2. Application of the Combined Code
The board applied the principles and provisions of the Combined Code throughout the year ended 31 March 2008, except in the following respects (with items (a) to (d) being dealt with more fully in sections 3 and 5 of this report):
- at least half the board, excluding the Chairman, were not independent for the purposes of the Combined Code;
- the audit committee did not consist solely of independent directors, as the committee included Ms De Lisi, an Altria Group, Inc. (‘Altria’) nominee, until her retirement on 30 April 2007, and then Mr Devitre, Altria’s nominated replacement for Ms De Lisi, neither of whom is independent for the purposes of the Combined Code;
- the nomination committee did not comprise a majority of independent non-executive directors throughout the period following the appointment to the nomination committee, under the terms of the respective relationship agreements with Altria and BevCo Ltd (‘BevCo’) of Mr Bible and Mr Santo Domingo Dávila to the nomination committee. The appointments took effect on 14 November 2007;
- the chairman of the nomination committee, although considered by the board to be independent in character and judgement, was not independent for the purposes of the Combined Code; and
- one director was not able to attend the 2007 annual general meeting because of a longstanding prior commitment.
The board has taken a number of steps to redress the balance of independent directors on the board and nomination committee:
- Ms Maria Ramos and Mr Rob Pieterse were appointed to the board on 15 May 2008. Both are independent non-executive directors; and
- Mr Ramaphosa, an independent non-executive director, was appointed to the nomination committee on 14 November 2007.
Lord Renwick of Clifton retires from the board on 31 July 2008. He stepped down as a member and as chairman of the nomination committee on 31 March 2008.
With effect from 15 May 2008, over half the board, excluding the Chairman, were independent for the purposes of the Combined Code and, with effect from 1 April 2008, a majority of the directors on the nomination committee were independent for the purposes of the Combined Code.