Composition

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The new Combined Code requires that at least half the board, excluding the chairman, should be independent. To strike a balance between the company’s contractual obligations to Altria, Combined Code compliance, and a board structure best suited to achieving shareholder value, the company has reached agreement with Altria in terms of which Altria, in a spirit of support for the company’s needs, has agreed that for the foreseeable future the size of the board should not be reduced to a maximum of 11, as would have been required in terms of the relationship agreement described above, and has confirmed that, following Mr Camilleri’s retirement from the board, Altria will not, for the time being, exercise its right to nominate a third director to the board. The company considers that the composition of independent and non-independent directors will be appropriate for the company’s needs, with the changes set out in the following paragraphs.

Mr Levett will retire from the board at the forthcoming AGM and a newly recruited independent director, Mr John Manzoni, will take office from 1 August 2004, thereby increasing the number of independent directors to five. Mr Levett has made a significant contribution of expertise to the board and the audit committee and has served the group with distinction over 20 years of service, first on the South African and then on the UK board. He will be greatly missed.

The board is delighted to announce that Mr Manzoni has agreed to serve the company as a non-executive director from 1 August 2004. Mr Manzoni presently holds an executive directorship at BP plc where he is chief executive, refining and marketing. This will be his first non-executive position. Mr Manzoni is considered to be independent in all jurisdictions in which the company operates. The board looks forward to welcoming him to the company. He is expected to make a significant contribution.

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