Company Overview:

British American Tobacco is the world’s second largest quoted tobacco group and has more than
300 brands in its portfolio. The Group has 87 factories in 66 countries, processing some 660
million kilos of leaf and producing some 792 billion cigarettes in 2003. Its companies, including
associated companies, employ more than 85,000 people worldwide.

BAT’s Operation in Bangladesh:

The presence of British American Tobacco in this part of the world can be traced back to 1910.
Beginning the journey as Imperial Tobacco 100 years ago, the Company set up its first sales
depot at Armanitola in Dhaka.

After the partition of India in 1947, the company was established in 1949. It then became
Bangladesh Tobacco Company Limited in 1972 immediately after Bangladesh’s independence.
In 1998, the Company changed its name and identity to British American Tobacco Bangladesh
Company Ltd.

BAT’s shareholders:

BAT is one of the first companies listed on Dhaka and Chittagong stock exchanges. The British
American Tobacco Group holds 65.91% of the shares in British American Tobacco Bangladesh.
Other shareholders are the Investment Corporation of Bangladesh, Shadharan Bima Corporation,
Bangladesh Shilpa Rin Shangstha, Government of People’s Republic of Bangladesh, Sena
Kalyan Shangstha and other members of the public.

BAT’s contributions:

British American Tobacco Bangladesh is one of the largest multinational companies in

Bangladesh. Consequently, it is also the largest private sector tax payer in Bangladesh. In 2009,
BAT contributed Tk. 38.57 billion in the form of Supplementary Duty, Value Added Tax (VAT)
and other taxes to the national exchequer. Over time, it successfully established itself as the
company contributing to economic, social and human resource development. IT continue to
move forward to deliver higher promises.

BAT’s Believe:

At British American Tobacco Bangladesh, it strive to be a responsible company wherever it

operates - that may be to its shareholders, employees, business partners or any other relevant
internal and external stakeholders. To BAT, responsibility is a way of life and that is why it
believes “success and responsibility go together”.

BAT’s People:

At British American Tobacco Bangladesh, difference is its advantage and diversity is its
strength. BAT employs more than 1,189 people directly and about 60,000 people indirectly as
farmers, distributors and local suppliers. Moreover, around 900,000 retailers in the country sell
its brands to earn their living. BAT takes great pride in saying that it is one of the most preferred
employers in the country. Having people from a wide variety of cultures and backgrounds who
support each other’s success makes it unique. It is BAT’s pool of talented people who give this
place the wonderful and pleasant working environment that takes it forward every day.

BAT’s Brands:

BAT’s business is not about encouraging people to start smoking or to smoke more, but about
meeting the preferences of adults, who have chosen to consume tobacco, and differentiating its
brands from the competitors.

BAT manufactures and markets high quality and well established international cigarette brands.
Its current brands are Benson & Hedges, John Player Gold Leaf, Pall Mall, Capstan, Scissors,
Star, and Pilot, which are positioned in four segments in the Bangladesh cigarette market.

Benson & Hedges:

Launched in 1997, Benson & Hedges maintains its prime market share in the Premium segment.
Within a short time Benson & Hedges became a successful brand in BAT’s portfolio.

John Player Gold Leaf, Pall Mall and Capstan:

John Player Gold Leaf, Pall Mall and Capstan are positioned in the High segment. Launched in
1980, John Player Gold Leaf is one of the highest selling brands of our company, enjoying large
market share in the High segment. Pall Mall was the Group’s first Global Drive Brand to be
launched in Bangladesh in 2006.

Star and Scissors:

Star and Scissors are positioned in the Medium segment. Star, launched 40 years ago, is still a
leading brand in this segment. Currently, it is the highest volume generating brand for the
company.

Pilot and Bristol:

Pilot was launched in 2009 in the Low segment, which is growing rapidly in Bangladesh. Bristol
was launched also in the Low segment in October 2010.
Company Strategy:

In the early 1990s, BAT decided to grow its business by focusing solely on tobacco - a decision
which regalvanised and transformed the group. In 1995, they set themselves the credible, if
challenging, vision of regaining leadership of the global tobacco industry and established a
strategy to get there. Over the last decade, their market share has increased by nearly 50 per cent,
and they are now the second largest international tobacco group, accounting for some 15 per cent
of the global market. Key elements of that strategy are vision, growth, productivity,
responsibility and a winning organization.

Achieve leadership of the global tobacco industry   

Growth   |  Productivity   |  Responsibility

British American Tobacco is the world’s most international tobacco group, successfully pursuing
a consistent strategy that is building long term shareholder value. The four building blocks of
BAT’s strategy are Growth, Productivity, Responsibility and developing a Winning
Organization. Each is interdependent and essential for delivering profit growth and long term
business sustainability.

"We have confidence in our strategy, we believe that our business is sustainable and we expect
that British American Tobacco will continue to grow." Paul Adams, Chief Executive, British
American Tobacco.

Although BAT’s products pose risks to health and its industry can be seen as controversial, its
products are legal, calls for prohibition are exceptionally rare and about a billion adults globally
choose to smoke. BAT work continuously to manufacture and sell its products responsibly.
Through more than 100 years of operations, BAT has built a strong international reputation for
high quality tobacco brands to meet consumers’ diverse preferences.

BAT delivered significant shareholder value with a total return of 26 per cent per annum over the
last decade compared to an annual return of less than one per cent as a whole. That translates into
a return of 880 per cent over 10 years.

BAT’s Business Principles:

BAT’s Statement of Business Principles forms the basis on which it runs its business in terms of
responsibility.

The principle of Mutual Benefit:

The principle of Mutual Benefit is the basis on which BAT builds relationships with its
stakeholders. It is primarily in business to build long term shareholder value and it believes the
best way to do this is to seek to understand and take account of the needs of all of its
stakeholders.

The principle of Responsible Product Stewardship:

The principle of Responsible Product Stewardship is the basis on which BAT meets consumer
demand for a legal product that is a cause of serious diseases. Therefore, its products and brands
should be developed, manufactured and marketed in a responsible manner. It also aspire to
develop tobacco products with critical mass appeal that will, over time, be recognized by
scientific and regulatory authorities as posing substantially reduced risks to health.

The principle of Good Corporate Conduct:

The principle of Good Corporate Conduct is the basis on which all of its businesses should be
managed. Business success brings with it an obligation for high standards of behavior and
integrity in everything it does and wherever it operates. These standards shall not be
compromised for the sake of results.
Awards and recognition:

The following is a selection of awards and recognition received by British American Tobacco
p.l.c.

2010

 Named Best Sustainability Report in the FTSE 350 and of the UK's largest private companies by
Radley Yeldar, a leading communication consultancy, in their 'How Does It Stack Up,
Sustainability Reports 2010' report.
 Ranked second in the FTSE 350 for our approach to sustainability assurance in the annual Carbon
Smart ranking of assurance practices.
 Placed in the Top 3 in the 2010 PricewaterhouseCoopers' Building Public Trust Award for
Sustainability Reporting in the FTSE 100.

 Selected for the 9th successive year in the 2010 Dow Jones Sustainability World Index (DJSI
World) and the Dow Jones Sustainability Europe Index (DJSI Europe), scored on economic,
social and environmental performance.

2009

 Selected for the 8th successive year as the only tobacco business in the 2009 Dow Jones
Sustainability World Index (DJSI World) and the Dow Jones STOXX Sustainability Index (DJSI
STOXX) for Europe, scored on economic, social and environmental performance.

 Received a Platinum rating in the UK Business in the Community Corporate Responsibility

Index.  We are the first tobacco company to reach Platinum status and one of only nine new
entrants in the Platinum sector during 2009.
 Included in the Sustainable Asset Management (SAM) Sustainability Yearbook 2009, achieving
Gold Class as well as being identified as both a sector Leader and a sector Mover.

2008

 Selected for the 7th successive year as the only tobacco business in the 2008/09 Dow Jones
Sustainability World Index and Dow Jones STOXX Sustainability Index for Europe, scored on
economic, social and environmental performance.
 Awarded a Gold ranking in the 'Companies that Count 2008' list of the UK's 100 most responsible
companies, published in the Sunday Times and based on the Business in the Community
Corporate Responsibility Index.
2007

 Ranked third out of the FTSE100 companies in the Ethical Bonus Index 2007, compiled by
Intelligent Giving on how companies enable staff to donate to charity, including allowing time off
for volunteering, matching donations and running a ‘payroll giving’ service.
 Achieved a Gold ranking in the ‘Companies that Count 2007’ list of the UK’s 100 most
responsible companies, published by the Sunday Times and based on the Business in the
Community Corporate Responsibility Index.
 Earned an overall score of 98.6 per cent in the Business in the Environment Index, also run by
Business in the Community, placing us in the highest possible Platinum performance band.
 Received a 'Big Tick' Award in the Supply Chain category of the Business in the Community
Awards for Excellence, recognizing our Business Enabler Survey Tool and Social Responsibility
in Tobacco Production programmes.

2006

 Ranked in the Premier League of Business in the Community’s Environment Index, as one of the
23 companies out of 155 participants to score over 95 per cent.
 Ranked joint 31st of the top 100 companies in Business in the Community’s wider Corporate
Responsibility Index, including ‘outstanding’ scores for environmental management and
marketplace management.

2005

 Our corporate website was ranked in the Top 5 Investor Relations Websites in the UK in an index
compiled by JP Morgan, KPMG and Linklaters.

2002/03/04

 In November 2004 the UN Environment Programme (UNEP) ranked British American Tobacco
fourth among 50 corporate social reporters, adding that "the company's reporting on human rights
and community development is world class" - the Group scored 64% for its ethical, social and
environmental performance against an average score of 47%.
 Included as an example of effective corporate governance in a UK Government Department of
Trade and Industry ‘Building Better Boards’ publication published in December 2004, drawing
together some best practice recommendations and tools to help companies build better Boards.
 Won awards for Reporting of Executive Governance and Remuneration (2004) and Stakeholder
Communication (2003) in the PriceWaterhouseCoopers Building Public Trust awards.
 Investor Relations Society Best Practice Website Awards winner for both Best Corporate Website
for Analysts (2003) and Best Website for Private Investors (2003 and 2004).
  Won awards for Best First Time Social Reporter (2001/02 Report) and Electronic Media
Reporting (2002/03 Report) in the ACCA (Association of Chartered Certified Accountants) UK
Awards for Sustainability Reporting.

BAT’s corporate social responsibility:

Responsibility is a way of life for BAT. This is because BAT believes in the success that has
come to it as a result of responsible business operations.

All of its activities reflect to its belief that ‘Success and Responsibility Go Together’. Therefore,
it has in place very robust CSR initiatives. Through such endeavors of BAT, it aim to achieve the
necessary balance of sustainable environmental, social and economic development.

Afforestation:

BAT started its afforestation programme when it joined hands with the Forest Department in
1980 to conserve the forests and combat the negative impacts of climate change. Till now, it has
contributed around 67.5 million saplings throughout Bangladesh. This probably makes it
imitative the largest private sector driven afforestation programme in the country. Its endeavours
have received several awards both at the National and Local Government levels.

Primary health support:

BAT believes in adding value to the communities in which it operates. Complementing the
Government’s development efforts to attain the Millennium Development Goals (MDGs), it
provides primary health care support for 6,350 farmer families. It reaches out to these families
through a network of NGOs under the “Smiling Sun Franchise Programme”. Services include
free prescription and consultation for maternal health and child health, family planning along
with prescribed medicines at subsidized rates, and free vaccination.

Safe drinking water: ‘Probaho’:

For millions of people in Bangladesh, the only available drinking water is laced with arsenic and
therefore extremely hazardous to health. Having recognized the gravity of the issue, It has
stepped forward with the ‘Probaho’, Bangla for ‘flow’, project. Through Probaho, It aims to
provide rural communities with safe drinking water. This initiative is also aligned with the
Government’s aim to achieve the Millennium Development Goals (MGDs). Using Government
approved community based water filtration technology; its six water filtration plants provide
approximately 25,000 liters of pure drinking water for 12,000 people every day.

Sustainable agriculture:

BAT’s supply chain starts with the hard work of around 46,000 registered farmers within the
village community. Therefore, it tries its best to ensure that it sources are sustainable and
responsible. It aims to do this by proactively setting high standards for agricultural practices.
BAT’s initiatives include Green Manu ring with Dhaincha (Sesbania aculeata)- an effective
approach in enriching soil health and fertility. Dhaincha is also promoted as alternate fuel in leaf
growing areas. Moreover, we have introduced Integrated Pest Management Clubs and Farmer
Field Schools in collaboration with the Department of Agriculture Extension to educate its
farmers about the adoption of Good Agriculture Practices.

Harm reduction initiatives:

The use of tobacco products poses real and serious risks to health. The only way to avoid these
risks is not to consume tobacco at all. However, the concept of harm reduction is increasingly
being considered in relation to tobacco use and it is a key element of British American Tobacco’s
business strategy.

Harm reduction is about finding practical ways to minimize the health impact of an inherently
risky activity or behavior, without seeking to stop it entirely. An example of harm reduction in
action that is familiar to most of us is the use of seat belts and airbags in cars.

Harm reduction and tobacco:

Regulatory policies based on discouraging people from starting to smoke and encouraging them
to quit have been and continue to be effective. In the context of tobacco and health, few
governments currently support the development of reduced risk tobacco products. Most
governments simply argue for prevention and cessation.

British American Tobacco thinks it’s important to work towards producing consumer-acceptable,
potentially reduced risk products. It believes there could be further public health gains if tobacco
regulatory policies included harm reduction, for the millions of adults globally who will continue
to consume tobacco products.

Some regulators and tobacco control advocates actually reject the concept of reduced risk
tobacco products altogether, suggesting that the approach is inappropriate, as such products may
discourage smokers from quitting, or lead people to become tobacco consumers who would not
otherwise have done so.

Research and development:

The science of tobacco harm reduction is complex, extremely challenging and spans many
scientific disciplines. British American Tobacco has significantly expanded its research
capabilities over the past few years to reflect the continued importance placed on work in this
area.
BAT Bangladesh - Health and science:

BAT has long accepted that smoking is risky. Its business is not about persuading people to
smoke; it is about offering quality brands to adults who have already taken the decision to
smoke. It strongly believes that smoking should only be for adults who are aware of the risks.

Put simply, its view on smoking is this:

“We produce fine quality products that provide pleasure to many adult smokers. Along with the
pleasures of smoking there are real risks of serious diseases such as lung cancer, respiratory
disease and heart disease, and for many people, smoking is difficult to quit”.

The risks associated with smoking are primarily defined by epidemiological studies (statistical
studies in large populations) that show groups of lifetime smokers have a far higher incidence of
certain diseases than comparable groups of non-smokers. These risks tend to be greater in groups
that start smoking younger, smoke for longer, and smoke more cigarettes per day.

The statistics, however, do not tell whether a particular individual smoker will avoid an
associated disease by smoking less, and all smoking behaviors are associated with significantly
increased health risks. Studies show that the only way to avoid smoking-related risks is not to
smoke in the first place, and the best way to reduce the risks is to quit.

What people should consider about the risks:

 Smoking is a cause of various serious and fatal diseases. 

 The health risks in groups vary by the amount smoked, being highest in those that smoke for
more years and smoke more cigarettes per day. 
 The risks reduce in groups of people who quit smoking, and the reductions increase from quitting
earlier. 
 Experts advise no smoking during pregnancy. 
 The only way to be certain of avoiding the risks of smoking is not to smoke.

Can people quit?

Smoking can be hard to quit. However, BAT believes it is important that smokers who decide to
quit realize they can, provided they have the motivation to quit and the belief that they can.
Many smokers are said to be dependent on cigarettes because they know the real risks of disease
involved but still smoke frequently and find it very difficult to quit.However, millions of
smokers have quit without any medical help, and millions have modified how often, where and
when they smoke in the light of differing social norms.

Various ways have been suggested to help people quit, including using ‘nicotine replacement
therapy’ (patches and gums). While all these forms of assistance may be beneficial, the most
important factors in successfully quitting are having the motivation to quit and the self-belief that
people can do so.
What people should consider about quitting

 Smoking can be hard to quit. Any adult thinking of starting to smoke should consider that it may
be difficult to stop later. 
 For people wanting to quit, the keys are motivation and self-belief. 
 There is nothing so powerful about the pleasure of smoking that prevents smokers from quitting,
if they have motivation and confidence in their ability to do so. 
 Many millions of people have quit smoking successfully. 
 Advice on quitting smoking is available from many sources, including public health authorities
and health professionals

Conclusion:

British American Tobacco is the world’s second largest quoted tobacco group and has more than
300 brands in its portfolio. The four building blocks of BAT’s strategy are Growth, Productivity,
Responsibility and developing a Winning Organization. Its business is not about persuading
people to smoke; it is about offering quality brands to adults who have already taken the decision
to smoke. It strongly believes that smoking should only be for adults who are aware of the risks.
BAT believes in the success that has come to it as a result of responsible business operations.