 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
2,802 |
6 Apr 2020 |
0.00 |
29.50 |
– |
6 Apr 2023 – 5 Apr 2030 |
|||||||||||||||||||
35,325 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
8,355 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
9,251 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
85,781 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
3,798 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
12,411 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
9,789 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
1 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
3 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
4 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
3 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
3 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
7 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
6 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
6 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
7 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
9 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
9 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
26,385 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Paul Lageweg |
||||||||||||||||||||||||
LTIP 1 |
29,296 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
31,105 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
36,159 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
8,146 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
9,470 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Sharesave 2 |
1,309 |
28 Mar 2019 |
22.91 |
28.63 |
– |
1 May 2024 – 31 Oct 2024 |
||||||||||||||||||
Total Options 3 |
115,485 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
5,265 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
12,101 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
9,580 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
1 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
2 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
3 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
2 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
3 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
6 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
5 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
6 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
6 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
9 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
10 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
27,328 |
|||||||||||||||||||||||
Guy Meldrum |
||||||||||||||||||||||||
LTIP 1 |
31,550 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
5,633 |
12 Aug 2020 |
0.00 |
26.36 |
– |
12 Aug 2023 – 11 Aug 2030 |
|||||||||||||||||||
43,593 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
8,773 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
11,417 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
100,966 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
5,651 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
13,032 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
10,780 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
29,792 |
BAT Annual Report and Form 20-F 2021 |
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Dr David O’Reilly |
||||||||||||||||||||||||
LTIP 1 |
30,048 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
12,354 |
2 Apr 2020 |
0.00 |
25.52 |
– |
2 Apr 2023 – 1 Apr 2030 |
|||||||||||||||||||
31,282 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
8,522 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
8,192 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
90,398 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
11,028 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
12,659 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
8,958 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
31 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
32 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
33 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
29 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
34 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
44 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
42 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
43 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
44 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
48 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
51 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
33,405 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Johan Vandermeulen |
||||||||||||||||||||||||
LTIP 1 |
39,438 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
41,872 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
40,662 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
10,966 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
10,649 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Total Options 3 |
143,587 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
13,785 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
16,290 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
11,615 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
8 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
10 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
11 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
10 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
11 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
18 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
16 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
17 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
18 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
21 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
23 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
42,182 |
BAT Annual Report and Form 20-F 2021 |
Number of Options Held |
Date of Grant/Award |
Options Exercise Price £ |
Market Price at Date of Grant of Option £ |
Number of Shares Awarded |
Exercisable (LTIP/Sharesave) Vesting (DSBS/SIP) |
|||||||||||||||||||
Kingsley Wheaton |
||||||||||||||||||||||||
LTIP 1 |
43,194 |
28 Mar 2019 |
0.00 |
33.28 |
– |
28 Mar 2022 – 27 Mar 2029 |
||||||||||||||||||
46,777 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 – 29 Mar 2030 |
|||||||||||||||||||
48,578 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 – 28 Mar 2031 |
|||||||||||||||||||
Restricted Share Plan 7 |
12,251 |
30 Mar 2020 |
0.00 |
26.33 |
– |
30 Mar 2023 |
||||||||||||||||||
12,722 |
29 Mar 2021 |
0.00 |
27.94 |
– |
29 Mar 2024 |
|||||||||||||||||||
Sharesave 2 |
1,309 |
28 Mar 2019 |
22.91 |
28.63 |
– |
1 May 2024 – 31 Oct 2024 |
||||||||||||||||||
Total Options 3 |
164,831 |
|||||||||||||||||||||||
DSBS 4 |
– |
28 Mar 2019 |
– |
– |
13,785 |
28 Mar 2022 |
||||||||||||||||||
– |
30 Mar 2020 |
– |
– |
18,198 |
30 Mar 2023 |
|||||||||||||||||||
– |
29 Mar 2021 |
– |
– |
13,454 |
29 Mar 2024 |
|||||||||||||||||||
SIP 5 |
– |
1 Apr 2019 |
– |
– |
112 |
1 Apr 2022 |
||||||||||||||||||
– |
8 May 2019 |
– |
– |
13 |
8 May 2022 |
|||||||||||||||||||
– |
8 Aug 2019 |
– |
– |
14 |
8 Aug 2022 |
|||||||||||||||||||
– |
14 Nov 2019 |
– |
– |
16 |
14 Nov 2022 |
|||||||||||||||||||
– |
6 Feb 2020 |
– |
– |
13 |
6 Feb 2023 |
|||||||||||||||||||
– |
1 Apr 2020 |
– |
– |
125 |
1 Apr 2023 |
|||||||||||||||||||
– |
13 May 2020 |
– |
– |
15 |
13 May 2023 |
|||||||||||||||||||
– |
19 Aug 2020 |
– |
– |
22 |
19 Aug 2023 |
|||||||||||||||||||
– |
12 Nov 2020 |
– |
– |
20 |
12 Nov 2023 |
|||||||||||||||||||
– |
5 Feb 2021 |
– |
– |
22 |
5 Feb 2024 |
|||||||||||||||||||
– |
1 Apr 2021 |
– |
– |
92 |
1 Apr 2024 |
|||||||||||||||||||
– |
12 May 2021 |
– |
– |
21 |
14 May 2024 |
|||||||||||||||||||
– |
20 Aug 2021 |
– |
– |
24 |
20 Aug 2024 |
|||||||||||||||||||
– |
11 Nov 2021 |
– |
– |
26 |
11 Nov 2024 |
|||||||||||||||||||
Total Restricted Share Awards 6 |
45,972 |
1. |
LTIP: grants or awards of ordinary shares under the LTIP are for nil consideration. The number of options shown is the maximum that may be exercised subject to the completion of the applicable performance period and conditions under the rules of the LTIP. The number of options which may vest and become exercisable may be less than the number of ordinary shares shown in the table. |
2. |
Sharesave Scheme: grants of options under the Sharesave Scheme are: (a) normally granted at a discount of 20% to the market price of ordinary shares at the time of invitation, as permitted by the rules of the Sharesave Scheme; and (b) are exercisable at the end of a three-year or five-year savings contract up to a monthly limit of £500. |
3. |
Each of the LTIP and Sharesave Scheme contains provisions which permit the Board of Directors or a duly authorised committee of the Board of Directors to establish further plans for the benefit of overseas employees based on the relevant share plan but modified as necessary or desirable to take account of overseas tax, exchange control or applicable securities laws. Any new ordinary shares issued under such plans would not count towards any applicable plan limits under the LTIP or the Sharesave Scheme. |
4. |
DSBS: a portion of annual bonus is deferred into a grant of ordinary shares which vests after a three year period. No further performance conditions apply in that period. Participants have no ownership over the shares until vesting and the shares carry no rights to vote in that period. Dividend equivalent payments are paid quarterly during the vesting period. |
5. |
SIP: the SIP is an all-employee plan which includes the SRS under which eligible employees receive an award of ordinary shares (Free Shares) in April of each year in which the plan operates in respect of performance in the previous financial year. The Free Shares are held in a UK-based trust from the date of the award for a minimum period of three years. During that time the SIP participant is entitled to receive dividends on those ordinary shares which are re-invested by such trust to buy further ordinary shares (Dividend Shares) on behalf of the SIP participant. The Dividend Shares are also held in the trust from the date of acquisition for a minimum period of three years. During the three-year holding periods, the SIP participant may not remove the Free Shares or the Dividend Shares from the trust, but may direct the trust to exercise its voting rights in accordance with his or her instructions. In addition to the Free Shares and Dividend Shares, participants in the SIP are also eligible to purchase additional ordinary shares from their pre-tax salary up to an annual statutory limit (Partnership Shares). The SIP also provides that BAT has the right to offer additional ordinary shares to a participant at no cost for each Partnership Share the participant purchases, at a ratio of two such ordinary shares for each Partnership Share purchased (Matching Shares). BAT does not currently provide any Matching Shares. |
6. |
BAT has established similar plans to the SIP for non-UK employees and specific plans for employees in Germany, Belgium and the Netherlands. Each of these plans has been modified to take account of overseas tax, exchange control and applicable securities laws. |
7. |
Restricted Share Plan: grant of ordinary shares which vests after a three year period. No performance conditions apply in that period. Participants have no ownership over the shares until vesting and the shares carry no rights to vote in that period. Dividend equivalent payments are paid on shares vesting. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
The Company is incorporated under the name of British American Tobacco p.l.c. and is registered in England and Wales under registered number 3407696. Under the Companies Act 2006 (the “Companies Act”), the Company’s objects are unrestricted. The following descriptions summarise certain provisions of the Company’s current Articles of Association (the “Articles”) (as adopted by special resolution at the AGM on 28 April 2010), applicable English and Welsh law and the Companies Act. This summary is qualified in its entirety by reference to the Companies Act and the Articles, available on bat.com. The Articles may be altered or added to, or completely new articles may be adopted, by a special resolution of the shareholders of the Company, subject to the provisions of the Companies Act. |
Share capital – structure |
Ordinary shares |
– all of the Company’s ordinary shares are fully paid |
– no further contribution of capital may be required by the Company from the holders of such shares |
Alteration of share capital – the Company by ordinary resolution may: |
– consolidate and divide all or any of its shares into shares of a larger amount than its existing shares |
– divide or sub-divide any of its shares into shares of smaller amount than its existing shares |
– determine that, as between the shares resulting from such a sub-division, any of them may have any preference or advantage as compared with the others |
Alteration of share capital – the Company, subject to the provisions of the Companies Act, may: |
– reduce its share capital, its capital redemption reserve and any share premium account in any way |
– purchase its own shares, including redeemable shares, and may hold such shares as treasury shares or cancel them |
Dividend rights |
– shareholders may, by ordinary resolution, declare dividends but not in excess of the amount recommended by the Directors |
– the Directors may pay interim dividends out of distributable profits |
– no dividend shall be paid otherwise than out of the profits available for distribution as specified under the provisions of the Companies Act |
– the Directors may, with the authority of an ordinary resolution of the shareholders, pay scrip dividends or satisfy the payment of a dividend by the distribution of specific assets |
– unclaimed dividends for a period of 12 years may be forfeited and cease to be owed by the Company |
– specific provisions enable the Directors to elect to pay dividends by bank or electronic transfer only |
Share capital – voting rights |
Voting at general meetings |
– by a show of hands, unless a poll is demanded, and on a show of hands, every shareholder who is present in person at a general meeting has one vote regardless of the number of shares held by that shareholder |
– every proxy appointed by a shareholder and present at a general meeting has one vote except that if the proxy has been duly appointed by more than one shareholder entitled to vote on the resolution and is instructed by one or more of those shareholders to vote for the resolution and by one or more others to vote against it, or is instructed by one or more of those shareholders to vote in one way and is given discretion as to how to vote by one or more others (and wishes to use that discretion to vote in the other way), he has one vote for and one vote against the resolution |
– on a poll, every shareholder who is present in person or by proxy has one vote for every share held by the shareholder |
– a shareholder (or his duly appointed proxy) entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way |
– a poll may be demanded by any of the following: |
(1) the Chairman of the meeting; |
(2) the Directors; |
(3) not less than five shareholders having the right to vote at the meeting; |
(4) a shareholder or shareholders representing not less than one-tenth of the total voting rights of all shareholders having the right to vote at the meeting (excluding any voting rights attached to treasury shares); or |
(5) a shareholder or shareholders holding shares which confer a right to vote on the resolution at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right (excluding any voting rights attached to treasury shares) |
Matters transacted at general meetings |
– ordinary resolutions can include resolutions for the appointment, reappointment and removal of Directors, the receiving of the Annual Report, the declaration of final dividends, the appointment and reappointment of the external auditor, the authority for the Company to purchase its own shares and the grant of authority to allot shares |
– an ordinary resolution is passed when a simple majority of the votes cast at a meeting at which there is a quorum vote in favour of the resolution |
– special resolutions can include resolutions amending the Company’s Articles and resolutions relating to certain matters concerning a winding-up of the Company |
– a special resolution is passed when not less than three-quarters of the votes cast at a meeting at which there is a quorum vote in favour of the resolution |
– quorum for a meeting of the Company is a minimum of two shareholders present in person or by proxy or by a duly authorised representative(s) of a corporation which is a shareholder and entitled to vote |
– convening a meeting: the Company may specify a time not more than 48 hours before the time of the meeting (excluding any part of a day that is not a working day) by which a person must be entered on the register of members in order to have the right to attend or vote at the meeting |
BAT Annual Report and Form 20-F 2021 |
Share capital – pre-emptive rights and new issues of shares |
– holders of ordinary shares have no pre-emptive rights under the Articles – the ability of the Directors to cause the Company to issue shares, securities convertible into shares or rights to shares, otherwise than pursuant to an employee share scheme, is restricted |
– under the Companies Act, the directors of a company are, with certain exceptions, unable to allot any equity securities without express authorisation, which may be contained in a company’s articles of association or given by its shareholders in a general meeting, but which in either event cannot last for more than five years |
– under the Companies Act, a company may also not allot shares for cash (otherwise than pursuant to an employee share scheme) without first making an offer to existing shareholders to allot such shares to them on the same or more favourable terms in proportion to their respective shareholdings, unless this requirement is waived by a special resolution of the shareholders |
Restrictions on transfers of shares |
– Directors can, in their absolute discretion, refuse to register the transfer of a share in certificated form which is not fully paid, provided that such a refusal would not prevent dealings in shares in certificated form which are not fully paid from taking place on a proper basis |
– the Directors may also refuse to register a transfer of a share in certificated form (whether fully paid or not) unless the instrument of transfer: (1) is lodged, duly stamped, and is deposited at the registered office of the Company or such other place as the Directors may appoint and is accompanied by a certificate for the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer; (2) is in respect of only one class of share; and (3) is in favour of not more than four transferees |
– for uncertificated shares, transfers shall be registered only in accordance with the terms of the Uncertificated Securities Regulations 2001 so that Directors may refuse to register a transfer which would require shares to be held jointly by more than four persons |
– if the Directors refuse to register a share transfer, they must give the transferee notice of this refusal as soon as practicable and in any event within two months of the instrument of transfer being lodged with the Company |
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 |
Directors |
Appointment and retirement |
– a Board of Directors of not fewer than five Directors and not subject to any maximum (unless otherwise determined by ordinary resolution of shareholders) |
– Directors and the Company (by ordinary resolution) may appoint a person who is willing to act as a Director |
– the Articles govern the minimum number of Directors who must be subject to retirement at each AGM and who may seek re-election |
– notwithstanding the Articles, all of the Directors of the Company will be subject to re-election at the forthcoming AGM to be held on 28 April 2022 in accordance with the UK Corporate Governance Code |
– fees for Non-Executive Directors and the Chairman are determined by the Directors but cannot currently exceed in aggregate an annual sum of £2,500,000, unless determined otherwise by ordinary resolution of the shareholders |
– the remuneration of the Executive Directors is determined by the Remuneration Committee, which comprises independent Non-Executive Directors |
Disclosure of interests |
– the Articles require disclosure, subject to certain limited exceptions, of Directors’ interests in transactions that may result in a conflict of interest, including those which may arise as a result of the Director’s office or employment or persons connected with such Director, and identify procedures to resolve such conflicts of interest |
Meetings and voting |
– the quorum for a meeting of Directors is two Directors |
– the Directors may delegate any of their powers to a person or a committee |
– the Articles place a general prohibition on a Director voting at a Board meeting on any matter in which he has an interest other than by virtue of his interest in shares in the Company |
– the Articles restrict a Director’s ability to vote on any resolution concerning a matter in which such Director has a material interest, unless such Director’s interest arises only because the resolution relates to the giving of guarantees; the provision of indemnities; insurance proposals; retirement benefits; and other specified transactions or arrangements with a company in which the Director may have an indirect interest |
Borrowing powers |
– the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property, assets (present and future) and uncalled capital |
– the Directors may also issue debentures, debenture stock and other securities |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Additional disclosures |
Disclosure of ownership of shares |
– there are no provisions in the Articles whereby persons acquiring, holding or disposing of a certain percentage of the Company’s ordinary shares are required to make disclosure of their ownership percentage, although there are such requirements under statute and regulation |
Director retirement |
– there is no requirement for a Director to retire on reaching any age |
Sinking funds |
– there is no sinking fund provision in the Articles applicable to the Company’s ordinary shares |
Limitations on voting and shareholding |
– there are no limitations under the Articles restricting the right of non-resident or foreign owners to hold or vote ordinary shares in the Company |
Distribution of assets on a winding up |
– if the Company is wound up, the liquidator may, with the sanction of a special resolution and any other sanction required by law, divide among the members in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members |
– the liquidator may, with the like sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the members as he may with the like sanction determine, but no member shall be compelled to accept any assets upon which there is a liability |
Anti-takeover devices and change of control |
– there are no provisions in the Articles that would have the effect of delaying, deferring or preventing a takeover, or change of control, of the Company |
– under English law, the Company’s Directors have a fiduciary duty to take only those actions that are in the interests of the Company and any anti-takeover devices employed by the Directors in the future, if any, must accordingly be in the interests of the Company |
– the Company is also subject to the City Code on Takeovers and Mergers (the "City Code”), which governs the conduct of mergers and takeovers in the UK. Any takeover of the Company would have to be in accordance with the City Code |
BAT Annual Report and Form 20-F 2021 |
Renewal of Authority for Company to Purchase Own Shares | ||
Current authority to purchase shares |
– this authority (granted at the 2021 AGM) will expire at the 2022 AGM; and – renewed authority to purchase the Company’s ordinary shares in order that the appropriate mechanisms are in place to enable the share buy-back programme to be reinstated at any time and authority would be exercised when, in the opinion of the Directors, the exercise of the authority would result in an increase in the Company’s earnings per share and would be in the interest of its shareholders generally. | |
Proposed authority to purchase shares |
– the minimum price that may be paid for such shares is 25p, and the maximum price is the higher of: (i) an amount equal to 105% of the average of the middle-market prices shown in the quotation for an ordinary share as derived from the LSE Daily Official List for the five business days immediately preceding the day on which the ordinary share is contracted to be purchased; and (ii) the higher of the price of the last independent trade and the highest current independent bid for an ordinary share in the Company on the trading venues where the market purchases by the Company will be carried out; – in the absence of the necessary practical arrangements, the proposed authority has not been extended to enable BAT to purchase its own ordinary shares on the JSE in South Africa or the NYSE in the form of ADSs; and – further details are set out in the Notice of Annual General Meeting 2022 which is made available to all shareholders and is published on bat.com. | |
Treasury shares |
– in accordance with the Company’s policy, any repurchased shares are expected to be held as treasury shares; at 31 December 2021, the number of treasury shares was 161,930,217 (2020: 162,347,246); no dividends are paid on treasury shares; treasury shares have no voting rights; and treasury shares may be resold at a later date. |
Total number of ordinary shares purchased by ESOPs or certain employee share- based plans |
|
Average price paid per ordinary share £ |
|
|
Total number of ADSs purchased by ESOPs or certain employee share- based plans |
|
|
Average price paid per ADS US$ |
|
|
Total number of ordinary shares purchased as part of a publicly announced plan 1 |
|
|
Maximum number of shares that may yet be purchased as part of a publicly announced plan 1 |
| |||||||||
2021 |
||||||||||||||||||||||||
7 January |
3,046 |
28.118500 |
– |
– |
– |
– |
||||||||||||||||||
3 February |
3,187 |
27.188100 |
– |
– |
– |
– |
||||||||||||||||||
3 February |
21,151 |
27.127600 |
– |
– |
– |
– |
||||||||||||||||||
3 March |
3,407 |
25.498700 |
– |
– |
– |
– |
||||||||||||||||||
31 March |
1,783,215 |
27.709844 |
– |
– |
– |
– |
||||||||||||||||||
1 April |
322,326 |
27.239586 |
– |
– |
– |
– |
||||||||||||||||||
1 April |
177,289 |
27.320552 |
– |
– |
– |
– |
||||||||||||||||||
1 April |
7,041 |
27.290000 |
– |
– |
– |
– |
||||||||||||||||||
1 April |
8,292 |
27.320552 |
– |
– |
– |
– |
||||||||||||||||||
7 April |
3,270 |
27.772500 |
– |
– |
– |
– |
||||||||||||||||||
7 April |
7,487 |
27.982000 |
– |
– |
– |
– |
||||||||||||||||||
7 April |
2,770 |
27.605000 |
– |
– |
– |
– |
||||||||||||||||||
28 April |
80,120 |
27.046770 |
– |
– |
– |
– |
||||||||||||||||||
5 May |
3,440 |
27.176900 |
– |
– |
– |
– |
||||||||||||||||||
12 May |
20,286 |
28.130600 |
– |
– |
– |
– |
||||||||||||||||||
3 June |
3,482 |
27.226300 |
– |
– |
– |
– |
||||||||||||||||||
7 July |
3,221 |
28.091500 |
– |
– |
– |
– |
||||||||||||||||||
4 August |
3,208 |
27.060000 |
– |
– |
– |
– |
||||||||||||||||||
20 August |
23,208 |
27.142953 |
– |
– |
– |
– |
||||||||||||||||||
1 September |
177,690 |
27.286770 |
– |
– |
– |
– |
||||||||||||||||||
1 September |
2,752 |
27.151700 |
– |
– |
– |
– |
||||||||||||||||||
6 October |
3,925 |
25.149800 |
– |
– |
– |
– |
||||||||||||||||||
4 November |
3,415 |
25.202000 |
– |
– |
– |
– |
||||||||||||||||||
11 November |
23,881 |
25.912700 |
– |
– |
– |
– |
||||||||||||||||||
1 December |
3,255 |
25.643500 |
– |
– |
– |
– |
||||||||||||||||||
2,694,364 |
27.055777 |
– |
– |
– |
– |
1. |
There was no publicly announced plan for BAT to purchase its own ordinary shares or ADSs during the year ended 31 December 2021. |
2. |
All the purchases of ordinary shares were made on open market transactions. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
The British American Tobacco Group Employee Trust (BATGET) | ||||||
Function |
– used to satisfy the vesting and exercise of awards of ordinary shares under the BAT Deferred Share Bonus Scheme and Long-Term Incentive Plans; and – a committee of senior management reporting to the Board’s Share Schemes Committee monitors the number of ordinary shares held in BATGET to satisfy outstanding awards. | |||||
Funding |
– funded by interest-free loan facilities from the Company totalling £1 billion; – this enables BATGET to facilitate the purchase of ordinary shares to satisfy the future vesting or exercise of options and awards; – loan to BATGET: £300.00 million at 31 December 2021 (2020: £795.02 million); – the loan is either repaid from the proceeds of the exercise of options or, in the case of ordinary shares acquired by BATGET to satisfy the vesting and exercise of awards, the Company will subsequently waive the loan provided over the life of the awards; and – if any options lapse, ordinary shares may be sold by BATGET to cover the loan repayment. |
1 Jan 2021 |
31 Dec 2021 |
|||||||||
Ordinary shares held in BATGET |
Number of ordinary shares |
5,787,154 |
5,995,678 |
|||||||
Market value of ordinary shares |
|
£156.7m |
|
|
£163.9m |
| ||||
% of issued share capital of Company |
0.24 |
0.24 |
Dividends paid in 2021 |
– BATGET currently waives dividends on the ordinary shares held by it; and – quarterly interim dividends 2021: £12.63 million across 2021. | |||||
Voting rights |
– the trustee does not exercise any voting rights while ordinary shares are held in BATGET; and – share scheme participants may exercise the voting rights attaching to those ordinary shares once the ordinary shares have been transferred out of BATGET. |
1. |
Company share – based payment arrangements: |
2. |
The values of ordinary shares shown are based on the closing mid-market share price on 31 December 2021: 2,733p (31 December 2020: 2,708p). |
3. |
In addition to the ordinary shares held in BATGET, the trust held the following American Depositary Shares (ADSs) which relate to the vesting and exercise of certain employee stock awards formerly granted by Reynolds American Inc. over Reynolds American Inc. common stock and which were assumed by BAT to be satisfied by the delivery of ADSs following the merger with Reynolds American Inc. on 25 July 2017. |
1 Jan 2021 |
31 Dec 2021 |
|||||||
Number of ADSs |
15,197 |
15,197 |
||||||
Market value of ADSs (a) |
US$0.6m |
US$0.6m |
||||||
% of issued share capital |
0.0006 |
0.0006 |
BAT Annual Report and Form 20-F 2021 |
Service |
Fees | |
Issuance of ADSs upon deposit of ordinary shares (excluding issuances as a result of distributions of shares described below) |
Up to US$0.05 per ADS issued 1 | |
Cancellation of ADSs |
Up to US$0.05 per ADS surrendered 1 | |
Distribution of cash dividends or other cash distributions (i.e., sale of rights and other entitlements) |
Up to US$0.05 per ADS held 2 | |
Distribution of ADSs pursuant to: (1) stock dividends or other free stock distributions; or (2) exercise of rights to purchase additional BAT ADSs |
Up to US$0.05 per ADS held | |
Distribution of securities other than ADSs or rights to purchase additional ADSs (i.e., spinoff shares) |
Up to US$0.05 per ADS held | |
Depositary bank services |
Up to US$0.05 per ADS held |
1. |
Under the terms of a separate agreement between BAT and the Depositary, the Depositary has agreed to waive the fees that would otherwise be payable in connection with the issuance of ADSs upon deposit of ordinary shares and the cancellation of ADSs and corresponding withdrawal of ordinary shares, in each case by BAT or any of its affiliates, officers, directors or employees. The terms of this separate agreement may be amended at any time by BAT and the Depositary. |
2. |
While under the Restated Deposit Agreement cash dividends paid in respect of ADSs are subject to a fee of up to US$0.05 per ADS payable to the Depositary, under the terms of the separate agreement between BAT and the Depositary referred to above, such dividends are instead subject to a fee of up to US$0.02 per ADS per year (a fee of US$0.005 per dividend based on the distribution of four quarterly cash dividends per year). Under the separate agreement, this dividend fee may not be varied by the Depositary without the consent of BAT. |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
– |
update personal details and provide address changes; |
– |
update dividend bank mandate instructions and review dividend payment history; |
– |
register for the Dividend Reinvestment Plan (“DRIP”); and |
– |
register to receive Company communications electronically. |
Calendar 2022 | ||
Thur 28 April at 11:30am |
Annual General Meeting Details of the venue and business to be proposed at the meeting are set out in the Notice of Annual General Meeting, which is made available to all shareholders and is published on bat.com. BAT provides for the vote on each resolution to be by poll rather than by a show of hands. This provides for greater transparency and allows the votes of all shareholders to be counted, including those cast by proxy. The voting results will be released on the same day in accordance with regulatory requirements and made available on bat.com. | |
Wed 27 July |
Half-Year Report |
BAT Annual Report and Form 20-F 2021 |
Exhibit Number |
Description | |
1 |
||
2.1 |
||
2.2 |
||
2.3 |
||
2.4 |
||
2.5 |
||
2.6 |
||
2.7 |
||
2.8 |
||
2.9 |
||
2.10 |
||
2.11 |
||
2.12 |
||
2.13 |
||
2.14 |
||
2.15 |
||
2.16 |
||
2.17 |
||
2.18 |
||
2.19 |
||
4.1 |
||
4.2 |
||
4.3 |
||
4.4 |
||
4.5 |
||
4.6 |
||
4.7 |
||
4.8 |
||
4.9 |
||
4.10 |
||
4.11 |
||
4.12 |
||
4.13 |
||
4.14 |
||
4.15 |
||
4.16 |
||
4.17 |
||
4.18 |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Exhibit Number |
Description | |
4.19 |
||
4.20 |
||
8 |
||
11 |
||
12 |
||
13 |
||
15 |
||
17 |
||
101 |
Interactive Data Files (formatted in XBRL (Extensible Business Reporting Language) and furnished electronically). |
BAT Annual Report and Form 20-F 2021 |
ADR |
American Depositary Receipt | |
ADS |
American Depositary Share – 1 ADS is equivalent to 1 BAT ordinary share | |
AGM |
Annual General Meeting | |
AmSSA |
Americas (excluding US) and Sub- Saharan Africa | |
APFO |
Adjusted profit from operations | |
APME |
Asia-Pacific and Middle East | |
BATGET |
British American Tobacco Group Employee Trust | |
bps |
Basis points | |
CC |
Constant currency | |
CGFO |
Cash generated from operations | |
CO 2 e |
Carbon dioxide equivalent | |
Code |
UK Corporate Governance Code, July 2018 version | |
CSR |
Corporate Social Responsibility | |
DSBS |
Deferred share bonus scheme | |
EMTN |
European Medium Term Notes | |
ENA |
Europe and North Africa | |
EPS |
Earnings per share | |
ESG |
Environmental, Social and Governance | |
EU |
European Union | |
FII GLO |
Franked Investment Income Group Litigation Order | |
FCTC |
Framework Convention on Tobacco Control | |
FMCG |
Fast Moving Consumer Goods | |
GAAP |
Generally Accepted Accounting Practice | |
GDB |
Global Drive Brands, being Kent, Dunhill, Pall Mall, Lucky Strike and Rothmans | |
GDPR |
EU General Data Protection Regulation | |
GDSB |
Global Drive and Key Strategic Brands, being the GDBs, plus Shuang Xi and State Express 555 | |
GJ |
Gigajoules (of energy use) | |
IASB |
International Accounting Standards Board | |
IEIS |
International Executive Incentive Scheme | |
IFRS |
International Financial Reporting Standards as issued by the IASB and as adopted by the EU | |
ISA |
International Standards on Auditing | |
JSE |
Johannesburg Stock Exchange | |
KPI |
Key performance indicator | |
LIBOR |
London Interbank Offered Rate | |
LSE |
London Stock Exchange | |
LR |
Listing Rules | |
LTIP |
Long-Term Incentive Plan |
MCE |
Million cigarettes equivalent | |
MSA |
Master Settlement Agreement | |
NGP |
Next Generation Product | |
NRT |
Nicotine Replacement Therapy | |
NTO |
Net turnover or revenue | |
NYSE |
New York Stock Exchange | |
OCF |
Operating cash flow | |
OECD |
Organisation for Economic Co-operation and Development | |
OTP |
Other tobacco products, including but not limited to roll-your-own, make-your-own and cigars | |
Parker Report |
The Parker Review Committee’s final report on ethnic diversity in UK boards published on 12 October 2017 | |
PCAOB |
Public Company Accounting Oversight Board | |
Reynolds American |
Reynolds American Inc. | |
Reynolds American Companies |
Reynolds American Inc. and its subsidiary companies | |
SAFL |
Sustainable Agriculture and Farmer Livelihoods | |
SEC |
United States Securities and Exchange Commission | |
SIP |
Share incentive plan | |
SoBC |
Group Standards of Business Conduct | |
SOx |
United States Sarbanes-Oxley Act of 2002 | |
SRS |
Share reward scheme | |
TaO |
Programme to implement the new operating model, including one instance of SAP | |
TCFD |
Taskforce on Climate-related Financial Disclosures | |
TDR |
TDR d.o.o | |
THP |
Tobacco Heating Products (i.e. the devices) or Tobacco Heated Products (i.e. the consumables used by such devices) | |
TPD1 |
European Tobacco Products Directive (directive 2001/37/EC) | |
TPD2 |
European Tobacco and Related Products Directive (directive 2014/40/EU) | |
TSR |
Total shareholder return | |
US |
United States of America | |
UURBS |
Unfunded unapproved retirement benefit scheme | |
WHO |
World Health Organization |
BAT Annual Report and Form 20-F 2021 |
Strategic Report |
Governance Report |
Financial Statements |
Other Information | ||||
|
Item |
Form 20-F caption |
Location in this document | ||
1 |
Identity of Directors, Senior Management and Advisers |
N/A | ||
2 |
Offer Statistics and Expected Timetable |
N/A | ||
3 |
Key Information |
|||
A |
N/A | |||
B |
Capitalisation and indebtedness |
N/A | ||
C |
Reasons for the offer and use of proceeds |
N/A | ||
D |
Risk factors |
92-97, 317-339 >>, Developments in Ukraine page >> | ||
4 |
Information on the Company |
|||
A |
History and development of the Company |
3, 77, 81, 211-214, 245-246, 300, 315, 379 | ||
B |
Business overview |
2-73, 76, 84-91, 106-109, 190, 192-193, 300, 302, 320, 322, 340- 344, 347-348, 350 | ||
C |
Organisational structure |
280-289, 298 | ||
D |
Property, plants and equipment |
211-212, 348 | ||
4a |
Unresolved staff comments |
N/A | ||
5 |
Operating and Financial Review and Prospects |
|||
A |
Operating results |
3, 7-9, 22-23, 36, 38, 40-43, 75, 83, 85, 87-89, 91, 97, 225-227, 240-241, 313, 315, 325-329, 340-344 | ||
B |
Liquidity and capital resources |
80-81, 183, 228, 239-244, 315-316, 336 | ||
C |
Research and development, patent and licences |
3-5, 11-13, 16-19, 31, 50-51, 76, 196, 300 | ||
D |
Trend information |
2-73, 75-97, 340-344 >>, Developments in Ukraine page >> | ||
E |
Critical Accounting Estimates |
N/A | ||
6 |
Directors, Senior Management and Employees |
|||
A |
Directors and senior management |
100-102, 113 | ||
B |
Compensation |
128-165, 214-220, 250, 360-372 | ||
C |
Board practices |
100-102, 116-128, 133-134, 149-151, 250, 351, 374-375 | ||
D |
Employees |
249, 314 | ||
E |
Share ownership |
73, 163-165, 246-248, 361-372, 377 | ||
7 |
Major Shareholders and Related Party Transactions |
|||
A |
Major shareholders |
360-361 | ||
B |
Related party transactions |
249-250 | ||
C |
Interests of experts and counsel |
N/A | ||
8 |
Financial Information |
|||
A |
Consolidated statements and other financial information |
79, 95, 122, 178-281, 318-339, 354-355 | ||
B |
Significant changes |
N/A | ||
9 |
The Offer and Listing |
|||
A |
Offer and listing details |
353 | ||
B |
Plan of distribution |
N/A | ||
C |
Markets |
353 | ||
D |
Selling shareholders |
N/A | ||
E |
Dilution |
N/A | ||
F |
Expenses of the issue |
N/A | ||
10 |
Additional Information |
|||
A |
Share capital |
N/A | ||
B |
Memorandum and Articles of Association |
146, 373-375 | ||
C |
Material contracts |
215, 276, 346-347 | ||
D |
Exchange controls |
354 | ||
E |
Taxation |
356-359 | ||
F |
Dividends and paying agents |
N/A | ||
G |
Statements by experts |
N/A | ||
H |
Documents on display |
379 | ||
I |
Subsidiary information |
N/A | ||
11 |
Quantitative and Qualitative Disclosures about Market Risk |
239-244 |
BAT Annual Report and Form 20-F 2021 |
Item |
Form 20-F caption |
Location in this document | ||
12 |
Description of Securities Other Than Equity Securities |
|||
A |
Debt securities |
N/A | ||
B |
Warrants and rights |
N/A | ||
C |
Other securities |
N/A | ||
D |
American Depositary Shares |
378 | ||
13 |
Defaults, Dividend Arrearages and Delinquencies |
N/A | ||
14 |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
N/A | ||
15 |
Controls and Procedures |
350 | ||
16A |
Audit Committee Financial Expert |
120, 349 | ||
16B |
Code of Ethics |
127, 349 | ||
16C |
Principal Accountant Fees and Services |
123-124, 197 | ||
16D |
Exemptions from the Listing Standards for Audit Committees |
N/A | ||
16E |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
376 | ||
16F |
Change in Registrant’s Certifying Accountant |
N/A | ||
16G |
Corporate Governance |
349 | ||
16H |
Mine Safety Disclosure |
N/A | ||
16I |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
N/A | ||
17 |
Financial Statements |
N/A | ||
18 |
Financial Statements |
176-281 | ||
19 |
Exhibits |
380-381 |
By: | /s/ Paul McCrory | |
Paul McCrory Company Secretary |