Directors' Report

General

The Directors present their Report together with the audited Financial Statements for the 52 weeks ended 1 January 2006 (the "period").

Principal activities

Our principal activities are detailed under The business today in the Description of Business. The operating companies principally affecting our profit or net assets in the period are listed in Note 36 to the Financial Statements.

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Business review

The Chairman's Statement, the Strategy Review, and the Summary Financial Review and Financial Statements, which appear in the Annual Review and Summary Financial Statement 2005, report on the development and performance of our business during the period, our position at the period end and the early part of 2006 and our likely future development. Acquisitions and disposals are detailed in the Operating and Financial Review. We continue to invest in research and development and details are given in the Description of Business.

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Revenue and Profit

Revenue during the period amounted to £6,508 million (2004: £6,085 million). Profit before taxation amounted to £843 million (2004: £642 million).

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Legal proceedings

The Company and its subsidiaries are defendants in a number of legal proceedings incidental to their operations. The outcome of such proceedings, either individually or in the aggregate, is not expected to have a material effect upon the results of our operations or financial position.

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Events after the Balance Sheet date

On 2 February 2006, we completed the disposal of our Europe Beverages business for a total consideration of £1.26 billion.

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Financial instruments

Information on our use of financial instruments, our financial risk management objectives and policies, and our exposure to credit and liquidity risks, are described in the Operating and Financial Review. Our exposure to cash flow and price risks are described in Note 27 and Note 28 to the Financial Statements respectively.

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Share capital

Changes in our share capital are detailed in Note 29 to the Financial Statements.

At the 2006 Annual General Meeting, renewal will be sought of the authorities: (a) for the Directors to allot relevant securities and to allot equity securities for cash other than on a pre-emptive basis, shareowners having approved similar resolutions annually since 1982; and (b) for the Company to purchase its own shares as and if appropriate, shareowners having approved a similar resolution annually since 1998. The Directors have no present intention to issue shares in the Company for cash other than in connection with its share option and incentive schemes. The authority to purchase shares has not been used since 1999.

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Corporate and Social Responsibility

Details of our Corporate and Social Responsibility activities are given in the Description of Business. We also publish a separate CSR report every other year. Copies are available from our website, www.cadburyschweppes.com, or from the Group Secretary.

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Employees

Details of our employees, including numbers by geographical region, together with statements of policy about programmes for learning and development, employee involvement, equal employment opportunities and diversity, disabled persons and pensions are given in the Description of Business.

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Charitable and political contributions

Details of our charitable contributions are given in the Description of Business.

In 2005, neither the Company, nor any of its subsidiaries, made any donation to any registered party or other EU political organisation, incurred any EU political expenditure or made any contribution to a non-EU political party, each as defined in the Political Parties, Elections and Referendums Act 2000.

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Environment

Details of our environment policy are set out in the Description of Business.

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Auditors

The Company's auditors are Deloitte & Touche LLP, who are willing to continue in office and resolutions for their re-appointment and to authorise the Directors to determine their remuneration will be proposed at the AGM.

Note 6 in the Financial Statements states the auditors' fees, both for audit and non-audit work.