1.

1 Background of the study:

The BBA program of Dhaka City College is designed to focus on theoretical and professional development of students who are open to take up business as a profession as well as service as a career. An internship program is a requirement for the completion of the BBA program. This internship program is of three months duration. This internship provides the students to link up their theoretical knowledge with the practical fields. After completing eleven semesters at Dhaka City College, under the Bachelors of Business Administration Curriculum, to complete my internship, I had been placed in British American Tobacco Bangladesh Company Limited which is one of the leading multinational companies in Bangladesh. The internship program exercises a significant importance as it enables a student to familiar with the practical business activities as well as the corporate environment. The students get the chance to work closely with the people of an organization and learn about the functions of that organization. This program enables a student to develop his analytical skill and scholastic aptitude which help him in building a potential career. Students are required to prepare an internship report under the guidance of supervising teachers on a selected subject matter to highlighting his experience and to conduct an in depth analysis on the subject matter. I have tried my level best to present my experience of the practical orientation in this report.

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1.2 Origin of the report:

To realize some thing in depth, the clear understanding of the context is utmost essential. Like all other activities, there is also an origin of the report too. My assigned topic was Corporate Culture of British American Tobacco from Secretarial point of view. From the term Corporate Culture; we generally understand how an organization performs it corporate activities and behave in a particular point of time and situation. Now question is what should be the perfect corporate culture in a company from a secretarial point of view. But unfortunately there is no such way that a person can realize and articulate the corporate culture of an entity due to the absence of clear picture in the laws, regulations and other relevant matters. In this connection I have tried my level best to work on this issue to get a fair practical exposure and this is the origin of the report.

1.3 Purpose of the Report:

Students of BBA program of Dhaka City College are required to undergo an internship program at the end of the final semester. As part of the program, I was placed in British American Tobacco Bangladesh Company Limited for a period of 3 months. This internship is an orientation to the working activities of British American Tobacco Bangladesh Company Limited and a study on a particular area. During my time of working there, I had to select an area of study on which I can make this report. From this perspective, after completion of my internship program, I have prepared this report. I have high hopes that this assignment will play a great role in building by future career.

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1.4 Objectives of the report:

All well planned activities have some ultimate targets or objectives. It is the guiding light of all predetermined activities. The prime objective of preparing this report is to sketch out the corporate scenery. This objective can be divided into two basic parts: 1. How well the company is complying with the corporate laws and regulations? This part concerns with the corporate laws and regulations. Such as: The companies Act, 1994; The SR Ordinance, 1969; The SE Rules, 1987; DSE & CSE Listing regulations; International Accounting Standards (IAS); Other laws and Negotiations;

With the analysis of Secretarial matters, Finance and Accounts and General Administrative department so as to get the fair idea about Corporate Culture of British American Tobacco whether complying with the corporate Laws and regulations or not. 2. What is the trend and pattern in Corporate Culture of British American Tobacco from Secretarial point of view?

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This part refers the trend and pattern of Corporate Culture during 2006-2010. This trend analysis will help us to make a fair prediction precisely and to formulate a review of corporate policy for British American Tobacco and also amendment and to introduce corporate laws and negotiations in Bangladesh.

1.5 Methodology:
Methodology refers how the study is to be conducted, data are to be collected, and information is to be prepared and interpreted. Without and adequate research methodology a meaningful study cannot be conducted and completed.

Data Collection and Analysis:

To conduct a study properly designing of the procedures is essential. Because the reliability and validity of the outcomes and of a study depends on the reliable data, information and the methodology that has been adopted in preparing the report. In this manner I have carried out some activities to collect data and information, they are mentioned below: a. Study design: In order to conduct this study smoothly I have designed the study procedures into three stages Searching of data Discussion with knowledgeable persons Analysis an Recommendation

b. Data Collection Method: Using interviews, discussions and close observations during the study period I have collected relevant information.

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c. Data Type: I have collected primary data as well as secondary data. But in preparing this report basically secondary data have been used.

d. Sources: The annual reports of British American Tobacco and business journals and websites are the secondary data sources. But for the theoretical discussions I have taken help from the some business journals, corporate laws and negotiations and handbook of Company Secretary of Muqtadir.

1.6. Limitations of the study:

All methodology regarding the research and study is not absolutely free from errors. There are some limitations in this procedure too. While considering this report these limitations are to be remembered in order to get a more meaningful and valid information, these are 1. The sources of data are not such absolutely reliable and smooth. Due to the lack of proper management information system, data and information are not always readily available. Thus a huge amount of time was wasted in collecting data and getting those data usable. 2. As the annual reports and business bulletins are the main sources of data these sources do not clearly reflect the real situation regarding the corporate culture. 3. The data are used in this analysis is historical in nature thus those reflect the past context rather than the present or future aspects. The reader should be careful while making decisions based on this report.

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4. Conducting this sort of research takes a substantial period of time. A period of three months time is not enough sometimes. Therefore an equal care could have hardly been taken in all areas of this report.

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An Overview of British American Tobacco

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British American Tobacco

2.1 Company Profile:
The history of BAT cannot be told without the mention of James Buchanan Duke who can be credited as the founder of BAT. His family owned a tobacco company with factories in New York and North Carolina. As development occurred in the tobacco business and as smoking in the form of cigarettes becoming popular, James Buchanan Duke decided to expand his family business. By 1890 he had joined with four of the largest American cigarette manufacturers to form the American Tobacco Company with himself as the president. After having strengthened his position in America, he then decided to enter into the British market. On September 27 1902, American Tobacco and Imperial signed an agreement to merge together as British American Tobacco Company. On 29th September 1902, this new company was formed with one third owned by Imperial and two thirds by American Tobacco. BATs first Chairman was James Duke. Thus, British American Tobacco has been in business for more than 100 years, trading through the turbulence of wars, revolutions and nationalizations as well as all the controversy surrounding smoking. Despites its name, derived from the home bases of its two founding companies, British American Tobacco was established to trade outside both the UK and the USA, and grew from its roots in dozens of countries across Africa, Asia, Latin America and continental Europe. British American Tobacco was born international, and has developed over a centurys expertise in operating locally in diverse cultures around the world. British American Tobacco is the worlds second largest quoted tobacco group occupying approximately 17.1% of worlds tobacco market with Phillip Morris having 18.7%

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market share in the first position. China having the largest market has state owned companies that produce cigarettes.

Leading Players in the World Tobacco Industry

Philip Morris, 18.70% Other (China), 48.00%

British American Tobacco , 17.10% Japan Tobacco, 7.70%

Altadis, 2.10% Gallaher, 3.10%

Imperial Tobacco, 3.50%

Figure: Leading players in the world Tobacco Industry With more than 300 brands in the company portfolio, British American Tobacco holds robust market position in each of the regions and has leadership in more than 50 of the 180 markets where it does business. The Group has 85 cigarette factories in 67 countries. The Group companies, including associated companies, employ more than 97,000 people and more than 300,000 farmers providing leaf worldwide.

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2.2.

he World of British American Tobacco

America-Pacific Middle East

Latin America

Europe

Africa

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2.3 . The Tobacco Industry:

2.3.1. Nature of the Industry:
The tobacco industry of Bangladesh is an age old industry. There a distinct monopoly in this industry where British American Tobacco Bangladesh (BATB) leads the market with more than 50% market share. The other major players are Dhaka Tobacco Industries (DTI) Alpha Tobacco Manufacturing Company (ATMC) Abul Khair Tobacco Azizuddin Tobacco

The industry is very price sensitive in nature. It is also a stick selling market, which means that most of the tobacco consumers normally buy tobacco in sticks, not in packs. These two features-price sensitive and stick selling-influences the business philosophies of the companies.

2.3.2. Industry Segmentation:

The tobacco industry can be divided into two markets-Biri market and Cigarette market. Biri Market Biri market is comprised of 72% of the tobacco market. It is basically the non-filter cigarette market with a very two pricing. So biri is by far the dominating segment in the tobacco industry. Recent trend has shown that biri market is experiencing decline which is a favorable sign for the cigarette market. BATB does not operate in this market. The major brand in this market is Akiz Biri, product of Dhaka Tobacco Industries. This is by far the most popular Biri in the country. Cigarette Market Cigarette market is where BATB has all its focus. The market covers the rest 28% of the industry. But the value of this market is lot higher than the biri market. The market can be divided into four segments on the basis of price-

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Segment Premium Medium Low Very Low

Price Range Tk.3.00-4.00 Tk.2.00 Tk.1.00 <Tk.1.00

Table I: Price Segmentation of Cigarette Industry BATB operates in the top three segments of the industry. It does not operate in the very low segment. Along with BATB, DTI and Alpha Tobacco is also a major player in the low segment.

2.3.3. Competitive Scenario in the Cigarette Market

The competition in the cigarette market is based on the price segment. There are individual competitive brands in each price segment. There is no competition in the premium and medium segment where the top International Brands of BATB dominate the market. Only in the low segment there is a competition where mainly three companies have their individual stakes and trying to take the segment leadership. In the very low segment, there is also competition among brands like Sun Moon, Five Star, Wilson, Gold Hill etc.

Segment Premium

Price Range Tk.3.00-4.00

Brands Benson & Hedges State Express 555 Rothmans John Player Gold Leaf Capstan Star Filer Navy Senor Gold Marine Sunmoon

Company BATB

Medium

Tk.1.5-2.00

BATB BATB DTI Alpha Tobacco Abul Khair Tobacco DTI Azzizuddin Tobacco

Low

Tk.1.00

Very Low

<Tk.1.00

Five Star Wilson 125 Gold Hill

Table II: Competition in Different Price Segment

2.3.4. Industry Facts

83 billion sticks contribute to Biri Market. Recent trend shows that Biri market is experiencing a declining trend. 35.5 billion sticks contribute to the cigarette market. 6.4 million adult male smokers comprises the industry. There 21 companies contributing to the industry with around 112 brands. Top 10 companies share 91% of the volume and 93% of the value.

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2.4. Corporate Profile and Background:

3.4.1 Historical Background British American Tobacco Bangladesh (BATB) is a subsidiary of British American Tobacco Group. It has been incorporated in 1972 as Bangladesh Tobacco Company (BTC). Since 1972 BATB has been operating in Bangladesh as one of the leading multinational organization. Since 1972 BATB is operating as the market leader in the tobacco industry by providing some of the most powerful global and local brands. At present BATB is the highest tax paying company, contributing around 7% of the total revenue of the Government of Bangladesh. BATB is renowned as one of the most prominent socially responsible and ethical company in the minds of the citizen. Based in England, British American Tobacco was formed at the turn of the 20th century with the objective of establishing a worldwide business. British American Tobacco is World's most global tobacco company. Today British American Tobacco sells the leading brands in over 30 markets covering 102 countries, has more than 200 brands worldwide, employs more than 55,000 people and produces some 2 billion cigarettes every day. More than a billion people across the globe enjoy smoking tobacco. One in every eight chooses a British American Tobacco brand. In order to support the company's business goals the merger of British American Tobacco with Rothmans International had been announced on 11 January 1999. This global merger was completed on 7th June 1999. This brings together the number 2 and 4 players which together will boast a combined volume exceeding 900 billion cigarettes around the world with some 120,000 employees and a world-wide market share of 16 percent (Phillip Morris has a 17 percent share). The merger is a major step forward in British American Tobaccos vision of becoming the worlds leading International Tobacco Company.

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2.4.2 BAT & BATB: The Relation The parent company of BATB is called BATCO or British American Tobacco Company. They are the major shareholders of BATB. The operations of BATB are regulated according to BATCO regulations and BATCO looks after the management aspects of BATB. BATB management is trained by BATCO and in many occasions BATCO sends their management to work in BATB. BAT industries are widely known as BATCO has two major divisions: 1. Tobacco Division 2. Financial Division With the help of the following diagram we can easily see the relationship between BATCO and BATB very clearly:

BATCO

TOBACCO DIVISION

FINACIAL DIVISION

AMESCA

BATB

Figure 1: Relation between BAT and BATB

Currently British American Tobacco Bangladesh is retaining 63% of the cigarette market in Bangladesh. British American Tobacco Bangladesh is a sister concern of British

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American Tobacco Company (BATCO). The cigarette division is known as British American Tobacco Holdings (BAT Holdings)", which operates in more than 78 countries. "BAT Holdings" is a sister concern of BAT industries - a London based world famous business house. BAT industries operate in financial services, paper manufacturing, and tobacco sector. BATCO divided its cigarette operation in five regions. They are: North and Central America Europe South America Asia Pacific AMESCA

BATB actually maintains a relationship with BATCO through AMESCA. It is actually a region of BATCO to which BATB reports. AMESCA is made up of: A = Africa, ME = Middle East, S= Subcontinent, CA = Central Asia.

2.4.3 Structure of BATB BATB is a public limited company. Management Director is the operational head and appointed by the British American Tobacco. Head of every department carries out their functions with the help of line managers. Different departments have different structure according to their function and responsibility. The Board of Directors and Executive Committee (EXCO) govern the overall activities of the company. The "Board of Directors" is composed of 10 members who are called Directors. The Chairman heads the Board of Directors. Chief Executive of British American Tobacco Bangladesh is called the "Managing Director" who is normally appointed by "BAT Holdings". Managing Director of the company is the chairman of the Executive Committee. This committee includes the head of all the functional departments.

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2.4.4 Ownership Status of the Company British American Tobacco Bangladesh is listed in the "Dhaka Stock Exchange (DSE)". It has an authorized capital of Tk. 400,000,000 of 40,000,000 ordinary shares of Tk. 10 each. British American Tobacco Bangladesh, which encompasses 62% of the shares of the British American Tobacco, London. The Government held 32% of its shares. Subsequently the government has gradually sold its holdings to different organizations of the country.

Raleigh Investment Co. Ltd. UK Investment Corporation of Bangladesh Sadharan Bima Corporation Bangladesh Silpa Rin Sangstha Government of Bangladesh Sena Kalyan Sangstha Others

65.91% 26.99% 2.86% 0.84% 0.65% 0.52% 2.23%

Table III: Ownership status of BATB

2.4.5 BATB: At a Glance Name of the Company Name of the Parent Company Formation Factory Branch in Dhaka New Factory Incorporation Change of Name British American Tobacco Bangladesh British American Tobacco Group Formation of Pakistan Tobacco Company (PTC) in March 1949 In 1954 PTC opened its first factory in Fouzdarhat, Chittagong PTC opened a branch in Moulavibazar, Dhaka in 1962 In 1965 factory was built in Mohakhali, Dhaka Incorporated in 1972 as Bangladesh Tobacco Company (BTC) In March 22 1998, BTC was renamed as British

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Nature of Business Corporate Slogan Corporate Vision

American Tobacco Bangladesh Growing and Processing Tobacco; Manufacturing and Marketing Cigarettes Success and Responsibility go together Extend our leadership through world class performance Double our net revenue by 2005 while growing our share of the total tobacco market and dominating key identified segments Table IV: BATB at a Glance

Corporate Mission

2.4.6 Physical Infrastructure The infrastructure of the company has a broader field where the company plays its important role. BATB has 6 Regional Trade Marketing Offices (RTMOs), 12 Regional Sales Depots, 1 Factory, 1 Green Leaf Threshing Plant, 7 Leaf Depots and a Head office consisting of Corporate Head office and Production Head office. The Companys Head office and Cigarette factory are located in Dhaka. A Green Leaf Threshing (GLT) Plant has been set up in Kushtia and it has started operation from April 1995. The companys products are manufactured in the factory at Mohakhali, Dhaka. The Plant Manager who reports to the Production Director at the Head Office heads Dhaka factory. The company procures tobacco leaf maintaining the international standard and it imports processed tobacco leaf for its international brands. It procures green tobacco from the registered farmers of the leaf area mainly for its local brands. The companys authorized leaf areas are located in Kushtia, Chittagong and Manikgonj. But bulk of tobacco leafs comes from Kushtia region. The Chittagong area is under development process and it now covers Rangunia and Lama. The company operates 7 leaf depots in he leaf area. 4 of them are located in Kushtia region, 2 of them are located in CDA and other 1 is in Manikgonj, The Company provides all sorts of supports to the registered growers through its depot personnel. This includes technical know how, agricultural inputs and financial assistance.

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The company performs its sales and distribution operation all over the country through its five regional sales offices. They are located in Dhaka, Khulna, Chittagong, Sylhet and Rajshahi. Each of the regions is again divided into operational areas, each of which in turn is divided into territories. To perform its sales and distribution smoothly, the company operates 10 sales depots in different locations of the country and it has 63 authorized distributors.

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2.5. Vision and Strategies of BATBC:

British American Tobacco Bangladesh is very optimistic about their future in Bangladesh as well as the world as a whole. The company has always been sitting challenging targets and achieving them at regular basis. Their vision for the future is clearly defined. The vision is to achieve Leadership of the Global Tobacco Industry- in order to create long term shareholder value. To make this vision into reality people at BATB are working on four strategies, growth, productivity, responsibility and winning organization. The vision of BATB can be both quantitatively and qualitatively described. Quantitatively, the company seeks volume leadership among the international competitors and in the longer term, value leadership. BAT recognizes that it is adult customers who will determine this and that, therefore, BAT must be consumer driven. Qualitatively, BAT seeks to be recognized as industry leaders and to be the partner of first choice for government, NGOs, investors and potential employee recruits. The company will also do this by being a responsible tobacco group, with sustainable business, outstanding people and superior products.

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2.6. Organizations Values:

2.6.1 BATBs Core Values:
BATC are committed to building value for their shareholders, and they believe there is real value embedded not only in how they run their business but in how a company is put together; in its ability to see the world as it really is; in it's ability to pick and retain talent; to build relationships of trust with consumers, suppliers, distributors and partners, and to manage high quality brands. Perhaps above all in todays economy, there is particular strength in the ability to root local businesses in a vast range of different cultures around the globe. Their guiding principles describe key characteristics of their organization, which they aim to nurture.

2.6.2 BATCs Guiding Principles:

Here at British American Tobacco we have identified their Guiding Principles which describe the core beliefs and values of their organization. They define who they are and what differentiates them - their "corporate DNA", and capture the spirit and ethos of what is a truly global company with many different forms in the 180 countries in which they operate. These principles apply to every employee in British American Tobacco, across all levels, functions and geographies, and act as a point of reference for every aspect of our working life, from communication to decision making. Their core Guiding Principles are: Strength from Diversity: Everyone can flourish and succeed in an environment which values and cherishes differences. The diversity of their people and their ideas creates opportunities and a competitive edge. Open Minded: They are open-minded and encourage everyone to contribute, by actively listening; by being genuinely receptive to new ideas and the ideas of

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Others by being open to different perspectives and by questioning and challenging the conventional. Enterprising Spirit: They strive to do different things in different ways. Freedom through Responsibility: People have the freedom to take decisions and act by accepting personal responsibility, within the parameters of the organizations strategic goals.

2.6.3. A Clear Female Voice:

Their Employment Principles clearly state that British American Tobacco is dedicated to providing equal opportunity to each employee and that their employment beliefs and standards mean in practice that they will not discriminate when making decisions on hiring, promotion or retirement on the grounds of the employees or candidates race, color, gender, age, social class, religion, smoking habits, sexual orientation, politics or disability subject to the inherent requirements of the role to be performed. In line with this principle, at British American Tobacco, individuals are nominated to fulfill speaking engagements, liaise with a wide range of external audiences (including the media) and are put forward for company awards based on their suitability for the respective event and criteria such as gender will neither positively nor negatively impact on the choice of candidate chosen for the event. At British American Tobacco, many of their most senior and prominent external-facing managers are women and as such, naturally, they are seen fulfilling a number of public speaking engagements and are seen quoted in the press on a regular basis. At their London Press Office at Globe House which fulfils a number of roles including orchestrating the Companys contact with all UK national and London-based international media, overseeing media communications on trans-national issues such as the WHOs Framework Convention on Tobacco Control and crisis communications, two of the three press officers/Company spokespeople are women.

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Since 2002, British American Tobacco has been running The Golden Leaf Award, an annual program that celebrates examples of excellence within and across Group operating companies, regions and functions. The Awards not only recognize the outstanding achievements of markets or teams but furthermore demonstrate the business impact of these achievements or behaviors and ultimately, share both success and knowledge across the Group. The award celebrates the achievement of groups of employees rather than individuals, however, many women were essential and valued members of the eventual three winning teams in 2002. In 2004 two women won the Golden Leaf Award. These women had to ensure continued delivery in the US marketplace even in the thick of the merger process.

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2.7. Organizational Policies:

Based on their values and principles they developed an Equal Opportunity Policy and various employment policies to assure diversity within the company. The policies are documented and can be accessed via the intranet. In support of women's advancement they also have in place a maternity policy. Their disciplinary policy and sexual harassment policy, for example, applies to all employees regardless of gender.

2.7.1. BATBs Employment Principles:

Based on these Guiding Principles, BATC have developed a set of Employment Principles and workplace related human rights. British American Tobacco is a decentralized group of companies and each company has wide freedom of action. However, within that framework it is their aim to apply these principles (Principles) in the key areas of employment practice: Their Four Guiding Principles Strength from Diversity: Actively utilizing diversity - of people, cultures, viewpoints, brands, markets and ideas - to create opportunities and strengthen performance. Open Minded: Freedom through Responsibility: Enterprising Spirit: Being an active listener, genuinely considering others' viewpoints and not pre-judging. The freedom to take decisions and act on them obliges them to accept personal responsibility for the way they affect their stakeholders. The confidence to seek out opportunities for success, to strive for innovation, and to accept the considered risk-taking that comes with it.

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I. STRENGTH FROM DIVERSITY:

Actively utilizing diversity of people, cultures, viewpoints, brands, markets and ideas to create opportunities and strengthen performance BAT is dedicated to providing equal opportunity to each employee. Their employment beliefs and standards mean that they will not discriminate when making decisions on hiring, promotion or retirement on the grounds of the employees or candidates race, color, gender, age, social class, religion, smoking habits, sexual orientation, politics, or disability subject to the inherent requirements of the role to be performed. A fundamental aim is to ensure a diverse and representative workforce profile through the promotion of employment equality. They shall observe national legislation relative to positive discrimination.

II. OPEN-MINDED
Being an active listener, genuinely considering others viewpoints and not pre-judging Openness and Responsiveness Internal Communications: Employees sense of belonging to, and trust in, BAT is enhanced by their focus on internal communications, a sense of pride in their brands and being part of a socially respected group of companies. They aim to be open and transparent and to provide regular, reliable and relevant business and industry- related information, through a wide range of internal communication channels to allow access for all employees. Disclosure/communication policies take into account their obligations to business confidentiality and other competitive concerns. However, subject to this, they actively encourage and

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promote the free flow of ideas and information between their operating companies and their workforce. Relationships and Partnerships: Worker Representation and Freedom of Association- they respect both freedom of association and freedom of nonassociation. They acknowledge the right of employees to be represented by local company-recognized Trades Unions, or other bona fide representatives, and for these, where appropriate, to consult with the relevant company within the framework of applicable law, regulations, the prevailing labor relations and practices, and company procedures. They acknowledge the activities of recognized worker representative bodies such as Trades Unions (where such activities are practiced in accordance with national law) and they ensure that workers are able to carry out their representative activities within agreed procedures.

III. FREEDOM THROUGH RESPONSIBILITY

We believe decisions should be pushed down the organization to the appropriate level, as close to the consumer as possible and that decision takers should accept responsibility for their decisions. Company Responsibilities Fairness at Work: They seek to encourage a climate of confidence to ensure that employees can air questions and problems arising during the course of their (workers) work and aim for quick resolution to the satisfaction of all concerned. To this end, they seek to ensure that their employees know about grievance and disciplinary procedures and how to use them. Temporary labor is an important element of the overall employment mix and essential to meet the local business requirement and cycles. Where this form of labor is used they will act at all times to conform to local labor laws and practices. BAT companies do not have a policy

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of engaging in the use of casual labor to avoid an employee receiving company and government benefits. Dignity at Work: BATC finds all aspects of harassment and bullying unacceptable and they are committed to removing any such actions or attitudes in the workplace. Restructuring: BAT undertakes restructuring in a responsible manner. Any of their global operating companies involved in restructuring will explain the initiatives that make change necessary to its employees and all appropriate groups and bodies, in accordance with local laws and regulations. They cannot offer a job guarantee for life but compulsory termination of employment is only actioned after a comprehensive review of all the alternatives. Where such situations do occur, they will adopt responsible local approaches and procedures to address each instance, including severance pay and any other such measures as may be appropriate to the situation and location.

Against Exploitation: Child labor: BAT does not condone or employ child labor. They seek to ensure that: The welfare, health and safety of children are paramount at all times. Practices undertaken by children for the development of vocational skills (e.g. in agricultural employment) do not conflict with or impede their educational development, including school attendance. The development of children, their communities and countries is best served through education. Forced labor: Bonded or involuntary labor is completely unacceptable, as is the requirement to surrender identity papers or pay deposits as a

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condition of employment. Where national legislation or employment procedures require the use of identity documents, these will be used strictly in accordance with the local legislation and procedures. We do not condone exploitation or the unlawful use of immigrant labor.

Employees Responsibilities Standards of Business Conduct: These are an integral part of their corporate governance and are designed to provide a decision-making framework for all employees. Employees are the key upholders of such standards and are expected to comply with them. Proper use of Company Systems: BAT companies deploy many systems to help in the achievement of business goals. In doing so, they entrust the use of these systems and facilities to their employees. It is the responsibility of employees to familiarize themselves with these systems and to adhere to all operational and confidentiality procedures including those concerning personal use of the systems. BAT companies will provide training in the use of their systems and policy adherence and employees should seek further training if required. The use of these systems will be monitored from time to time to ensure lawful use and purposes in Accordance with BAT policy and local legislation. Employees will be encouraged to make suggestions to improve either the training or the systems themselves. Performance Responsibility: They expect their employees to make a meaningful and confident contribution to the success of BAT and their (workers) own place within it. As such, employees will be held accountable for their performance. They therefore provide employees with clarity on their expectations of them (workers) and feedback on their (workers) performance. The mechanisms for this will be determined as appropriate at the local level. Where poor performance

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continues, despite the prior provision of opportunities for improvement, BAT companies will terminate the employment, applying the framework of applicable law and company labor relations procedures.

Mutual Responsibilities Environmental Responsibilities: BAT has in place Environmental, Health and Safety management and monitoring systems and strives to achieve annual targets and performance indicators in each of the key areas of environmental management. Both their companies and their employees have an integral part to play in the achievement and maintenance of these standards. Constructive Place in the Community: Community contribution: BAT thinks globally but it is a local citizen. As such, they encourage their employees to play an active role both in their (workers) local and business communities. The level and type of support the local company and their employees give is at the discretion of the local company. Economic contribution: BAT seeks to create opportunities for skills development for employees and communities in markets where they operate. They also aim to work in harmony with the development objectives and initiatives of host governments. Business Information Security: Business information security is a multifaceted challenge requiring effective co-operation between all parts of the business, their business partners, employees and employee representatives. Their policy embraces all elements of business information security including physical records, electronic data, e-mail, personal data held by the company, information processes and data management, legal and audit considerations and communications systems (telephones, fax, internet etc.). Their policy is to maximize the business leverage of their information, ensuring that it is reliable and available to those

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who need it. It is of paramount importance to ensure that all their employees are fully aware of their personal responsibilities in this regard. They will honor the privacy of workforce data according to the requirements of national legislation and the security and interests of the business. Personal Development and Learning: They develop and deliver high quality learning and development initiatives appropriate to the needs of the individual operating companies and their employees. They aim to foster a sense of pride in working for BAT and to be the employer of choice wherever they operate. Whilst they put great emphasis and resources in training and opportunities for development, employees are encouraged to take responsibility for their (workers) own development. Valued Business Partners Whilst they are not responsible for standards of employment practice throughout their supply chain, they seek to influence our business partners to avoid: The employment of children particularly in any industrial process, or agricultural process which uses chemicals (other than in genuine apprenticeships); The selling of cigarettes to minors; The use of forced or illegal immigrant labor; Working conditions which do not meet BAT standards on health, safety or hygiene; The denial of access to, or unfair application of, a transparent grievance procedure; Any form of unlawful discrimination, harassment, abuse or bullying. Whilst each partner organization has the responsibility to manage its employment practice in accordance with its own business standards, values and local legislative framework, they will work with them to embrace these Principles. BAT Minority Shareholding Interests: They (BATC) will draw to the attention of the Directors of companies, in which they (BATC) have a minority interest, the contents of

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these Principles and, where they do not exist already, encourage them to be adopted.

IV. ENTERPRISING SPIRIT The confidence to seek out opportunities for success, to strive for innovation and to accept the considered risk taking that comes with it. Physical and Material well-being Elements of this are:Reasonable Working Hours: It is almost inevitable that in most roles, and at certain times of the year, business needs will dictate more concentrated periods of work than at other times. However, BATC acknowledge and support the need of employees to balance work and personal interests and will encourage flexibility where possible. Family Friendly Policies: BATC encourage their markets to explore and adopt family friendly policies as relevant according to local practice. Occupational Health and Safety: BAT companies will all have, and comply with, internal health and safety policies and procedures and national regulations to ensure a safe working environment. BATC are committed to working with their employees to ensure that health and safety standards are maintained and improved. This process involves the effective application of an environmental, health and safety management and monitoring system. BATC work continuously to maximize the physical security of their employees wherever they (workers) are employed. BATC will ensure that their standards and policies are understood and training will Be provided so that all employees understand the health, safety and security issues and requirements concerning their (workers) job/position.

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Fair, Clear and Competitive Remuneration and Benefits BAT recognizes the need for their remuneration policies to be competitive and they have been designed to ensure a real differentiation amongst individuals and teams within companies, using criteria such as: qualifications, skills, performance, contribution and responsibility. BAT uses objective instruments in determining the level and seniority of roles within the business by means of a well-defined method of job evaluation, which defines roles, scope and subsequent salary positions and ranges. These are then compared against the local labor market to ensure their competitiveness. Prevailing market conditions are a key point of reference for establishing remuneration in each operating company. BAT will comply with legislation imposing a national minimum wage; however, their strategy will be to ensure that their reward levels are highly competitive within the local area. BATC use remuneration and reward as an active tool to build and maintain a high performance, highly motivated culture. Their approach is based on a mix of financial and non-financial, long and short-term incentives. Each operating company has the opportunity to structure their reward and benefits packages according to local circumstances. All employees are provided with clear information for each pay period, including any and all deductions from their pay. Talent, Performance and Equal Opportunity Where possible BATC fills vacancies internally, although they will seek out external talent as this provides the opportunity for fresh thinking, new ideas and experiences. Their recruitment strategy is based on retaining and attracting the most suitable people at all levels of the business and this is reflected in their objective approach to recruitment and selection. The approach is based on the inherent requirements of the job (both now and in the foreseeable future), matching the ability and potential of the individual.

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2.8. Product &

Service:
2.8.1 International Brand:
As a major international Fast Moving Consumer Goods (FMCG) company, BAT are proud of their reputation for producing high-quality brands that are chosen by one in eight of the worlds adult smokers. Their four Global Drive Brands - Dunhill, Kent, Lucky Strike and Pall Mall - account for 26 per cent of our global volumes and grew by 16 per cent in 2008.

Kent was introduced in America in 1952 and is now sold in more than 75 countries. It is our largest premium brand. Annual sales exceeded 63 billion in 2008, up 18 per cent on 2007 and its sixth consecutive year of double digit growth. Key markets include Russia, Japan, Eastern Europe and Chile. Kent Nanotek, a superslim king size variant, is sold at a premium to the main range and accounts for around 10 per cent of Kents global sales volume.

Dunhill, which celebrated its centenary in 2007, sells in more than 120 countries. Dunhill offers a range of premium and super premium cigars and cigarettes. 37 billion

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cigarettes were sold in 2008, up 7 per cent on 2007. Key markets include Australia, Malaysia, South Korea, South Africa and Taiwan.

Lucky Strike, launched in 1871, is one of the oldest and most iconic trademarks in the world. Its a premium brand sold in more than 65 countries. Volumes rose 9 per cent in 2008 to 25 billion cigarettes. Key markets include Germany, Spain, Japan, France and Argentina.

Pall Mall was introduced in 1899 and is now sold in more than 85 countries. It is our leading global value-for-money brand. Pall Mall volumes grew 22 per cent in 2008 to 62 billion cigarettes. Key markets include Germany, Italy, Russia, Uzbekistan and Pakistan. While the Global Drive Brands remain central to our strategy, we are also increasing the profile of Vogue and Viceroy.

Vogue is a super premium brand selling in more than 55 countries. Key markets include Russia, South Korea, France, Poland and Japan.

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Viceroy is sold in more than 40 countries. Introduced in 1936, key markets today include Romania, Russia, Poland, Uzbekistan, Turkey and Argentina.

Other famous international brands, familiar to smokers around the world, include:

Rothmans was launched in 1890 and is now sold in some 60 countries. Key markets include France, Italy, South Africa, Saudi Arabia, Yemen and Egypt.

Kool was introduced in 1933 and is among the world's biggest selling menthol cigarettes. Kool is sold in some 20 countries and is very popular in Japan, the United States and Latin America.

Benson & Hedges cigarettes were created for the Prince of Wales in 1873. British American Tobacco acquired the rights to the brand in a large number of overseas markets in 1956. Today, our companies sell Benson & Hedges in more than 50 countries outside the European Union, including Nigeria, Australia, New Zealand, Bangladesh and Malaysia.

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State Express 555 was launched in 1895 and is now sold in more than 20 countries. The brand is particularly popular with smokers in China, Taiwan, Cambodia and Vietnam.

Peter Stuyvesant was first launched in South Africa in 1954 and then internationally in 1957. Now sold in around 30 countries, Peter Stuyvesant is popular in South Africa, France, The Netherlands, Greece, and Malaysia. Snus is currently being test-marketed under the Peter Stuyvesant brand by our company in South Africa.

John Player Gold Leaf is sold in 12 countries and is particularly popular in Pakistan, Bangladesh, Sri Lanka and Saudi Arabia. The brand dates back to the 1890s. We do not own the brand in the UK, Europe or the United States. 2.6.2 Brands in Bangladesh

British American Tobacco Bangladesh operates in key segments of the cigarette market of Bangladesh with drive brands like Benson & Hedges, John Player Gold Leaf, Pall Mall, Star and Viceroy.

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Benson & Hedges cigarettes were initially made for the Prince of Wales back in 1873. British American Tobacco acquired the rights of the brand in a large number of overseas markets in 1956. Today, British American Tobacco Group companies sell Benson & Hedges in more than 80 countries in the world. In Bangladesh Benson and Hedges was launched in 1997 and it is dominating the premium segment of cigarettes in Bangladesh. B&H has a value of TK 4/ stick and can be found in two different flavors, Special Filters and Lights. John Player Gold Leaf is one of the oldest brands of BATB in Bangladesh that was launched in 1980 and one of the highest selling brands in the Medium Segment in the market. JPGL is mostly found in the Saudi Arabia, Pakistan and Sri Lanka. JPGL has a value of TK 2.5/ stick.

Pall Mall is an International Brand operating in more than 60 countries in the world. Pall Mall is the First Global Drive Brand launched in Bangladesh in March 2006. Even though Pall Mall is a premium brand worldwide but it is under Medium Segment in Bangladesh. Pall Mall has a price of TK 2/ stick, and can be found in three flavors, Full Flavor, Lights, and Menthol. Pall Mall made record sales in terms of volume in 2007 that was initially maintained by Star brand of BATB.

Star, a local Brand launched 40 years ago still generates leading sales in terms of volume. Star operates in the Low Segment and has a price of TK 1.5/ stick. Star occupies the leadership in the low segment outside Dhaka, where it has tremendous popularity among smokers.

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BATB launches colorful new packets for star during the Spring Season in Bangladesh to represent the true colors of Bangladesh.

Viceroy a newly introduced cigarette in the Bangladeshi market was launched in 2007. Viceroy operates in the Very Low Segment with a price of TK 1/ stick. Viceroy was introduced to Bangladeshi market considering the demand for a low price cigarette by the lower income group smokers who represent a majority of market share and to provide the consumers with the smooth taste of premium cigarettes.

And British American Tobaccos latest cigarette in the Bangladesh market is Gold Flake which is launched in July 2009. With a view to operate in the lower segment Gold Flake is priced at TK 1.00/ stick.

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2.9. Organizational Structure in BATB:

2.9.1 The Departments
BATB has very organized departmentalization with in the organization. There are six departments that perform all the activities different activities regarding the whole business process of BATB. The department structure is as follows:

OPERATIONS

MARKETING

LEAF

FINANCE

BATB Corporate Headquarter

LEGAL HUMAN RESOURCE

CORPORATE AND REGULATORY AFFAIRS (CORA)

INFORMATION TECHNOLGY

Figure 2: Departments of BATB

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2.9.2. The Organogram

The organizational hierarchy of BATB starts with the Managing Director and Deputy Managing Director. There is an executive committee in BATB which comprises of MD, DMD and the Head of Departments. The organizational hierarchy is as follows:

Managing Director

Deputy Managing Director

Head of HR

Head of IT

Head of Marketing

Head of Finance

Head of Operation

Head of Leaf

Head of CORA

Figure 3: Organizational Hierarchy of BATB

2.9.3

Corporate & Regulatory Affairs (CORA)

In a world where societys expectations of multinational companies have become increasingly high, many companies recognize that they must earn trust and reputation and cannot take it for granted. In particular, CORA works with the business to:

Ensure the principles of Corporate Social Responsibility are embedded in every Develop a comprehensive best practice approach to Social Reporting put

function and driven with integrity;

simply, a process for listening and responding to our stakeholders;

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Communicate widely, clearly and openly to ensure we are becoming known as a Understand the complex political and regulatory framework in which we operate

responsible tobacco company;

and to engage with governments and key bodies in support of our desire for a regulatory environment in which the business can compete and prosper; and

Build and manage relationships with British American Tobacco Bangladeshs key

stakeholders, including governments, the media, scientists, consumers, business partners, investors, employees, Non-Government Organizations, local communities and many other groups. Our approach is to build effective networks through open, constructive dialogue. Structure of CORA The Corporate and Regulatory Affairs Department programs are lead by the Head of Corporate Affairs who is assisted by the Company Secretary and the CORA Managers. The companys Legal and secretarial function also reports in to the Head of CORA.The Company Secretary looks after the legal sides of the company such as trademark Protection, Infringement of Company Rights, Distributor Agreement, and Trust Fund etc. He also looks after the share market activities of BAT shares. The organogram is given below-

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Head of CORA
Coordinating Officer

CORA Manager, Economic Issues

Company Secretary

CORA Manager, Social Responsibility

CORA Manager

CORA Manager, Shareholder Communication

CORA Marketing Manager

CORA IT Manager

Asst. Co. Secretary

Executive, Legal and Regulatory Affairs

Executive, Share and Agreement

CORA Manager, External Communication

CORA Executive, Internal Communication

Confidential Assistant

Public Relations Officer

Executive, Media Relations

Figure 15: CORA Organogram

2.9.4

Finance:

In a competitive business environment, a commercially astute finance function is critical for making good business decisions - for example - about which brands or countries to invest in, in evaluating and improving returns and of course, in managing the delivery of consistent profit growth to the shareholder. Functions of Finance Department

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Finance company assets, personnel and operational facilities of the cigarette factory, leaf factory and head office. Prepare and verify consolidated financial statement of all units of the company. Monitor and control all financial activities of the. Monitor sales collections. Process Management information. Structure capital policy. Carry out by auditing internal and external auditors.

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The Structure of Finance Department

Head of Finance CORA Finance

Support Finance

Internal Audit Manager

Budget Manage r Deputy Corporate Finance Manager

Senior Corporate Finance

Brand Marketing Finance Trade Finance Manager Leaf Finance Production Finance

Deputy Corporate Finance Manager

Treasury Manager

Billings &

Taxation Manager

Product Costing Manager

Deputy Treasury Manager

Figure 7: Finance Organogram

The Supporting Finance managers, Audit Manager and Treasury Manager assist the Head of Finance. The Finance Department comprises of six areas. They are: Treasury: Corporate (L/C opening, fund management, banking relationship etc.) Core Finance and Management Accounts: Corporate Marketing Finance: Supporting Excise Management: Supporting Taxation: Corporate Audit: Separate Insurance: Corporate

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The Core Finance and Management Accounts activities includes monitoring and controlling all the Accounting and Financing activities of the company such as product costing, invoice pricing, taxation etc. Audit Manager manages all the internal and external auditing of the company.

2.9.5. Human Resource Department

BATB believes in the strength of human resource and uses the modern concept of resource utilization. Every job description is carefully designed and modified under dynamic environment. The company believes in the concept of best fit and trains and develops company personnel as the key human capital of the company. The Human Resource Department thus concentrates all its activities for the development of human resource for the benefit of the company. The department also believes in maintaining harmonious relationship between the management and workers all the times. The department ensures that managerial development contributes to organizational development. The departments various activities cover setting criteria for the selection procedures. Interview techniques, training standards etc. According to the BAT policy guideline, the department maintains the personnel through formulation policies on wages, fringe benefits, annual leave, training calendar, provident fund, performance appraisal etc. Remuneration is managed centrally and there is never any negotiation but settlement. It also settles with the trade union for Long Term Agreement (LTA) between management and workers and the collective burgeoning agents. The concept behind the industrial relations is always win-win situation.

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The Structure of Human Resource Department

Head of Human Resource Coordinating Officer

Human Resource Development Manager

Human Resource Manager: Production

Resource and Remuneration Manager

Human Resource Manager: Leaf

Training Manager

Industrial Relations and Welfare Manager

Human Resource Services Manager

Employee Relations Officer

Payroll & Funds Manager

Production Training

Figure 8: Human Resource Organogram

and

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2.9.6. Marketing
The Structure of the Marketing Department Marketing is The Department of BATB. The marketing department has recently been rebuilt by merging brand marketing and trade marketing. Earlier these two were individual departments. But now with the Power of One theme the brand and trade department has formed a very efficient marketing department. Marketing Mission We will grow to 60% volume share by 2010 while Owning IB (i.e.100%) Dominating ASU 30 (i.e. more than 60%) Leading DVFM (i.e. more than 50%)

The marketing department can be divided into three sub departments-

Marketing

Brand Marketing

Trade Development Team

Trade Marketing & Distribution

Figure 9: Marketing Department Structure

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Brand Marketing The Brand Marketing department concentrates on satisfying consumers needs from within the brand portfolio. Once consumers needs are understood and evaluated, brands can be made available, accessible and desirable through strong, consistent communication. The brand marketing elements covers the adopting of products, logistics and brand marketing policies that best meet the needs of particular trade channels and strategic customers. The Brand Managers and Brand Executives are responsible for the allocated brand(s). They are responsible for all type of brand management activities. Brand Marketing Organogram

Head of Brand Marketin Coordinatin g Officer

CORA Marketin g

Senior Brand Manager VFM

Group Brand Manager

Senior Brand Manager DVFM

Marketing Intelligence Manager

Product Development Manager

Brand Marketing Finance Manager

Brand Manager JPGL Brand Executiv e JPGL

Brand Manager B&H

Assistant Marketing Intelligence Manager

Figure 10: Brand Marketing Organogram

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Trade Development Team (TDT) This department works in between the brand and trade department in a view to facilitate and coordinate the activities from the two ends. TDT performs different functions like channel management, cycle planning, merchandising etc. Channel Development: There are three types of channel outlets where cigarette is sold. This is classified on the basis of quality, authority, environment etc. Convenience Grocery Horeca

Volume Class Outlets: The cigarette selling outlets are classified on the basis of their daily sales of cigarette. Volume Class 1 2 3 4 5 6 7 8 9 Stick Sales/Day 54795+ 27397-54794 13699-27396 5479-13698 2740-5478 1370-2739 548-1369 274-547 Below 274

Table VII: Volume Class Outlets Cycle Planning: Cycle planning is a process by which a particular brands message is designed and communicated to the trade and consumers. Usually, a particular brand cycle continues for at least a month. It can also be for 2/3 months. Cycle communication is implemented through the TM&D level. Merchandising: Merchandising can of different type. It can be permanent or temporary. BATB uses a combination of these two categories of merchandising.

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Permanent Merchandising In store merchandising: e.g. Street Cabinet On store merchandising: e.g. Fascia Out of Home (OOH): e.g. Billboard

Temporary Merchandising Point of Purchase (POP): Bunting, Dangler, PVC

Trade Marketing and Distribution (TM&D) TM&D carries out the activities like ensuring proper distribution and reach of the brands in the market, implementing promotional campaigns and brand communication programs. Trade Marketing Operational Hierarchy

Head of Trade Marketing

National Sales Manager Regional Manager Area Manager Territory Officer Six regional managers

Two area managers under each regional manager

One for each territory

Figure 12: Trade Marketing Operational Hierarchy

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Channel of Distribution

Factory

Sales Depots

Internal Carrying Agent

Distributors

Retailer

Cash & Carry

Consumer Figure 13: Channel of Distribution Regional Go-down: There are five regional go-down through out the country to fill every regional demand just at the time of need, and to overcome various uncertainties related to physical distribution of products, every regional godown is directly controlled by separate Regional Manager to face the regional physical distribution challenge. Carrying Contractor: They are the party engaged in the physical movement of cigarettes from head office godown to regional office godown. Normally they are the truck owners who take all the risk and responsibilities of physical movement of goods between two warehouses. Distribution Warehouse: All distributors have their own warehouse, where cigarette can be kept safely while not degrading its product quality.

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Distributors buy the cigarette from BATB and from that point ownership and all responsibilities of the products go under the distributors. Internal Carrying Agent: They are like carrying agent but carry small volume of products. Normally they are local truck owners. They carry products from, regional godowns to distributor warehouses. They also take al the responsibilities and risk engaged in physical movement of products. Opening Stock at Distributors Office: Apart from the warehouse, every distributor also maintains another stock at their office. This stock is for maintaining any change in market demand instantly. Dealers sometimes sell cigarette through their counters to face special situation. Delivery Van: All the delivery vans are owned by the dealers to assure the supply of cigarette on the door of wholesalers, cash & carries and retailers just according to their demand. There are two types of delivery vans. One is Scooter van and another is Rickshaw van. Cash & Carry: They are businessmen who sell cigarette directly to consumers and at the same time they sell cigarette to the retailers. Retailers: Retailers are at the end of the physical distribution system of cigarette selling products directly to the consumer.

2.9.7.Information Technology
Information Technology department was mainly acting as a supporting service for all the other functions of BAT. As the emergence of super information highway and other technological advancement made the business world more competitive, BAT also made necessary adjustments towards the changes and in continuation with that process IT was made a separate department in February 2000. The head of IT is also a member of the executive committee and he is supported by the function support IT managers.

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IT Organogram

Head of IT

Technology IT Manager

Services IT Manager

Marketing IT Manager

Operations IT Manager

Corporate IT Manager

Leaf IT Manager

Logistics IT Manager

Systems Administrati on Manager

Assistant Manager, IT Services Assistant Manager, IT Services

Quantum System Manager

Communicati on & Group Working Manager

Figure 14: IT Organogram

Three Local Area Networks (LANs) have been set up in the Head Office to channel necessary information among the Head Office, main Factory and Kushtia leaf factory. Three LANs are connected via a Wide Area Network (WAN). BAT has a private E-mail network through which management personnel can deal with each other even with the foreign suppliers.

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2.9.8.Production Department
The Head of Production looks after the production and takes necessary steps to smooth out the production process. The entire production process is performed at the Dhaka Factory. The motto of Production Department is to ensure the high quality and productivity steadily for the last few years. The production department has been very successful in meeting the challenges and the company now produces a wide range of filter cigarettes to meet the market demands. All the local brands are now available with its international brands. Existing Production Facilities Capacity Output: The countrys biggest manufacturing plant is owned by BATB with a capacity of 80 million (rounded) sticks of cigarettes per day in 3 shifts. Actual Output: Presently the factory is producing 60 million sticks per day hence they need 70.000 kg of tobacco leaf. Reasons for the difference: The market is the main reason for the difference between actual and capacity output. Wastage is approximately 4% - 5% of the tobacco leaf used and it occurs in three from namely - rejection, yield loss and accountable loss. Raw Material Used: The following table summarizes the raw materials used for producing cigarettes. The procurement sources are shown in the same table. Raw Materials Bulk Tobacco Blending Tobacco Cigarette Paper Filter Material Packing Material Source Locally produced in leaf areas Imported Imported Imported Local

Table V: Raw Material Procurement Sources

Annual Cigarette Production

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Cigarette (in million Stick) Pipe tobacco (in Kg)

2007 9,604 35,000

2008 12,723 -

2009 15,070 -

Table VI: Annual Cigarette Production Production Process The Primary Manufacturing Department: The primary manufacturing department (PMD) is responsible for further conditioning the domestic and important tobacco to make it ready for production. The tobacco passes through a set of integrated and regulated machinery whose purpose is to blend the different 'packing grades' in specified proportions, convert the bales into 'rag' suitable for use in cigarettes, and bring tobacco to a uniform temperature and moisture. The Secondary Manufacturing Department: The secondary manufacturing department (SMD) uses the tobacco that is blended and conditioned by the PMD along with wrapping materials to manufacture cigarettes. The PMD delivers its final processed tobacco to the Cut Tobacco Store (CTS). The CTS has a 50-ton storage capacity and the tobacco is stored there typically for one and a half days before it is used. The SMD brings in the processed tobacco from the CTS as needed for production along with wrapping material. Currently there are 16 cigarette-making machines at Dhaka factory, which are operated in three daily shifts. Shift engineers and officer's monitor shift activities to ensure quality production. The flow of tobacco and cigarette paper to the cigarette making machines are regulated by six (programmable Logic Controlled) PLC controlled feeders. These feeders send in the required quantities at the right time to ensure smooth production. Each brand of cigarette is monitored by a separate feeder. In addition to the tobacco and cigarette wrapping material, filter rods are fed into the machines for cigarette production. The machines combine these three inputs to generate cigarettes as output. Defective cigarettes are either identified manually or by built in sensors and removed from the production flow. The tobacco from these wastes is removed and reused for cigarette production. The manufactured cigarettes are deposited in trolleys and carted to the packing machines.

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There are currently 18 packing machines at Dhaka factory. These machines are equipped with the wrapping material used to pack the cigarettes. Almost all of the wrapping materials used are imported. Local companies, however, conduct the printing work that is required. The manufactured cigarettes are fed from trolleys into the packing machines, which generate the packed cigarette as output. The flow is monitored closely to identify and eliminate defective products. In addition to the cigarette manufacturing and packing machines, Dhaka factory has two Secondary Production Units (SPU). These are used exclusively to produce the State Express 555 and John Player Gold Leaf brands. These modern production lines are different from the other machinery in that both cigarette manufacturing and cigarette packing can be conducted in one process flow. This reduces the time needed to manually put the cigarettes into trolleys and cart them to the packing machinery. The SPU makes approximately 8000 cigarettes per minute. Defective cigarettes are detected by sensors in the machines and are removed automatically. In addition manual checking is conducted for quality control purpose.

2.9.9

Legal and Secretarial

Legal and Secretarial functions are considered as the first line of defense and an essential business process of the company. The major activities of Legal and Secretarial includes litigation management, combat-illicit trade, trade marks & agreement management, inhouse legal counsel, share management which is listed with two stock exchanges and operating under central depository system, company secretarial function, records management, shaping regulatory environment, trust fund management, policy compliance etc. Legal and Secretarial function also drives to ensure Corporate Governance in the company.

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2.9.10.

Supply Chain

Operations function is at the heart of BATB business, so BATB invest substantially in people and technology to ensure that the processes are state-of-the-art, highly flexible and responsive to the needs of customers and consumers alike. Working in operations means constantly having to balance the demands of availability, quality and cost. BATB people operate in a high speed environment and under tremendous pressure, so they need the strength of mind to make quick decisions, often basing them on limited information. They also need to be open to innovative solutions that can improve the processes. Manufacturing within British American Tobacco Bangladesh includes: Product knowledge Process and control Knowledge of technologies Quality Supply chain management Regulatory framework Employee relations Excise Environmental, health & safety Project management Commercial awareness

2.9.11.

Leaf

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The Leaf Department is responsible for purchasing, processing, packing, shipping, and storing leaf tobacco for BAT Bangladesh. Essentially, it is the Leaf Department's job to ensure a secure, continuous and consistent supply of tobacco at the best cost and right quality (as required by BATB Blenders) to maintain the correct taste of final products for the consumer. Therefore, the Leaf Team's skills make a significant contribution to the ongoing success and reputation of BATB brands, as well as the Company's position as market leader. The Leaf arena within British American Tobacco Bangladesh includes: Managing a tobacco growing programme Processing tobacco in a Green Leaf Threshing plant Blending tobacco for the cigarette business Purchasing tobacco from all over the world

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3. Secretarial Matters:
1. Introduction 2. Company Secretary 3. Secretarial works Relating to Board Meeting 4. Secretarial works relating to AGM 5. Master file for AGM 6. Directors folder for AGM 7. List of documents and stationery for AGM 8. Share Management System and MIS 9. Corporate Annual Report 10. 11. Chairmans Statement Directors report

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3.1. Introduction:
Secretarial department is a very important department in a limited company. Generally this department plays various roles through Company Secretary, such as legal, mandatory, ministerial, and administrative. British American Tobacco has one Secretarial department and it has two sections. One is called LEGAL and other one is called SERETARIAL. The organogram of the secretarial department of British American Tobacco is given below: Head of Legal & Co. Secretary BATB

Coordination Officer BATB

LEGAL Corporate & Commercial Counsel BATB

SECRETARIAL Deputy Co. Sec & Records Manager BATB

Litigation Counsel BATB

Shares Executive BATB

Trademark & Agreement Manager BATB

Shares and Records Management Executive BATB

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3.2. Company Secretary:

Company secretary can be defined as a person who is a member of Institute of Chartered and Secretary and Managers of Bangladesh (ICSMB), appointed to perform the duties which may be performed by a secretary under the Company Act 1994 and any other ministerial and administrative duties. Sir Edwin said, A good secretary endeavors to hide his employers defects by allowing his virtues to appear in the full light of the day/ he shields him aside from ubiquitous interviewer and the garrulous inventory who boats a remedy for every works that keeps him from the things he need not know, and acquaints him only with such thing he ought to know. In short, he is a man of discernment, discretion and tact.

Appointment of a Company Secretary:

Usually there is a specific section in the current company low of most commonwealth countries providing that Every Company must have a Secretary. In those countries the Articles of association normally gives directions of the appointment and removal of the secretary and to fix remuneration. In Bangladesh Secretaries are appointed in the same manner as other staffs are appointed. Generally the promoters appoint the first secretary if the company at the pre incorporation stage. After the registration of the Company this appointment should be ratified at the first meeting of the Board of Directors by a resolution. The said resolution may be worded as follows: RESOLVED that Mr. X, AICS, be, and is hereby appointed secretary of the company at a monthly salary of Tk. .exclusive of other allowances applicable as per company rules.

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Part time Secretary: A part time secretary is one who accepts appointment as a secretary in mote that one company. Director as Secretary: A director of the company may be appointed as secretary provided consent of the Company has been obtained by passing a resolution to this effect in General Meeting as per section 104 of Companies Act, 1994. General Legal Position: In accordance with Companies Act, 1994; the legal position if a company secretary be as follows: A servant of the company An agent of the company An officer of the company

Finally, I would like to say, some organ grams of the company and activities of the company Secretary give the position to the Company Secretary as next to MD or CEO because a company secretary represent the Board of a company.

Responsibilities of a Company Secretary:

The Company Secretary is responsible for: Any lapses, frauds, or wrong doings in the course of his employment. Maintenance of strict secretary affairs, of the Board and, of the Company.

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Circulation of notice of meetings. Filing various statutory returns in due time. Maintenance of various statutory registers.

Duty of a Company Secretary:

The duties of a Company Secretary are given below: 1. Protect and safeguard such interests of the company at all levels: legal statutory, administrative, arbitration and in other policy matters. 2. If allowed he can --- Convene meeting in time Sign notice of such meeting Watch that the notice are dispatched properly and timely Send the accounts to the members Make sure about the quorum Prepare minutes timely and correctly

3. See various deeds, contracts, and agreements, where the company is a party, are properly framed, worded and terminologically in order and sign of such agreements, if he authorized, or at least a knowledgeable witness. 4. Prepare allotment list, process the share transfer instruments and print or make out the definitive share certificates for approval of the Board.

Liabilities of a Company Secretary

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The company Secretary has got same specific liabilities within the framework of the companies Act, 1994 (though not explicitly assigned), which may be called the statutory liabilities. These liabilities are:

To submit the statutory report as and when required To hold the Annual General Meeting To file the annual list of members and summary of share capital together with the authenticated Balance Sheets and the Profit and Loss accounts.

To issue dividend warrants, bonus share certificates and make arrangement of for disposal of fractional shares, if any; To record proceedings of meetings and to maintain the minute books. To make arrangements for inspection of minutes and provide copies thereof, if so requested by members. To comply with the requirements to paint and affix the company name and address outside office and make out rubber stamp and embossed Common seal of the Company

To affix the requisite stamp duty on various documents of the company as per the Stamp Act To arrange audit of accounts and prepare accounts as per stature. To arrange to file income tax returns every year and also to the same assessed by the authorities.

The Company Secretary is, however, not liable for any wrong, misdeed, or fraud.

What the Secretary can not do:

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The secretary is regarded, on the other hand, as a servant, while on the other, as an agent of the company. However, measuring from the orthodox angle, he has got the some working limitations.

The Secretary can not

Assume any executive or managerial powers without express authority from the Board. Represent the Company without knowledge about the Directors. Bind the company by a contract on his own. Propagate for sale of companys shares. Strike out or register a transfer unless approved by the Board. File a suit on behalf of the Company.

But times has changed quite a lot and now a days in a modern Company the Secretary has got a far wider range of duties an responsibilities.

3.3. Secretarial Works related to Board Meeting:

Generally the Company Secretary of British American Tobacco performs various works related to Board Meeting. These are as follows: Preparatory work relating to Board Meeting. Notice for Board Meeting. Preparation of agenda. Notes to the agenda. Drafting of Minutes and its maintenance. Post meeting week. Drafting of Directors report. Recent trends in Boards Report. Preparatory notes for the preparation of Chairmans Speech.

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 Recent trends in Chairmans Speech.

3.4. Secretarial Works related to Annual General Meeting (AGM):

Generally, the company secretary of British American Tobacco, through secretarial department, performs the following duties:

Duties before AGM:

Open a master file for AGM. Prepare annual draft accounts with the Finance Department. Prepare a draft of Directors Report consultation with the Chairman. Arrange a Board Meeting for passing the following businesses: 1. To receipt and approve the draft accounts as per sec. 189 (3) of C.A. 1994. 2. To recommend payment of dividend. 3. To recommend appointment of Directors under rotations. 4. To recommend appointment of auditors and fix their remuneration. 5. To approve the Directors Report. 6. To fix the date, time and place of Annual General Meeting (AGM). 7. Other ordinary business. Inform Security Exchange Commission (SEC) and Dhaka Stock Exchange (DSE) about Board decision related to AGM. Authenticate the financial statements as per section 189(1) of C.A. 1994.

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See the Auditors Report. Make arrangements for printing of Annual Report. Send notice to members. Prepare the list of proxy form. Prepare the speech of the Chairman. Prepare dividend list. Close the member register. Notice publish in newspaper. Collect offer letter from the auditors. Collect the consent of directors. Prepare folders of Directors. Prepare Name Plate, Banners etc. Prepare the list of documents and stationery for holding of AGM. Make seating arrangements for AGM. Arrangement for refreshments.

Duties at the AGM:

Check the documents and stationery for holding AGM as per list. Record the presence. Ascertain the quorum. Read notice. Read Auditors Report. Assist the Chairman. Prepare the notes of AGM.

Duties after the AGM:

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Draft the minutes. Make arrangement for the issue of dividend warrants. File copies of annual accounts with register. Prepare annual return. Implement the resolutions.

3.5. AGM Master File

AGM Master File means a file, for the AGM, in which every document in relation to AGM is kept. This file is so important for the secretarial department. Generally the following documents exist in the AGM Master File:

Minutes of Board in relation to AGM. Letter to SEC, DSE to inform them of the following matters: 1. Date of AGM 2. Time of AGM 3. Place of AGM 4. Dividend percent

Annual Report. Auditors Report. Offer letters. 1. Auditors 2. Directors

Share Summary statements. Schedule of AGM program. Schedule of committees to conduct AGM. Folders of Directors for AGM.

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Other papers relevant to AGM.

3.6. Directors Folder for AGM:

Directors folder is a folder, which is prepared by the secretarial department for the chairman and directors to exercise control of AGM program systematically. Despite being a very old practice in the corporate culture, the secretarial department of British American Tobacco prepares this Directors folder artistically with full of necessary information to conduct the Annual General Meeting (AGM) as per program. Generally the following documents are included in the Directors Folder:

Program of the AGM. Proceedings of last AGM, with item -1 being on the agenda. Annual Report for the AGM with item -2 being on the agenda. Offer letters to the directors for election, with item 3 being on the agenda. The recommendation of the Board to declare dividend, with item 4 being on the agenda. Offer letters from the proposed Auditors with item 5 being on the agenda. Working papers.

3.7. List of Documents and Stationery for the AGM:

A number of necessary documents and stationery are used to carry out smooth operation of AGM. Without those it is impossible to conduct the meeting. The secretarial department of British American Tobacco generally prepares a detail list of relevant documents, papers, and stationery before the AGM to make them available at the meeting with due care. These are as follows:

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1. Memorandum and Articles of Association. 2. Finance Act. 3. Companies Act, 1994. 4. Previous Annual Report. 5. Half yearly Report. 6. Offer letters to the directors. 7. Offer letter to the auditors. 8. Original copy of Auditors Report. 9. Prospectus. 10. SEC rules, ordinance, and Notification. 11. DSE and CSE rules. 12. Bangladesh Gazette. 13. Folders of Directors for AGM. 14. Board Minutes in relation to AGM. 15. Master file for AGM. 16. Name plates. 17. Banners. 18. Attendance Slips. 19. Working papers. 20. Staplers. 21. Glues. 22. Signature pens. 23. Wood pencils. 24. Gems Clips. 25. Calculators. 26. Slip pads. 27. Sharpeners. 28. Proxy Form. 29. Maulanas Remuneration. 30. Drinking glass and boiled water.

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3.8. Share Management System and MIS

The Secretarial Department of British American Tobacco is marching with the present development of Information Technology (IT). At present the share department uses Share Management System (SMS) and Management Information System (MIS) to perform the following functions:

In regard to public issue of securities. Recording of application. Scrutinizing and sorting applications. Printing of allotment advice and preparing mailing list for dispatching. Creation of ledger folio numbers. Printing of covering letters for dispatching of share certificates. Recording day to day transfers. Calculations of dividend and interest. Printing of mailing list for various communications. Recording of change of members addresses and printing of lists for communication. Recording of minutes. Recording of splitting of share certificates. Preparation of shareholding patterns and various Management information data. Processing of proxy. Preparation of annual return and various information relating thereto. Preparation of unpaid dividend list. Preparation o distribution schedule. Data relating to Debenture holders. Documentation and filling of secretarial works. Preparation of returns and papers to file to Registrar, DSE, CSE and SEC. Preparation of important papers for the internal management.

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3.9. Corporate Annual Report:

All the public limited companies are obliged to prepare a report, at the end of every financial year, of accounts for their shareholders, which is called the Corporate Annual Report. British American Tobacco prepares this report in every year which is generally comprised of following things: Corporate Directories. The Company Profile Notice of Annual General Meeting Major achievements during the year Chairmans statements Last Annual General Meeting Report to the Directors Fiver year Statistics Value added statements Growth during the year Auditors Reports to the Shareholders Balance Sheet Profit and Loss account Cash Flow Statement Notes to the financial statements Proxy Form

It is obligatory for the British American Tobacco to publish the corporate annual report in a printed booklet form and it has to be circulated to:

Every shareholder of the company Every director of the company

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The Securities and Exchange Commission The DSE and CSE The Investment Corporation of Bangladesh (ICB) The Bangladesh Bank (For joint venture) The Registrar of Companies

3.10. Chairmans statement

There is nothing mentioned in the Companies Act., 1994; about the chairmans statement but as per regulation 37(5) of DSE listing rule chairmans statement refers to the statement by the Chairman of the company, which shall include events occurring after the balance date as required by the Bangladesh Accounting Standards on Contingencies and Events occurring after the Balance Sheet Date. Apart from this British American Tobacco ornaments this report by including other matters such as operation, growth, future plans, acknowledgements and specially those matters of the company which are not discussed in the Directors Report.

3.11. Directors Report:

In accordance with the section 184 of Companies Act, 1994; and regulation 37(4) of the DSE Listing regulations, British American Tobacco attach a report by its Board of Directors to every balance sheet and it is placed before the General Meeting which is known as Directors Report fir the consideration of shareholders with respect to

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The state of the Company affairs The amount, if any, which the Board proposes to carry to any reserve in such balance sheet. The amount, if any, which the Board recommends should be paid by way if dividend. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end and of the financial year of the company to which the balance sheet related and the date of the report.

Contribution to the national exchequer. Any big deal in the form of lease, loan or debenture. About election, re-election or retirement of Directors. About appointment, re-appointment, and remuneration of auditors. Employment policy, labor relations and the total number of employees at year end. Other sundry information such as, number of branches and subsidiaries, any foreign establishments, number of employees and shareholders, prevailing share price index

Acknowledgment of assistance, co-operation etc.

4. Corporate Social Responsibility

The company has established a Corporate Social Responsibility (CSR) Steering Group chaired by the Managing Director and consisting of the Deputy Managing Director and all function heads. It is responsible for the review of Stakeholder feedback, the development of responses, the integration of CSR principles into its business activities and overseeing the preparation of the Social Report. Identification of stakeholders Government-Finance, Environment & Forest, Commerce, Industries, Health, Law, Agriculture, Police/BDR/Coast Guard, Local Administration, Others etc.

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Academicians-Teachers, Researchers. Legal Community Medical Community NGOs Think Tanks Anti Tobacco Groups Media-Print, Electronic Political Group Business Group BATBs business partners-Distributors/Retailers/Cash & Carry, Suppliers, Tobacco growers

International Organizations Students(Adults) Human Rights Organization Neighbor/DOHS

As their slogan is Success and Responsibility go together they are the first company to prepare a social report that complies with the rigorous global benchmarks of the AA 1000 standards and the United Nations Foundation sponsored global reporting initiative guidelines. They have formulated the expectations (approximately 122) of stakeholders under ten main headings through a discussion with the stakeholders. These are as followed along with their solutions1. Consumer information (12%):

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Stakeholders expressed that current warning clause printed on cigarette packets and all tobacco advertisements were inadequate. BATB position and response-In response to stakeholders expectations they have decided to provide additional information on smoking and health risks. They will help by providing additional relevant information to the government to assist them in this area if they are asked to do so. BATB Commitment-will support reasonable and enforceable laws by the government, in respect of improved health warnings on packets and brand communications and also will provide additional information on smoking and health through distribution of the smoking and health risks-our views booklets amongst stakeholders also distribute consumer leaflets. 2. Public Smoking (7%): Stakeholders expressed their view that laws should be enacted to restrict public smoking. Opinions were also expressed regarding protection of smokers rights. BATB position and response-They want to support initiatives of the government to restrict smoking in public places and will work the government to have clear definitions of public places with the objective of protecting nonsmokers and smokers rights. BATB Commitment-will support initiatives of the government to restrict smoking in public places. 3. Lower Risk Products(2%): Stakeholders expressed that they would like to see BATB undertake long term research programme for developing products which would be less harmful to consumers. BATB position and response-British American Tobaccos central research and development (R&D) based in London, UK are coordinating their efforts in this respect. But they have suggested that the only way to avoid the risks of smoking is not to smoke, and the best way for smokers to reduce the risks is to give up smoking. 4. Youth smoking prevention(13%):

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Stakeholders expressed that cigarette advertisements which attract the youth should be stopped. They urge to make advertisements showing harmful effects of cigarettes on children. They want to restrict availability of cigarettes to underage. BATB position and response-They will support any government initiative which suggests practical solutions to underage smoking and to enforce the law on juvenile smoking which prohibits sale and purchase of tobacco products by the underage. They have clear company policy which they communicate to their distributors, not to engage or sell cigarettes to underage vendors. They have stopped all the brand advertisements on TV. BATB Commitment-will continue to work with other third parties, including the government, in order to make improvements to our Youth Smoking Prevention (YSP) campaign. 5. Responsible marketing(10%): Stakeholders expressed that tobacco advertisements are too aggressive, often taking almost the entire attraction of a viewer. They have said that indirect advertisements through sports sponsorships like cricket should be avoided just like direct advertisements. BATB position and response-They have voluntarily stopped advertising in the electronic media and print media. They have also recommended to the print and electronic media that they introduce their own code of conduct to restrict aggressive and unethical tobacco advertisements. BATB Commitment-will follow all the guidelines provided by the regulatory agencies in case of promoting their products. 6. Tobacco regulation(4%): Stakeholders were concerned about the poor enforcement of laws relevant to the industry which they felt was contributing to the rapid increase in the numbers of smokers in the country. They want support enforcement of laws to restrict tobacco related products. BATB position and response-BATB advocates and supports practical and enforceable tobacco regulation. They will support the government on regulations providing realistic solutions to relevant tobacco issues.

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BATB Commitment-will record proactive engagements with the government on a quarterly basis. 7. Tobacco Taxation and Cigarette pricing(2%): Stakeholders expressed that tax on tobacco products should be increased to a prohibitive level to discourage consumers from purchasing the product. BATB position and response-Cigarettes are already heavily taxed with as much as 70% of the retail selling price going to the government. They have already engaged with the government and National Board of Revenue(NBR) to ensure reasonable, sustainable growth in government revenues. BATB Commitment-will keep relevant evidence of dialogue with the NBR and BCMA for reasonable excise rates that supports revenue generation without encouraging counterfeits and smuggling.

Issues relating to environmental management, corporate citizenship and corporate governance

8. Environmental management(16%): Stakeholders expressed their concern regarding the impact that tobacco cultivation has on the environment. They also expressed their concern regarding soil fertility issue due to tobacco cultivation. Stakeholders mentioned that BATB should make more meaningful contributions to environmental management. During this session five main themes emerged1. 2. 3. 4. 5. Afforestation Alternatives to wood fuel Fertilizers Soil conservation Product waste and factory emmisions

BATB position and response-BATB is in a position to influence directly some of the environmental impacts occuring the product life cycle. Their aim is to eliminate or

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minimize these impacts to reduce the burden on the environment. In line with this approach BATB is already focusing reducing wastes, promoting recycling, reducing water comsumption,using raw materials efficiently, improving soils nutrient composition, introducing alternatives to agricultural chemicals and wood fuels in tobacco growing, reducing depending on fossil fuels and atmospheric emmisions.They manage the countrys largest private afforestation programme and distribute more than 3.5million saplings annually. In the last two decades, they have distributed and planted more than 42.5 million saplings. They have received the first prize of Prime Minsters tree plantation award in 1999.They meet 70% of their wood fuel requirements through alternatives like paddy straw, jute stick, dhoncha stick etc.They use potassium sulphate which is recommended by Bangladesh Agriculture Research Council(BARC) .They also recommended balanced use of fertilizers on the cultivation process. They buy the best valuable non-adulterated fertilizers from the government in bulk and supply at cost price to the farmers. Soil fertility actually improved by tobacco cultivation but they still conduct soil quality test in tobacco growing areas from time to time to determine the fertility status. Their farmers have already taken up soil fertility programme.Every year they obtain a clearance certificate from the department of environment (DOE) which testifies that they are abiding by all environmental laws and regulations relevant to their operations. Any smoke residue from the e wood-fuel burning is emitted high in the air at about 12-14 feet. The residual ashes are used as fertilizers. BATB Commitment-will conduct the ongoing biodiversity assessment of will be designed and implemented. Corporate citizenship (31%): Stakeholders suggested that BATB should take up such economic activities which would help the company to diversify and create more employment Six main themes emerged in this list1. Role as a development partner 2. Corporate sponsorship and poverty allegiance opportunities.Stakehlders listed a number of expectations regarding the role of BATB in CSR: their operating areas based on which specific improvements in their afforestation programmes

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3. Support to tobacco farmers 4. Support to health programmes 5. Support to education programmes 6. Eliminating child labor BATB position and response-BATB has always conducted business in Bagladesh responsibly. Their corporate citizenship has a much wider reach. They are involved in various projects and initiatives, in improving the environment, supporting philanthropic organizations, promoting art and culture and assisting with disaster relief. They play a significant role in human resources development in the country. They run management development programmes which are attended by managers of other business houses. They offer internship programme for graduates and they also provise marketing skills development programme for BRAC.They promote indigenous culture by including Rabindra sangeet and Baul sangeet in their Star search programme.They also sponsor annual Lalon festival in Kushtia.They employ many women managers in order to con duct their business butr they do not have any women worker directly employed in their facory.Tobacco cultivation has a direct and indirect impact on the local economy and poverty alleviation. It also genrates employment for 100,000 people over the four month growing season. They run many programmes such as advising in the area of poultry rearing, vegetable and fruit cultivation to make life easier for farmers. They also try to facilitate bank loans to support farmers. They have initiated medical check up programmes for farmers but they do not compensate smokers affected by smoking. They are also involved with eye donation and blood donation programme and they also provide support health programmes such as Center for Rehabilitation for paralysed (CRP).They have a basic IT education center in Kushtia.They will promote higher education to farmers children as well as adult literacy programmes for farmers. They do not encourage child labour in their business area. BATB Commitment-will keep contributing in the tobacco export business of the country and also keep continuing current various types of programmes related to culture. Corporate Governance(3%):

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Stakeholders stated that BATB is a good company and they would want to see the company continue with its operations. Companys vision statement should include social responsibility and the company should not take all the profit out of the country. They should actively participate with the customs intelligence to control smuggling. BATB position and response-In 2002 they have introduced a new corporate slogan success and responsibility go together which supports their vision and emphasizes their commitment to be a responsible company.BATB is a public limited company in this country and there are some shareholders of this company. They get dividend from the company against their share. They provide any relevant appropriate in formations for supporting to control smuggling, counterfeiting and will continue to do so.

SOCIAL AND ECONOMIC CONTRIBUTION

One of the largest revenue generator in private sector. Has planted and distributed 42.5 million trees with a sapling survival rate exceeding 90%. Has successful biodiversity program specifically emphasizing on water, air and energy. Has partnership with the Students Anti Smoking Committee(SASC). Has been providing Basic IT Education and Basic English at free of cost in rural areas. Has signed an agreement with Agro-based Industries & Technology Development project to produce quality vegetables for export. Established a call center which provides business consultancy and technical IT supports to different BAT companies in Sri Lanka and Middle East. Installed a bio-filter at a cost of 6 crores for environmental health and safety practices. Provides support to programmes like Shandhanis Posthumous eye donation, the governments Polio vaccination programme and blood donation programme etc.

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Gives support to the people of that regions which are affected by natural disasters.

ACHIEVEMENTS
Has won the Food and Agricultural organization award for pioneering the development of vegetable seed industry in Bangladesh 1st prize of Prime Ministers National Award on Tree Plantation in 1999 and 2002. The Prime Ministers Afforestation Award in 1993. The Presidents Award in Agriculture in 1976. The FAO Award in 1999 The National Export Trophy Award in 2000.

Measurement of CSR to Stakeholders:

As BATB has identified stakeholders, it has some responsibilities for its stakeholders. From the discussion held between BATB and its stakeholders, we have got some ideas where the stakeholders have some expectations from BATB. They expect some nonprofitable activities from BATB in order to control tobacco business in the country. A total of 122 expectations have come up through the discussion and all of them fall in ten main categories.

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Figure: Percentage of expectations

Most of them have strong logical base to conduct and BATB is trying to meet these expectations for many years. Majority of these are being conducted successfully throughout the country under supervision of BATB. Few of these expectations are coming to consideration of BATB and they have already started working on these. BATB has some strong responses and positions over each and every expectation and they also have commitments regarding the demands from stakeholders. BATB has achieved many awards from many organizations including government for contributing a lot in the social and economic context of Bangladesh. It implies that BATB is doing well and putting best effort in conducting social responsibility in their chosen areas.

YOUR VOICE SURVEY result-

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100 90 80 70 60 50 40 30 20 10 0
re ns O ib pe i li n m ty Pa in E n y& d e d B te rp ene ris fit C in s or g po Sp L ra i te ead rit er R es s po hip ns ib ilit y ul tu

BATB Global high performance norm

From the survey stated above it is clearly seen that BATB is performing extremely in order to satisfy their stakeholders. In comparison to global high performance, BATB is clearly serving well in terms of culture, freedom through responsibility, open minded, pay & benefits, enterprising spirit, leadership, CSR etc.As the stakeholders have been selected by BATB itself, we think the stakeholders are being reasonably served by BATB. In the context of conducting corporate social responsibility they are doing comparably well than others. Their stakeholders getting proper feedbacks against their expectations.

Fr ee

do

th

ro u

gh

re s

po

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5. Financial Statistics:
5.1. Introduction:
Every Company secretary should have sound knowledge about finance and accounts to comply with the requirements of the laws and also for the support of Board of Directors. The Companies Act requires every company to ensure that adequate accounting records are kept, sufficient to show and explain its transactions. Moreover, as per International Accounting Standard (IAS), the financial statements to be prepared so as to give a true and fair view of the companys financial position as well as the profit and loss. According to the section 181 of Companies Act, 1994; the books of accounts must in particular contain: All sums of money received and expended by the company and matters in respect of which the receipts and expenditures take place. All sales and purchase of goods by the Company. The assets and liabilities of the Company In the case of a Company engaged in production, distribution, marketing, transportation, processing, milling, manufacturing, extraction, and mining activities such as complete particulars relating to utilization of material, labor and those items of overhead cost as may be necessary to identify their nature. A complete ser of financial statements include the following components: 1. Balance Sheet 2. Income Statement 3. A statement showing either i. all changes in equity, or

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ii.

changes in equity other than those arising from capital transactions with owners and distributions to owners

4. Cash Flow Statement 5. Accounting policies and explanatory notes. The financial period the Companies is January to December and the financial statements are prepared under the historical cost convention in accordance with applicable, International Accounting Standards (IAS) in Bangladesh, which does not vary from the requirements of the companies Act, 1994; the listing Regulations of the Stock Exchanges, The Securities and Exchange Rule 1987 and rules applicable in Bangladesh.

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6. Company Analysis:
6.1. Market composition
Chittagong is the biggest region in terms of industry size. The region contributes 29% of the cigarette industry which is almost one third of the total industry. This makes Chittagong very important for BAT since 3% growth of market share in the region will result into 1% growth of market share nationally.

15% 13% 13%

Dhaka South Chittagong Sylhet Khulna Bogra

18%

29%

Figure 17: Market Composition Market composition in Chittagong is different from other regions. The resonsons are stated below: Firstly, unlike other regions Very Low is the largest segment in Chittagong. At the same time the size of the biri market is smaller than other regions. This is due to higher per capita income in Chittagong which has probably led to faster cigarettization than the other regions.

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1 00%

18
80%

13 20

5 15

3 15

10 20

8 17

8 17

20
60%

38 49 46 42 14 21
DS Ctg V Low Low

50 48 58 32 12
B og M edium Khl P remium

48

40%

20%

23
Syl

27
National

0% DN

Figure 18: Price Segment in Different Regions Secondly, nobody truly dominates the market in Chittagong. The market is fragmented among four companies. Other than BAT and DTI, Abul Khair and Aziz Tobacco have strong presence in Chittagong. BAT leads the region with 38% share, followed by DTI with 28%.
100% OTHERS 80% 60% 40% 20% 0% National DN DS Ctg Bog Khl Syl A. KHAIR NASIR SONALI AZIZ ALPHA DHAKA BAT

Figure 19: Competition in Different Region

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6.2 Industry Growth

Chittagong is the fastest growing region Over the last three years Chittagong has always been the highest contributor behind national industry growth. Since 2000, cigarette market is growing strongly and has become the fastest growing region.
3500 3000 2500 2000 1500 1000 500 0 2006 National 2007 DN DS 2008 Ctg 2009 Bog Khl 2010 Syl 200 0 600 400 1000 800

Figure 20: Growth Trend of Chittagong Market Not only in terms of absolute volume but also at a percentage growth level, Chittagong has provided highest growth than any other region over the last two years. Company National DN DS Ctg Bog Khl Syl 2005 11% 22% 14% 7% 10% 9% 5% 2006 27% 12% 21% 29% 51% 32% 26% 2007 5% -17% -3% 14% 12% 14% 7% 2008 12% 7% 7% 16% 12% 10% 14%

Table XI: Growth Percentage of Different Market Growth in Chittagong is driven by Low and Very Low Segment

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Growth of low and Very low segment is the driving force behind the overall industry growth in Chittagong. In 2002 Very Low growth rate contracted and Low became the fastest growing segment. The same trend has been observed in 2003 where Very low growth rate has declined further and Low has grown more strongly. Medium segment in Chittagong remained flat in 2003 after strong growth in 2002. Unlike other regions mid has not declined in Chittagong. Premium is growing strongly over the last two years from a very small base. Growth rate over 20% for consecutive two years indicates the segment will pick up much faster in 2004.
900 800 700 600 500 400 300 200 100 0 2010 2007 Industry Mid 2008 Low 2009 V Low 2010 Pre 400 350 300 250 200 150 100 50 0

Figure 21: Growth of Different Segment in Chittagong

Premium Medium Low V Low Industry

Segment Volume 2007 2008 2009 2010 22 21 26 32 92 104 132 133 153 181 256 289 241 288 335 349 508 595 749 803

2007 29% 11% 2% 15% 10%

Growth Rate 2008 2009 -1% 24% 14% 27% 18% 41% 19% 16% 17% 26%

2010 21% 1% 13% 4% 7%

Table XII: Segment Growth and Volume in Chittagong

6.3. Market and BATBs Relative Share

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BAT business performance in Chittagong region is very diverse from market to market. Based on BAT share performance, these markets can be classified into three broad groups: Green, Yellow and Red. Green Markets: Markets where BAT has clear leadership i.e. BAT Market share is more than 50%. Comilla, Daudkandi and Sitakunda markets are green which together contributes 20% of Regions total Industry. Yellow Markets: Markets where BAT has some base but not leadership. i.e. BAT share is between 30-49%. Chittagong, Feni, Rangamati, Khagrachari and Laksam are yellow and together they contribute 50% of Regions total industry volume. Red Markets: Markets where BAT lack leadership and competition has dominance i.e. BAT share is below 30%. Choumuhoni, Chandpur and Coxs Bazaar markets are red. Turnaround in these markets will require long term investment.

Market Growth Potential for BATB

Green markets provides the current volume base for BATB in the Region Key characteristic of Green market is that the V. Low segment is significantly smaller Vs. other markets in the region. Low is the dominating segment and BATB is already a strong player. Also, these markets very closely resemble National scenario and provides the major portion of BATBs current volume base for the Region. Premium Segment Size Medium Segment Size Low Segment Size Very Low Segment Size BAT Total Share Green 6% 17% 49% 28% 63% Yellow 5% 16% 39% 40% 41% Red 4% 13% 31% 53% 21% Region 5% 15% 39% 41% 38% National 8% 17% 47% 27% 51%

Table XIII: Segment Size and Market Share Yellow and Red provide the future growth opportunity Competitors volume in Red and Yellow markets is huge! Total competition volume in these markets alone represents around 48% of the entire Regions Low segment volume! This leaves an enormous growth opportunity for BATB to capitalise on. Also, among the

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Yellow and Red markets, the biggest opportunity lies in Yellow markets, both in volume terms and also, from the fact that BATB has reasonable presence and has already gained initial successes in these markets. Market Type Comp Volume within Low Green 16 mln Yellow 84 mln Red 72 mln Region 172 mln

21% 31%

48%

Figure22: Volume Contribution Yellow markets are the biggest

Yellow markets are the fastest growing markets in Chittagong

Yellow markets are also the most potential markets in the region. Contribution of these markets is on a steady increasing trend over the last two years due to intense competition and activity by the major brands.

Contributio n 2008 2009 2010

Green 30% 30% 30%

Yellow 49% 51% 53%

Red 20% 17% 16%

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Table XIV: Volume contribution by Market type Yellow markets have provided highest growth for BAT over the last two years Despite not being a clear leader, contribution of Yellow markets to BATB business is highest. Star has also gained higher growth in these markets. BAT Growth Green Yellow 28% 34% 17% Star Growth Green Yellow 49% 28% 85% 41%

Growth 10 vs '09

Red

Region

11% 28% 3% 14%

Red 220% * 10%

Region 68% 34%

10 vs '09 16% *smaller base

Table XV: Growth trend by Market type Navy is getting higher growth by capitalising on Red and Yellow markets

Unfortunately, Navy continued capitalising on the opportunities successfully primarily in Yellow and Red markets; in fact, these are the markets where Navy has registered higher growth in the Region. Star has also generated its due growth, but its growth has slowed down significantly this year, particularly in Yellow and Red markets. Moreover, in Red and Yellow markets, since it has been growing from a very small base (hence, the growth rates are very high), Navys continued growth may very well threaten Stars presence in these markets, if it is not addressed immediately.

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Off-take growth % SRF Navy

Green 03 vs 02 28% 81%

Yellow 02 vs 03 vs 01 '02 49% 41% 25% 58%

Red 02 vs 03 vs 02 vs 01 '02 01 85% 10% 225% 41% 4% 20%

Region 03 vs '02 34% 26%

02 vs 01 68% 34%

Table XVI: Offtake Growth trend of SRF and Navy

6.4. SWOT Analysis of BATB

Like other organizations BATB has some strengths, weakness, opportunities and threats which describe bellow in details:

1. Strengths:
Latest technology BATB is using latest machine in their manufacturing process. They are using world class high speed machines for their production. High loyalty with BAT BATB is supplying some products solely for example; JPGL, and single supplier of other materials say, London, SE 555, B&H, HLB and outer. And for all of the business activities BATB has strong and faithful business relationship with BAT. JIT, TQM For keeping step with race with BAT, BATB follows; Just In Time delivery &Total Quality Management. BATB is capable to supply the materials according to BATs specification.

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2. Weakness:
Lack of competent technician BATB has new technology machine which have been running for the last few years. Currently there is no experienced technician available in this country for dealing with this machine. For solving this problem BATB has hired the outsider technicians, which is costly for the organization.

3. Opportunity:
Following opportunities are visible for BATB If BATs requirement will increase, then BATB will be capable to fulfill their requirement by supplying through JIT. MAST has capacity to do business with other company

4. Threats:
Increasing competition is another threat for BATB. Anti Smoking Campaigns Law Enforcement against Public Smoking

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Five years financial statistics of British American Tobacco

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7.1. Five year statistics of British American below:

British American Tobacco Bangladesh Company Limited
Profit and loss Account for the year ended 31 December 2010
2010 Taka 000s Receipts from customers Supplementary duty and VAT Net turnover Less: Operating costs and expenses Profit before interest and tax Interest Profit before tax Tax Profit after tax Appropriations : Revenue reserve Tax holiday reserve Interim dividend 27,137,227 18,505,658 8,631,569 7,598,698 1,032,871 122,537 910,334 237,022 673,312 2003 Taka 000s 25,910,181 17,783,884 8,126,297 6,979,656 1,146,641 115,336 1,031,305 160,000 871,305

Tobacco

are

given

at

Tk.

(229,251) 242,563 2.50 150,000

38,210 173,095 210,000 21,000 390,000 39,000 871,305 Taka 14.52

(2003:Tk.3.50) per share of tk. 10 each Dividend distribution tax for interim 15,000 dividend @10% Proposed final dividend at Tk. 7.50 450,000 (2003:tk 6.50) per share of Tk 10 each Dividend distribution tax for proposed 45,000 final dividend @ 10% 673,312 Earnings per share Taka 11.22

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British American Tobacco Bangladesh Company Limited

Statement of changes in Shareholders equity for the year ended 31 December 2010 Share Capital Revenu e reserve Taka Balance at 1 January 2010 Net profit for the year 2010 Tax holiday reserve Tax holiday reserve release 000s 600,000 Taka 000s 1,327,14 propose Capital Tax d dividen d Taka 000s 429,000 Taka reserve holiday reserve Taka Taka 000s 2,737,79 1 673,312 (429,000 ) (165,000 ) 2,817,10 3 Total

000s 000s 208,553 173,095 242,563 (173,095 ) -

3 673,312 (242,563 ) 173,095 -

Dividend declared (including dividend distribution tax Interim dividend (including dividend distribution tax) Proposed dividend (including dividend distribution tax) Balance at 31 December 2010 600,000

(492,00

0) (165,000 ) (495,000 495,000 ) 1,270,98 7 495,000

208,553 242,563

British American Tobacco Bangladesh Company Limited

Cash Flow Statement for the year ended 31 December 2010
2010 Taka 000s 2003 Taka 000s

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Cash flows from operating activities: Collection from distributors, leaf export and others Payment for costs and expenses (including supplementary duty and VAT) Cash generated from operation Income tax paid Interest paid Net cash flows from operating activities Cash flows from investing activities: Acquisition of fixed assets Proceeds from sale of fixed assets Net cash used in investing activities Cash flows from financing activities: Medium/short term bank loan received Other loans realized Dividend paid Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents for the year Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the of the year 720,000 55 (587,162) 132,893 271,443 (794,737) (523,294) 950,000 371 (646,213) 304,158 (437,108) (357,629) (794,737) (404,972) 7,656 (397,316) (1,115,421) 4,495 (1,110,926) 27,114,250 (26,399,332) 714,918 (67,335) (111,717) 535,866 25,859,170 (25,208,662) 650,508 (165,512) (115,336) 369,660

Share capital Revenue reserve Proposed final dividend Capital reserve Tax holiday reserve Shareholders equity

13 14 15 16

600,000 1,446,623 180,000 196,101 119,809 2,542,533

600,000 1,270,987 495,000 208,553 242,563 2,817,103

125

125

British American Tobacco Bangladesh Company Limited

Statement of changes in Shareholders equity for the year ended 31 December 2009
Share Capital Taka 000s Balance at 1 January 2010 Net profit for the year 2010 Tax holiday reserve Tax holiday reserve release Dividend declared (including (including (including 600,000 dividend dividend dividend 600,000 Revenue reserve Taka 000s 1,327,14 3 673,312 (242,563 ) 173,095 (165,000 ) (495,000 ) 1,270,98 7 232,882 (119,809 ) 242,563 (180,000 ) 1,446,62 3 proposed dividend Taka 000s 429,000 Capital reserve Taka 000s 208,55 3 Tax holiday reserve Taka 000s 173,095 242,563 (173,095 ) 242,563 119,809 (242,563 ) 119,809 Total Taka 000s 2,737,79 1 673,312 (429,000) (165,000) 2,817,10 3 232,882 (12,452) (495,000) 2,542,53 3

(492,000) 495,000 495,000 208,55 3 (12,452

distribution tax Interim dividend distribution tax) Proposed dividend

distribution tax) Balance at 31 December 2010 Net profit for the year 2009 Tax holiday reserve Tax holiday reserve release Deferred tax adjustment Dividend

declared (including dividend 600,000

) (495,000) (180,000) 180,000 196,10 1

distribution tax ) Proposed dividend Balance at 31 December 2009

125

British American Tobacco Bangladesh Company Limited

Profit and Loss Account for the year ended 31 December 2009
2009 Taka 000s 29,508,675 20,248,161 9,260,514 8,676,726 583,788 133,045 450,743 150,000 67,861 217,861 232,882 2010 Taka 000s 27,137,227 18,505,658 8,631,569 7,598,698 1,032,871 122,537 910,334 197,022 40,000 237,022 673,312

Receipts from customers Supplementary duty and VAT Net turnover Less: Operating costs and expenses Profit before interest and tax interest Pofit before tax Tax: Current tax Deferred tax Profit after tax Appropriations: Revenue reserve Tax holiday reserve Proposed final dividend at TK 3.00 (2010: TK 7.50) per share of TK 10 each Dividend distribution tax for proposed final dividend @ 10% Interim dividend at (2010: TK 2.50) per share of TK 10 each Dividend distribution tax for interim dividend @10% Earnings per share

(66,927) 119,809 180,000 ---232,882 Taka 3.88

(229,251 242,563 450,000 45,000 150,000 15,000 673,312 Taka 11.22

British American Tobacco Bangladesh Company Limited

Cash Flow Statement for the year ended 31 December 2009
2009 2010

125

Taka 000s Cash flows from operating activities: Collection from distributors, leaf export and others Payment for costs and expenses (including Supplementary Duty and VAT) Cash generated from operation Income tax paid interest paid Net cash flows from operating activities Cash flows from investing activities: Acquisition of fixed assets Proceeds from sale of fixed assets Net cash used in investing activities Cash flows from financing activities: Net short term bank loan received/(repayment) Net proceeds from finance lease Other loans realized Dividend paid (including dividend distribution tax) Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents for the year Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the of the year 30,000 13,708 -(494,024) (450,316) (24,116) 196,706 172,590 (922,009) 4,541 (917,468) 29,426,333 (27,759,515) 1,666,818 (179,285) (143,865) 1,343,668

Taka 000s 27,114,250 (25,673,263) 1,440,987 (67,335) (111,717) 1,261,935

(415,140) 7,656 (407,484)

(230,000) 8,886 55 (591,949) (813,008) 41,443 155,263 196,706

British American Tobacco Bangladesh Company Limited

Profit and Loss Account for the year ended 31 December 2010
2010 Taka 000s 34,994,149 23,968,678 2009 Taka 000s 29,508,675 20,248,161

Receipts from customers Supplementary duty and VAT

125

Net turnover Less: Operating costs and expenses Profit before interest and tax interest profit before tax tax: Current tax Deferred tax Profit after tax Appropriations: Revenue reserve Tax holiday reserve Proposed final dividend Earnings per share

11,025,381 10213,464 811,917 160,504 651,413 263,000 26,380 289,830 361,583

9,260,514 8,676,726 583,788 133,045 450,743 150,000 67,861 217,861 232,882

181,583 180,000 361,583 Taka 6.03

(66,927) 119,809 180,000 232,882 Taka 3.88

British American Tobacco Bangladesh Company Limited

Cash Flow Statement for the year ended 31 December 2010 2010 Taka 000s Cash flows from operating activities: Collection from distributors, leaf export and others Payment for costs and expenses Supplementary Duty and VAT paid Cash generated from operation Income tax paid interest paid 34,959,259 (10,504,843) (23,,273,305 ) 1,181,111 (188,351) (160,504) 29,426,333 (7,511,355) (20,248,160) 1,666,818 (179,285) (143,865) 2009 Taka 000s

125

Net cash flows from operating activities Cash flows from investing activities: Acquisition of property, plant and equipment Proceeds from sale of property, plant and equipment Net cash used in investing activities Cash flows from investing activities: Net short term bank loan received/(repayment) Net proceeds from obligation under finance lease Dividend paid Net cash used in financing activities

832,256

1,343,668

(274,016) 6,627 (267,389)

(922,009) 4,541 (917,468)

50,000 6,701 (188,023) (131,322)

30,000 13,708 (494,024) (450,316) (24,116) 196,706 172,590

Net increase/(decrease) in cash and cash equivalents for the year 433,545 Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the of the year Closing cash and cash equivalents have been arrived at as follows: Cash and bank balances Bank overdraft 606,135 606,135 172,590 606,135

244,718 (72,128) 172,590

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British American Tobacco Bangladesh Company Limited

Statement of changes in Shareholders equity for the year ended 31 December 2010
Share Capital Taka Balance at 1 January 2009 Net profit for the year 2009 Tax holiday reserve Tax holiday reserve release Deferred tax adjustment 000s 600,000 Revenue reserve Taka 000s 1,270,98 7 232,882 (119,809 ) 242,563 (180,000 ) proposed dividend Taka 000s 495,000 Capital reserve Taka 000s 208,55 3 (12,452 Tax holiday reserve Taka 000s 242,563 119,809 (242,563 ) Total Taka 000s 2,817,10 3 232,882 (12,452) (495,000 ) -

Dividend paid (including dividend distribution tax) Proposed dividend -

) (495,000) 180,000 -

125

Balance at 31 December 2009 Net profit for the year 2010 Tax holiday reserve release Dividend paid Proposed dividend Balance at 31 December 2010

600,000 600,000

1,446,62 3 361,583 119,809 (180,000 ) 1,748,01 5

180,000 -

196,10 1 -

119,809 (119,809 ) -

2,542,53 3 361,583 (180,000 ) 2,724,11 6

(180,000) 180,000 180,000 196,10 1

British American Tobacco Bangladesh Company Limited

Profit and Loss Account as at 31 December 2009 2009 Taka 000s Gross turnover Supplementary duty and VAT Net turnover Cost of sales Gross profit Operating expenses Profit before interest and tax Interest 37,869,293 25,935,834 11,933,459 8,388,786 3,544,673 2,242,677 1,301,996 45,573 2010 Taka 000s 34,994,149 23,968,768 11,025,381 8,068,603 2,956,778 2,144,881 811,917 160,504

125

Profit before tax Tax Current Tax Deferred Tax 419,400 38,052 457,452 798,971 Taka Earning per share 13.32 263,000 26,830 289,830 361,583 Taka 6.03

British American Tobacco Bangladesh Company Limited

Cash Flow Statement for the year ended 31 December 2009
2009 Taka 000s
Cash flows from operating activities Collection from distributors, leaf export and other Payment for costs and expenses Supplementary duty and VAT paid Cash generated from operation Income tax paid Interest paid Net cash flows from operating activities Cash flows from investing activities Acquisition of property, plant and equipment Proceeds from sale of property, plant and equipment Net cash used in investing activities (231,467) 8,692 (222,775) (274,016) 6,627 (267,389) 38,142,226 (10,367,305) (25,932,877) 1,842,044 (277,510) (45,573) 1,518,961 34,959,259 (10,504,843) (23,273,305) 1,181,111 (188,351) (160,504) 832,256

2010 Taka 000s

Cash flows from financing activities :

125

Net short term bank loan received / (repayment) Net proceeds from obligation under finance lease Dividend paid Net cash used in financing activities Net increase in cash and cash equivalents for the year Cash and cash equivalents at the beginning of the year Cash and Cash equivalents at the end of years Closing cash and cash equivalents have been arrived at as follows. Cash and bank balances

(800,000) (5,104) (179,514) (984,618) 311,568 606,135 917,703

50,000 6,701 (188,023) (131,322) 433,545 172,590 606,135

917,703 917,703

606,135 606,135

British American Tobacco Bangladesh Company Limited

Statement of changes in Shareholders equity for the year ended 31 December 2009
Share Capital Taka Balance at 1 January 2010 Net profit for the year 2010 Tax holiday reserve release Dividend paid Balance as at 31 December 2010 Net profit for the year 2009 000s 600,000 600,000 Revenue reserve Capital reserve Taka 000s 196,101 196,101 (143,657 ) 12,452 Tax holiday reserve Taka 000s 119,809 (119,809 ) Total Taka 000s 2,542,53 3 361,583 (180,000 ) 2,724,11 6 798,971 (70,763) 12,452 (180,000 )

Taka00 0s
1,626,62 3 361,583 119,809 (180,000 ) 1,928,01 5 798,971 72,894 (180,000 )

Property, plant and equipment revaluation reserve adjustment Deferred tax adjustment of property, plant and equipment revaluation Dividend paid -

125

Balance as at 31 December 2009

600,000

2,619,88 0

64,896

3,284,77 6

British American Tobacco Bangladesh Company Limited

Profit and Loss Account for the year ended 31 December 2010
2010 Taka 000s
Gross turnover Supplementary duty and VAT Net turnover Cost of sales Gross profit Operating expenses Profit before interest and tax Interest Profit before tax Tax Current Tax Deferred Tax Profit after tax transferred to revenue reserve Taka Earnings per share 27.81 Taka 13.32 45,414,187 31,383,801 14,030,386 8,999,361 5,031,025 2,858,882 2,172,143 76,212 2,248,355 654,254 (74,677) 579,577 1,668,778

2009 Taka 000s

37,869,293 25,935,834 11,933,459 8,388,786 3,544,673 2,242,677 1,301,996 (45,573) 1,256,423 419,400 38,052 457,452 798,971

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British American Tobacco Bangladesh Company Limited

Cash Flow Statement for the year ended 31 December 2010
2010 Taka 000s
Cash flows from operating activities Collection from distributors, leaf export and other Payment for costs and expenses Supplementary duty and VAT paid Cash generated from operation Income tax paid Interest paid Net cash flows from operating activities Cash flows from investing activities Acquisition of property, plant and equipment Proceeds from sale of property, plant and equipment Net cash used in investing activities (271,211) 692 (270,519) (231,467) 8,692 (222,775) 45,346,821 (12,893,748) (30,568,019) 1,885,054 (517,245) 76,212 1,444,021 38,142,226 (10,367,305) (25,932,877) 1,842,044 (277,510) (45,573) 1,518,961

2009 Taka 000s

Cash flows from financing activities : Net short term bank loan received / (repayment) Net proceeds from obligation under finance lease Dividend paid Net cash used in financing activities 5,549 (418,288) (412,739) (800,000) (5,104) (179,514) (984,618)

Net increase in cash and cash equivalents for the year Cash and cash equivalents at the beginning of the year Cash and Cash equivalents at the end of years

760,763 917,703 1,678,466

311,568 606,135 917,703

British American Tobacco Bangladesh Company Limited

Statement of changes in Shareholders equity for the year ended 31 December 2010
Share Capital Taka 000s Revenue reserve Taka000 s Capital reserve Taka 000s Total Taka 000s

125

Balance at 1 January 2009

600,000

1,928,01 5 72,894 (180,000 ) 798,971

196,101 (143,657 ) 12,452

2,724,11 6 (70,763) (180,000 ) 798,971 12,452 3,284,77 6 (420,000 ) 1,668,77

Property, plant and equipment revaluation reserve adjustment Dividend paid Net profit for the year 2009 Deferred tax adjustment of property, plant and equipment revaluation Balance as at 31 December 2009 Dividend paid Net profit for the year 2010 Balance as at 31 December 2010 600,000 600,000 -

2,619,88 0 (420,000 ) 1,668,77 8 3,868,65 8

64,896 -

64,896

8 4,533,55 4

125

Five years Performance Analysis of British American Tobacco

125

8.Five years Performance Analysis of British American Tobacco:

INCOME STATEMENT
2010
Particulars Gross Sales Less: Supplementary Duty & VAT Net Sales Less: Cost of Sales Gross Profit Operating Expenses EBIT/Operating Income less: Interest Profit before Tax Tax Net Income TK '000 4541418 7 3138380 1 1403038 6 -8999361 5031025 -2858882 2172143 -76212 2095931 -579577 1516354 % 323.68% 223.68% 100.00% -64.14% 35.86% -20.38% 15.48% -0.54% 14.94% -4.13% 10.81%

2009
TK '000 3786929 3 2593583 4 1193345 9 -8388786 3544673 -2242677 1301996 -45573 1256423 -457452 798971 % 317.34% 217.34% 100.00% -70.30% 29.70% -18.79% 10.91% -0.38% 10.53% -3.83% 6.70%

2008
TK '000 3499414 9 2396876 8 1102538 1 -6691432 4333949 -3522032 811917 -160504 651413 -289830 361583 % 317.40% 217.40% 100.00% -60.69% 39.31% -31.94% 7.37% -1.46% 5.91% -2.63% 3.28%

2007
TK '000 2950867 5 2024816 1 9260514 -5750696 3509818 -2926030 583788 -133045 450743 -217861 232882 % 318.65% 218.65% 100.00% -62.10% 37.90% -31.60% 6.30% -1.44% 4.86% -2.35% 2.51%

2006
TK '000 2713722 7 1850565 8 8631569 -5048435 3583134 -2550263 1032871 -122537 910334 -237022 673312 % 314.40% 214.40% 100.00% -58.49% 41.51% -29.55% 11.96% -1.42% 10.54% -2.75% 7.79%

Interpretation: In the 2006, BATBC had the lowest cost of goods sold whereas it was higher in 2007, 2008, 2009 and 2010. Cost of goods sold was highest 70.30% in the year 2009 although sales are much less than 2010. So, in 2010, BATBC performed better to control its cost of sales with higher sales.

Operating expense was lowest in the year 2009. It was much higher in the earlier years (2006-2008). Later, BATBC managed to reduce its operating expense in 2009 and 2010. In managing operating expense, BATBC has improved a lot. Because in 2010 it is only 20.38%. It came to almost two-third of earlier years operating expense which is obviously a good indication for investors that BATBC is concentrating to reduce their operating expenses.

Reflecting these differences, BATBC achieved the highest EBIT (15.48% of sales) in 2010 whereas it is the lowest in the year 2007(6.30% of sales). In 2006, they had higher EBIT (11.97%) than 2007 and 2008. Their performance in managing all operating expenses BATBC had paid higher interest in the earlier years which can easily be understood from the income statement. Since they had more percentage of bad debt their capital structure, interest expense was higher in those three years. In 2009 and 2010 they incurred less interest expense (.38% and .54%) because they reduce debt percentages.

Profit before tax for BATBC is highest in 2010 (16.02% of sales)., It was also much higher in 2006 and 2009 (10.55% and 10.53%). Profit before tax the lowest in 2007 (4.87% of sales) and a little bit in 2008 (5.91% of sales).

Tax was the highest in 2010 (4.13% of sales) and the lowest in 2007 (2.35%). In the other years, it was somewhere between in these two years depending in the profit before tax.

Net income is the highest in 2010 (11.89% of sales) and the lowest in 2005 (2.51%). In the others years, it fluctuated between these two limits. After, 2007 it was increasing till 2010 which surely indicate something positive about BATBC to the investors in 2006 was better than in 2007 and 2008.

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BALANCE SHEET

Particulars Current And Non-current Assests Non-current Assests Property, Plant and equipment Total Non-current Assets Current Asset Inventories Trade & Other Recivables Letter of credit Trade debtors Sundry Debtors Total Trade & Other Recivables Advances, deposits & prepayments Cash and Cash equivalents Total current Assets Total Assets Equity And Liabilities Equity Share Capital Revenue & Reserve Capital Reserve Total Equity Non-current liabilities Deferred liability(gratuity) Deferred Tax liability Obligation under finance lease Total Non-current liabilities Current Liabilities Bank Draft Short term Bank loan Creditors Accruals Provisions for Corporate tax Total Current liabilities Total liabilities Total liabilities and owner's equity

2010 TK '000 %

2009 TK '000 %

2008 % TK '000

2007 TK '000 %

2006 TK '000 %

3462803 3462803 3451652 18430 81980 21832 122242 1273169 1678466 6525529 9988332

34.67% 34.67% 34.56% 0.18% 0.82% 0.22% 1.22% 12.75% 16.80% 65.33% 100.00%

3698164 3698164 2507601 1524 14610 9326 25460 890895 917703 4341659 8039823

46.00% 46.00% 31.19% 2.00% 0.18% 0.12% 0.32% 11.08% 11.41% 54.00% 100.00%

4105423 4105423 2271107 8162 287544 81891 377597 187756 606135 3442595 7548018

54.39% 54.39% 30.09% 0.11% 3.81% 1.08% 5.00% 2.49% 8.03% 45.61% 100.00%

4317857 4317857 2006493 16590 178220 52316 247126 118889 356299 2728807 7046664

61.28% 61.28% 28.47% 0.24% 2.53% 0.74% 3.51% 1.69% 5.06% 38.73% 100.01%

3802781 3802781 2132167 6129 98461 52261 156851 123595 250427 2663040 6465821

58.81% 58.81% 32.98% 0.09% 1.52% 0.81% 2.43% 1.91% 3.87% 41.19% 100.00%

600000 3868658 64896 4533554

6.01% 38.73% 0.65% 45.39%

600000 2619880 64896 3284776

7.46% 32.59% 0.81% 40.86%

600000 1928015 196101 2724116

7.95% 25.54% 2.60% 36.09%

600000 1746432 196101 2542533

8.51% 24.78% 2.78% 36.07%

600000 2008550 208553 2817103

9.28% 31.06% 3.23% 43.57%

186800 426875 18843 632518 0 1333738 1940975 1547547 4822260 5454778 9988332

1.87% 4.27% 0.19% 6.33% 0 13.35% 19.44% 15.49% 48.28% 54.61% 100.00%

218152 501552 15338 735042 0 1065844 1875820 1078341 4020005 4755047 8039823

2.71% 6.24% 0.19% 9.14% 0 13.26% 23.33% 13.41% 50.00% 59.14% 100.00%

391810 475952 22006 889768 0 800000 765454 2105680 263000 3934134 4823902 7548018

5.19% 6.32% 0.29% 11.80% 0 10.60% 10.14% 27.90% 3.48% 52.12% 63.92% 100.01%

373370 449122 18159 840651 183709 750000 522425 2057346 150000 3663480 4504131 7046664

5.30% 6.37% 0.26% 11.93% 2.62% 10.64% 7.41% 29.20% 2.13% 52.00% 63.93% 100.00%

313328 368809 7213 689350 53721 720000 321276 1667349 197022 2959368 3648718 6465821

4.85% 5.70% 0.11% 10.66% 0.83% 11.14% 4.97% 25.79% 3.05% 45.78% 56.44% 100.01%

Interpretation:
From the common size balance sheet we ca see that BATBCs property, plant and equipment is decreasing in percentage of total assets. This decrease in fixed assets may consist of a cumulative effect of depreciation, low capital expenditure and disposal of fixed assets. It was highest in 2007 (61.28% of total assets) and lowest in 2010 (34.67% of total assets). From 2006 to 2010 they have been disposing some of their fixed assets with some gains or losses. As a result, the percentage of fixed assets is decreasing. It indicates that they have less capital tied up in form of fixed assets out of their total assets.

They have been maintaining a sufficient amount of inventory in their storehouse and to some extent, the percentage of inventory throughout five years is consistent with a little fluctuation. It means that they are efficient in estimating and managing their inventory at a lower cost and meeting the demand.

Their receivable is highest in 2008 with 5% of total asset. In 2008, their trade debtor was also the highest with 3.81% which reflect that BATBC maintains an effective credit policy strictly.

BATBCs advances, deposit and prepayments are increasing every year expect the year 2007. It means they are investing their capital in non-cash generating assets and since this percentage is increasing, it is obvious that they are relying more on this assets.

BATBC has the highest cash percentage in the year 2010 (16.80%) and it was increasing since 2006. It indicates BATBC is becoming financially stronger than previous years. It certainly improves the liquidity positions of the company which is a positive signal to the creditors and short term lenders but shareholders may not like it. Because the percentage of idle capital is increasing.

From the common size statement we that every year except 2007 current assets percentage is increasing which improves the liquidity position of the company. As a result, we see that they can pay their current liabilities by current assets in 2009 and 2010 whereas it is not possible other years.

Percentage of share capital is decreasing; revenue is increasing (except 2007) and capital reserve is also decreasing. Their total equity percentage is also fluctuating in all the years and it is the highest in 2007. It may be a result of change in capital structure policy.

Their long term liabilities were higher in earlier years and are the lowest in 2010(6.33%). Their credit liabilities is increasing and accruals is increasing

125

and tax provision is increasing. Short term bank loan and bank draft was their earlier years. As a result, current liabilities percentage is fluctuating. Their total liabilities were decreasing year by year which indicates that they relying a little bit less in external fund but as stated earlier, it may be a result of their capital structure policy. Their receivable is highest in 2008 with 5% of total asset. In 2008, their trade debtor was also the highest with 3.81% which reflect that BATBC maintains an effective credit policy strictly. BATBCs advances, deposit and prepayments are increasing every year expect the year 2007. It means they are investing their capital in non-cash generating assets and since this percentage is increasing, it is obvious that they are relying more on this assets. BATBC has the highest cash percentage in the year 2010 (16.80%) and it was increasing since 2006. It indicates BATBC is becoming financially stronger than previous years. It certainly improves the liquidity positions of the company which is a positive signal to the creditors and short term lenders but shareholders may not like it. Because the percentage of idle capital is increasing. From the common size statement, we that every year except 2007 current assets percentage is increasing which improves the liquidity position of the company. As a result, we see that they can pay their current liabilities by current assets in 2009 and 2010 whereas it is not possible other years. Percentage of share capital is decreasing; revenue is increasing (except 2007) and capital reserve is decreasing. Their total equity percentage is also fluctuating in all the years and it is the highest in 2007. It may be a result of change in capital structure policy. Their long-term liabilities were higher in earlier years and are the lowest in 2010(6.33%). Their credit liabilities is increasing and accruals is increasing

125

and tax provision is increasing. Short-term bank loan and bank draft was their earlier years. As a result, current liabilities percentage is fluctuating. Their total liabilities were decreasing year by year which indicates that they relying a little bit less in external fund but as stated earlier, it may be a result of their capital structure policy. RATIO ANALYSIS 1. Activity Ratio Activity Ratios
Short term Activity Ratios Inventory Turnover Ratio (In Times) Avg. No. of days inventory in stock Receivables turnover ratio (in times) Avg. No. of days receivable outstanding Payable turnover ratio (in times) Avg. no. of days payables outstanding Long term activity ratios Fixed assets turnover Total assets turnover 2010 2009 2008 2007 2006

3.63 100.67 290.51 1.26 7.9 46.23 3.92 1.56

3.86 94.65 78.99 4.62 9.31 39.19 3.06 1.53

3.25 112.15 47.34 7.71 10.55 34.61 2.62 1.51

2.78 131.34 66.94 5.45 13.33 27.37 2.28 1.37

2.32 157.06 100.59 3.63 10.89 33.51 2.28 1.33

3 00 2 50 2 00 1 50 1 00 50 0 2010 200 9 2 008 2 007 20 06

Inventory Turnover R atio Avg No. of days . inventory in s tock R eceivables turnover ratio Avg No. of days . receivable Payable turnover ratio Avg no. of days . payables F ed as ets turnover ix s Total as ets turnover s

125

INTERPRETATION: INVENTORY TURNOVER RATIO means how many times inventory has turned over or sold in a year. Higher the ratio indicates that the company can sell inventory very rapidly. Inventory turnover ratio of BATBC was increasing from 2006-2009. So, their inventory management is getting better year by year. In 2010, it decreased slightly, as a result of decrease in COGS and an increase in inventory level. INVENTORY TURNOVER PERIOD indicates how many days inventories are kept in the warehouse to sell. Shorter the ratio is better for the company. Lower ratio indicates that investors do not remain rather turn over rapidly from the time of acquisition to sales. BATBCs inventory turnover period was decreasing from 2006-2009 which indicated their efficiency was increasing in inventory management but in year 2010, the turnover period increased due to lower turnover ratio with low COGS and high inventory. RECEIVABLE TURNOVER RATIO measures how many times receivable are turned over in a given year. It also measures the effectiveness of the firms credit policy. It also indicates the level of investment needed to maintain the firms sales level. Higher the ratio is better for the firm as it indicates that the company can convert their account receivable into cash very quickly. From 2006-2010, it was decreasing. Because receivables were increasing at higher proportion than sales was increasing. It means that their credit policy was becoming relaxed. In 2009, their receivable decreased significantly which caused the turnover ratio to increase and sales also increased. In 2010, receivable increased and sales increased than previous years. Although there is an increase in receivables, still this ratio increased in 2010 due to lower receivables from previous year. Therefore, the ratio appeared better in last two years because of increase in sales and significant decrease of receivables in 2009. RECEIVABLES TURNOVER PERIOD indicates how many days a company takes to collect its receivables. Shorter the receivable is better for that firm because it indicates that the company takes fewer days to collect

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cash from the receivables. From the analysis we can say that the receivable turnover period 2006-2010. It was not a good standing for BATBC. However, it started to decrease in subsequent years. In 2010, it decreased significantly due to a significant increase in receivables turnover ratio. PAYABLE TURNOVER RATIO measures how many times the payable is turned over in a year that means how many times the account payable has been in a given year. The period starts from purchasing raw material on credit and ends at the time of payment. Lower the ratio is better. From 2006-2010 the ratio increased in 2007 only but in other years it was decreasing. In 2007, it increased because of purchase account which is calculated by adding COGS to change in inventory. In 2007 payables were lower than 2006 and thus average payables decreased and made the ratio higher although the inventories were lower in 2007. From 2009, payables were increasing at a higher rate than inventories were. So, the ratio started to decrease in subsequent year. PAYABLE TURNOVER PERIOD indicates how many days the company takes to pay its creditors. The higher the ratio is better but from the analysis we can see the turnover period decreased in 2007 because turnover ratio increased in the year and in subsequent year it was increasing as a result of decrease in payable turnover ratio. TOTAL ASSET TURNOVER RATIO indicates that with a given level of total assets how much sales a company can generate or how much total assets are required to generate a given level of sales. Higher the ratio is better and indicates the efficiency in using total assets. From analysis we can see that BATBC has an increasing or positive trend in its turnover ratio. From 20062010, the ratio is increasing and indicating that every BATBC is adding some assets and these additional assets are generating sales. FIXED ASSETS TURNOVER RATIO indicates how efficiency the company can use its fixed assets to generate sales or how much fixed assets are required to generate level of sales. Higher the ratio indicates the efficiency in using fixed assets. The ratio is same in 2006 and 2007. It started to increase

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from 2009 up to 2010. Sales were increasing from 2006 to 2010 but it happened due to increase (2007) and decrease (2009-2010) in fixed assets.

2. LIQUIDITY RATIOS
LIQUIDITY RATIOS Current Ratio Quick Ratio Cash Flow from operation 2010 1.35 0.53 0.3 2009 1.08 0.3 0.38 2008 0.88 0.29 0.21 2007 0.74 0.16 0.37 2006 0.9 0.14 0.43

INTERPRETATION: CURRENT RATIO measures the ability of a firm to payout its current liability by using its all-current asset. Higher the ratio indicates a good liquidity position. After calculating the ratios of BATBC, we can see that from 2006 to 2010 the ratio is increasing except the year 2007 in which the ratio decreased. Therefore, it can be a signal of good liquidity position. Because last two years have ratio of more than 1. It means that BATBC is capable of paying out its current liabilities by its current assets.

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QUICK RATIO is more conservative measurement of liquidity ratio as it excludes inventory and prepaid expenses from its current assets. The ratio of BATBC is showing an increasing trend which is good. There is a huge difference between current ratio and quick ratio in every year. It means that inventories and advanced, deposits and prepayments are large in amounts, which are not quick assets. Although it is increasing, the company is not able to pay all its current liability using only the quick assets (cash and receivables). There is a large amount of inventory (It is two steps away into cash) and prepayments (that does not generate any cash) are included in the current asset. Therefore, this is not a healthy quick ratio position of the company.

CASH FLOW EROM OPERATION measures liquidity by vomparing actual cash flows (instead of current and potential cash resources) with current liabilities. This ratio avoids the issues of actual convertibility to cash turnover and the need for minimum level of working capital (cash) to maintain operation. From the analysis, we can see that cash flow generated from operation is not sufficient to pay out or cover current liabilities. From 2006 to 2008 it decreases and from 2008 to 2010 it starts to increase. It is because of variation in cash from operation and current liabilities. This ratio does not represent any strong liquidity position for BATBC.

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3. PROFITABILITY RATIOS Profitability Ratio Gross Profit Margin Operating Profit Margin Net Profit Margin Return On Assets (ROA) Return On Equity (ROE) 2010 35.86% 15.48% 11.89% 18.51% 42.69% 2009 29.70% 10.91% 6.70% 10.25% 26.59% 2008 39.31% 7.36% 3.28% 4.95% 13.73% 2007 37.90% 6.30% 2.51% 3.45% 8.69% 2006 41.51% 11.97% 7.80% 10.38% 26.27%

INTERPRETATION: GROSS PROFIT MARGIN shows how much gross profit is earned from the total sales and it also show the relationship between sales and manufacturing costs. Because the ability to control costs in relation to revenues enhances earnings power. It expresses gross profit as a percentage of sales. The higher cost, the lower the ratio. Higher the ratio is better, because cost is lower. From the analysis, no consistent trend can be found out. It fluctuates throughout five years. It is the lowest in 2009 indicating the manufacturing cost is higher in this year. I is the highest in 2006 indicating that manufacturing cost is the lowest here. As it is lower in recent years among past several years, it should

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not be considered as a positive indication. Because BATBC is has inefficiency in managing its manufacturing cost. OPERATING PROFIT MARGIN shows how much operating profit is earned from its core business which excludes all effects of non operating activities, investment position, and capital structure and tax differences between the companies. In this case, the operating margin has gone down substantially due to deduction of operating margin from gross profit. But operating expenses is much higher in 2006, 2007 and 2008 amounting to approximately 30% of sales although they had profit on sales of property, plant and equipment in 2006 and 2008. In 2009 and 2010, operating expense has been reduced (with loss on disposal of property, plant, equipment) to approximately 20% of sales which is a good indication for BATBC. NET PROFIT MARGIN shows the net income generated from sales. Higher the ratio indicates that the company can earn more income from its operation. From the table, it can be seen that net profit margin decreased in 2007 but it started to increase in subsequent years, because profit before tax was lower in 2007 and increased in later years. RETURN ON ASSETS compare income with total assets. It measures managements ability and efficiency in using the firms assets to generate profits. It reports the total return accruing to all providers of capital. Higher the ratio is better. Compared to year 2006 it decreased to almost one-third portion in 2007. Compared to assets employed, the return is much lower which is not good for the company. The ratio is started to increase in later years and significantly in last two year. If we disaggregate ROA we get net profit margin and total assets turnover ratio. Total assets turnover ratio is increasing which indicates that BATBC is efficient enough in managing its assets. ROA mainly decreased due to a decrease in net profit margin. RETURN ON EQUITY measures the return that is available to the firms shareholders. Higher the ratio is better. In year 2007, the ratio decreases extensively and in subsequent years it increases. If we divide this ratio, we get profit margin ratio, total asset turnover ratio and capital structure ratio

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(assets/equity). This ratio decreases due to extensive decreases in profit margin ratio (one of the components of ROE) in 2007 although in this year asset to equity ratio was higher ( debt to capital was higher). But in later years it increases due to increase in its component ratios.

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Shareholdings Position of British American Tobacco of the last four years

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9. Shareholdings Position of British American Tobacco of the last four years:

Shareholdings Chart for the year 2007
The names of the shareholders along with the position of their shares are listed below:
NAME OF SHAREHOLDERS SHARES HELD PERCENTAGE OF HOLDINGS 65.91%

i) Parent / subsidiary / associate / related 39,545,358 parties : Raleigh Investment Co. Ltd. ii) Directors / CEO/ CS / CFO / Audit Head and their spouse and minor children. iii) Executives (Head of functions) iv) Shareholders, who holds 10% or more : Investment corporation of Bangladesh v) Other Shareholders, who hold less than 10% Sadharan Bima Corporation Bangladesh Shilpa Rin Sangstha President Peoples Republic of Bangladesh Sena Kalyan Sangstha Others Total 1,692,047 637,297 386,824 314,958 3,341,656 nil nil 14,081,860

nil nil 23.47%

2.82% 1.06% 0.64% 0.52% 5.58%

60,000,000

100.00%

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Shareholdings Chart for the year 2008

The names of the shareholders along with their position of the shares have been listed below:
NAME OF SHAREHOLDERS SHARES HELD % HOLDINGS 65.91% OF

i) Parent / subsidiary / associate / related 39,545,358 parties : Raleigh Investment Co. Ltd. ii) Directors / CEO/ CS / CFO / Audit Head and their spouse and minor children. iii) Executives (HOD) iv) Shareholders, who hold 10% or more : Investment corporation of Bangladesh v) Other Shareholders, who hold less than 10% Sadharan Bima Corporation Bangladesh Shilpa Rin Sangstha President Peoples Republic of Bangladesh Sena Kallyan Sangstha Others Total 1,692,397 635,269 386,824 314,958 3,340,234 nil nil 14,084,960

nil nil 23.47%

2.82% 1.06% 0.64% 0.52% 5.58%

60,000,000

100%

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Shareholdings Chart for the year 2009

The names of the shareholders along with their position of the shares have been listed below: NAME OF SHAREHOLDERS SHARES HELD % HOLDINGS 65.91% OF

i) Parent / subsidiary / associate / related 39,545,358 parties : Raleigh Investment Co. Ltd. ii) Directors / CE/ CS / CFO / Audit Head nil and their spouse and minor children. iii) Executives (HOD) nil iv) Shareholders, who hold 10% or more : Investment corporation of Bangladesh v) Other Shareholders, who hold less than 10% Sadharan Bima Corporation Bangladesh Shilpa Rin Sangstha President Peoples Republic of 58 4,509,524 60,000,000 Bangladesh Sena Kallyan Sangstha Others Total 1,692,397 634,729 386,824 314,9 12,916,210

nil nil 21.53%

2.82% 1.06% 0.64% 0.52% 7.52%

100.00%

Shareholdings Chart for the year 2010

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The names of the shareholders along with their position of the shares have been listed below:
NAME OF SHAREHOLDERS i) Parent / subsidiary / associate / related parties : Raleigh Investment Co. Ltd. ii) Directors / CE/ CS / CFO / Audit Head and their spouse and minor children. iii) Executives (HOD) iv) Shareholders, who hold 10% or more : Investment corporation of Bangladesh v) Other Shareholders, who hold less than 10% Sadharan Bima Corporation Bangladesh Shilpa Rin Sangstha President Peoples Republic of Bangladesh Sena Kallyan Sangstha Others Total nil nil 11,256,410 1,692,397 604,929 386,824 155,408 6,358,674 60,000,000 nil nil 18.76% 2.82% 1.01% 0.64% 0.26% 10.60% 100.00% SHARES HELD 39,545,358 % OF HOLDINGS 65.91%

10. General Administration:

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General Administration of an organization refers to the basic functional matters of personnel, welfare and facilities of an organization. A company Secretary of an organization should have control over the general administration of that organization. The concerned controlling areas of a company secretary on general administration of any organization are presented below:

Welfares
Staff Workers Union Training Medical Agreement

Facilities
Accommodation Traveling Support Service Housing and Securities

Personnel
Staffing Posting Assessment Disciplinary

The company Secretary of British American Tobacco exclusively concerns for secretarial matters. The respective departments such as Human Resources, Finance, and Marketing etc are supervised by the respective department managers. A few trained people are enough to develop an organization. British American Tobacco is continuously providing training to its employees to develop human resources for the organization itself.

11. Conclusion:
British American Tobacco Bangladesh Company Limited is one of the leading multinational companies in Bangladesh. The Company is leading Bangladeshs cigarette

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industry with a market share of more than 50%. I consider myself as a lucky student to have been able to complete my internship program in such a huge multinational organization. As the company places their internees randomly in different departments, so regardless of being a student of marketing, I was placed in the Legal and Secretarial department. And I have worked mainly on the secretarial matters there. The major activities of Legal and Secretarial includes litigation management, combatillicit trade, trade marks & agreement management, in-house legal counsel, share management which is listed with two stock exchanges and operating under central depository system, company secretarial function, records management, shaping regulatory environment, trust fund management, policy compliance etc. Legal and Secretarial function also drives to ensure Corporate Governance in the company. The Legal and Secretarial department is functioning under the supervision of one common Company Secretary, but other departments are being run by their respective heads of the departments. The financial period of the British American Tobacco is January to December and financial statements are prepared under the historical cost convention in accordance with applicable International Accounting Standards in Bangladesh, which does not vary from the requirements of the Companies Act, 1994; the Listing Regulations of the Stock Exchanges, the Securities and Exchange Rule and rules applicable in Bangladesh. Finally it can be said, corporate culture of British American Tobacco Bangladesh Company Limited reflects that there is an existence of the corporate governance in this organization, though there are some limitations of company secretarys control over the functions of finance and accounts. And the automated Share Management System (SMS) and the functions of the secretarial department make British American Tobacco as a unique and mini Central Depository System. It is presumed that the participation of British American Tobacco Bangladesh Company Limited is very significant in the true operation of Central Depository Bangladesh Limited (CDBL).

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12. Reference and Bibliography:

Books and Journals:

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1. 2. 3. 4. 5.

Annual Reports of BAT Bangladesh 2004-2009 BAT Social Reports. Lecture sheets served from BAT. Book of Corporate laws and Regulations. Handbook of Company Secretary of Muqtadir.

Internet:
1. 2. 3. www.bat.com www.bangladeshinfo.com www.google.com

Others:
1. 2. 3. Working Experience. Interviews. Interest.

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