1. Financial Report on
British American
Tobacco
Year 2013
MuhammadTanvir Hossain : 13164042
SayedMohammadAminFaysal : 13164083
Md. Rajibul Haque : 13164096
Rossi NormanDias : 13164082
Kazi Mitul Mahmud : 12264047

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Introduction:
This is a financial report based on British American Tobacco Bangladesh, which is a well-known
tobacco company in the world. In this report the substance below will be analysed the financial
performance in the year ending 2013.
"British American Tobacco Bangladesh strongly believes that success and responsibility go
hand in hand. As the largest private sector tax payer of the country, we are playing our part as a
responsible corporate citizen" Arun Kaul, Managing Director.
The Company:
The presence of British American Tobacco in this part of the world can be traced back to 1910.
Beginningthe journey asImperialTobacco101 yearsago, the Companyset up its first sales depot at
ArmanitolainDhaka.Afterthe partition of Indiain1947, PakistanTobacco Companywas established
in 1949. The first factory in Bangladesh (the then East Pakistan) was setup in 1949 at Fauzdarhat in
Chittagong. In 1965, the second factory of Pakistan Tobacco Company went into production in
Mohakhali, Dhaka.Thereafteritbecame BangladeshTobacco CompanyLimitedin1972 immediately
after Bangladesh's independence. In 1998, the Company changed its name and identity to British
American Tobacco Bangladesh ("BAT Bangladesh") aligning the corporate identity with other
operating companies in the British American Tobacco Group.
BAT Bangladeshisa part of BAT plc,the world's most international tobacco group, with brands sold
in 180 markets around the world. We make high quality tobacco products for the diverse
preferencesof consumers,spanningthe business'from crop to consumer' and we are committed to
embedding the principles of corporate social responsibility Groupwide.
Our Shareholders
We were amongthe first companies to be listed on the Dhaka and Chittagong Stock Exchanges and
currently rankedamongstthe top 10 companies in terms of market capitalisation. British American
Tobacco Group holds 65.91% of our shares; 17.52% is owned by Investment Corporation of
Bangladesh;ShadharanBima Corporation, Bangladesh Development Bank Limited, Government of
People's Republic of Bangladesh, Sena Kallyan Sangstha own 4.71% and a further 11.86% is owned
by other shareholders.
Our Portfolio of Products
Our success comes from satisfying informed adult smokers. We manufacture and market high
quality and well established international cigarette brands as well as local brands. The brand
portfolioof BATBangladeshcurrently consistsof Benson&Hedges,JohnPlayer Gold Leaf, Pall Mall,
Capstan, Star, Scissors, Bristol, Pilot and Hollywood .
Our Operations
We grow our tobacco leaves through our registered farmers in Kushtia, Chittagong, Manikganj and
Rangpur zones. Both our Head Office and Cigarette Manufacturing Plant are located in Mohakhali,
Dhaka. We have one Green Leaf Threshing Plant in Kushtia and a Redrying Plant in Manikganj.
Our People – Our Strength
BAT Bangladesh employs more than 1,200 people directly and about 50,000 people indirectly as
farmers,distributorsandlocal suppliers.We take greatpride insayingthat BAT Bangladesh is one of
the most preferred employers in the country. It is our pool of talented people who bring their
difference everyday and make BAT Bangladesh a great place to work for all of us.

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Our Contribution
BAT Bangladeshisone of the largestmultinational companies in Bangladesh. Consequently, we are
alsoone of the largestprivate sectortax payersinthe formof Supplementary DutyandValue Added
Tax. Over time, we have successfully established ourselves as the company contributing to
economic, social and human resource development.
Financial Report 2013:
It is a pleasure and privilege on the part of the Board of Directors to place herewith the Directors'
Report and Auditors' Report together with the audited financial statements of British American
Tobacco Bangladesh Company Limited for the year ended 31 December 2013 before the
Shareholders of the Company.
Key Strategic Pillars
Throughout 2013 your Company continued to focus on the key strategic pillars of Growth,
Productivity, Responsibility and Winning Organisation as enablers to deliver the desired business
resultsforthe financial year.Thisreportpresentsdiscussions onthe salientfeaturesandactivitiesof
the business under each pillar and then highlights the financial performance of your Company.
Growth
Industry Outlook
Despite considerable macroeconomic challenges in 2013, the cigarette industry witnessed a
moderate growthof around20% inthe year.But the volume growthisexpectedto decline in future
due to yearon year price increase over inflation with the tax on biri remaining at the same level in
the last fewyears'budget.LowSegmentgrowthcontinuedandMediumSegment declined steadily.
The High segment showed some signs of recovery, but post mid-year tax-led price increase, the
Premiumsegmentcame underheavypressure and no sign of growth momentum was visible in the
segment.Going forward, the different segments in the industry will continue this trend under the
prevailing market conditions.
0
5
10
15
20
25
30
35
40
45
2009 2010 2011 2012 2013
Leaf Export Earnings in million
USD

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Financial Statement For The Year 2013:
The key operating and financial data for the year 2013 along with immediate preceding two years
are presented below:
British American Tobacco Bangladesh Company Limited
Statement of Financial Position as 31 December 2013
Description 2011 2012 2013
Taka '000s Taka '000s Taka '000s
ASSETS
Non-CurrentAssets:
Property,Plantandequipment 5,376,634.00 5,861,627.00 5,619,130.50
CurrentAssets:
Inventories 5,373,033.00 4,956,887.00 5,164,960.00
Trade & Otherreceivables 973,825.00 937,873.00 955,849.00
Advance, Depositandprepayments 590,164.00 1,007,539.00 798,851.50
Cash and Cashequivalents 837,393.00 2,270,567.00 1,553,980.00
Total currents assets 7,774,415.00 9,172,866.00 8,473,640.50
Total assets 13,151,049.00 15,034,493.00 14,092,771.00
EQUITY AND LIABILITIES
Shareholder'sequity:
Share capital 600,000.00 600,000.00 600,000.00
Capital reserve 64,896.00 64,896.00 64,896.00
Revenue reserve 5,246,404.00 6,368,044.00 5,807,224.00
Total equity 5,911,300.00 7,032,940.00 6,472,120.00
Non-currentliabilities:
Gratuity 252,089.00 240,592.00 246,340.50
Deferredtax liability 669,079.00 723,643.00 696,361.00
Obligationunderfinancelease 17,876.00 7,541.00 12,708.50
(due after oneyear)
Total non-currentliabilities 939,044.00 971,776.00 955,410.00
Current liabilities:
Provisionforexpenses 1,838,021.00 2,188,035.00 2,013,028.00
Trade and otherpayables 3,467,716.00 3,245,676.00 3,356,696.00
Provisionforcorporate Tax 977,943.00 1,585,731.00 1,281,837.00
Obligationunderfinancelease 17,025.00 10,335.00 13,680.00
(due after one year)
Total current liabilities 6,300,705.00 7,029,777.00 6,665,241.00
Total equityand liabilities 13,151,049.00 15,034,493.00 14,092,771.00

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British American Tobacco Bangladesh Company Limited
Statement of Comprehensive Income For the year ended 31 December 2013
Description 2011 2012 2013
Taka '000s Taka '000s Taka '000s
Gross Turnover 75,357,351.00 90,174,080.00 95,180,572.83
Supplementary duty&VAT 52,088,490.00 62,702,736.00 57,395,613.00
Net turnover 23,268,861.00 27,471,344.00 37,784,959.83
Cost of Sales 13,455,535.00 15,946,224.00 14,700,879.50
Gross Profit 9,813,326.00 11,525,120.00 23,084,080.33
Operatingexpenses 4,567,237.00 4,612,418.00 4,589,827.50
Operating profit 5,246,089.00 6,912,702.00 18,494,252.83
Otherincome 36,868.00 50,820.00 43,844.00
NetFinancial income /(expense) (110,687.00) (119,878.00) (115,283.00)
5,172,270.00 6,843,644.00 18,422,813.83
Workers' profitparticipation fund 258,614.00 342,182.00 300,398.00
Profitbefore income tax 4,913,656.00 6,501,462.00 18,122,415.83
Income tax expense
Currenttax 2,211,975.00 2,505,258.00 2,340,099.19
Deferredtax 151,090.00 54,564.00 102,827.00
2,363,065.00 2,559,822.00 2,442,926.19
Profit for the year 2,550,591.00 3,941,640.00 15,679,489.64
Othercomprehensiveincome - - -
Total comprehensive income forthe year 2,550,591.00 3,941,640.00 15,679,489.64
Taka Taka Taka
EarningsPer Share 42.51 65.69 261.32

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An interim cash dividend of 100% i.e. Tk. 10 (ten) per share amounting to Tk 600,000,000 was paid in November 2013.
In view of the performance of the Company and the current cash position, the Board now recommends a final cash
Dividend of 400% i.e Tk. 40 (forty) per share amounting to Tk. 2,400,000,000 for the year 2013, to be approved in the
41th Annual General Meeting of the Company. Inclusive of the 100% interim dividend paid already, the total Cash
Dividendof the Company, accordingly,would standat 500% for the year 2013. After approval of the above mentioned
proposed final dividend, the summary of the total dividend paid in 2013 is represented below:
British American Tobacco Bangladesh Company Limited
Statement of changes in Equity for the year ended 31 December 2013
Description Share Revenue Capital
Capital reserve reserve Total
Taka
'000s Taka '000s Taka '000s Taka '000s
Balance at 1 January 2011 600,000 5,575,813 64,896 6,240,709
Dividendpaidin2011 2,880,000 2,880,000
Final Dividendfor2010 2,580,000 2,580,000
InterimDividendfor2011 300,000 300,000
Total comprehensiveincome forthe
year 2,550,591 2,550,591
Balance as at 31 December2011 600,000 5,246,404 64,896 5,911,300
Balance at 1 January 2012 600,000 5,246,404 64,896 5,911,300
Dividendpaidin2012 2,820,000 2,820,000
Final Dividendfor2011 2,220,000 2,220,000
InterimDividendfor2012 600,000 600,000
Total comprehensiveincome forthe
year 3,941,640 3,941,640
Balance as at 31 December2012 600,000 6,368,044 64,896 7,032,940

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Balance at 1 January 2013 600,000 5,411,109 64,896 6,076,005
Dividendpaidin2013 2850000 2850000
Final Dividendfor2012 2,400,000 2,400,000
InterimDividendfor2013 450,000.0 450,000
Total comprehensiveincome forthe
year 15,679,490 15,679,490
Balance as at 31 December2013 600,000 18,240,599 64,896 18,905,495

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British American Tobacco Bangladesh
Company Limited
Statement of cash flow for the year ended 31 December 2013
2011 2012 2013
Cash flowsfrom Operating
activities;
Collectionfromdistributors,leaf
export& others 90,283,106.00 74,950,453.00 82,616,779.50
Paymentforcost & expense (21,590,921.00) (17,794,614.00) (19,692,767.50)
Supplementaryduty&Vatpaid (61,324,848.00) (52,099,969.00) (56,712,408.50)
Cash generatedfrom
operation 7,367,337.00 5,055,870.00 6,211,603.50
Income tax paid (1,897,470.00) (1,880,970.00) (1,889,220.00)
Interestpaid (119,878.00) (110,687.00) (115,282.50)
Netcash flowsfrom
operatingactivities 5,349,989.00 3,064,213.00 4,207,101.00
Cash flowsfrom Investing
activities;
Acquisitionof plant,property&
equipment (1,116,245.00) (707,823.00) (912,034.00)
Proceedsfromsalesof plant,
property & equipment 30,145.00 27,686.00 28,915.50
Netcash usedin
investingactivities (1,086,100.00) (680,137.00) (883,118.50)
Cash flowsfrom Financing
activities;
Finance lease obligation (17,025.00) (17,085.00) (17,055.00)
Dividendpaid (2,813,690.00) (2,873,451.00) (2,843,570.50)
Netcash usedin
financingactivities (2,830,715.00) (2,890,536.00) (2,860,625.50)

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BritishAmerican Tobacco Bangladesh has cash and cash equivalents at the end of the year 2013 Tk.
155 corers, which is 93% more than year 2012.
Grossturnover for the year 2013:
Gross Turnoveraverage of (2011+2012) 82,765,715.50
20% increase 12,414,857.33
95,180,572.83
Profit after income tax:
2011 2012 2,013.00
Profitbefore income tax 4,913,656 6,501,462 5,707,559.00
Percentage of Tax 45% 38% 0.41
CurrentTax 2,211,975 2,505,258 2,340,099.19
Profitafterincome tax 2,701,681 3,996,204 3,367,459.81
BritishAmericanTobaccoBangladeshcontinuestocontribute 2/3rd of the total tax collections from
the cigarette industry. In 2013, the Company contributed BDT 6,698 corers as supplementary duty,
value addedtax and othertaxes.Thisrepresents an increase of BDT 1,107 corers. The Company will
continue tosupportGovernment proposals that establish a sustainable level of tax contribution to
the National Exchequer while ensuring a sustainable growth for the industry.
In the National Budget for 2012-2013, the Corporate Tax rate for a cigarette manufacturer listed in
Stock Exchange was increased from 27.5% to 35%. Along with this increase, 10% rebate for paying
more than 20% dividendswaswithdrawn.Asaresult, applicableCorporate Tax rate forthe Company
has increasedfrom24.75% to 35%. The Companyacknowledges the Government’s revenue growth
targets to support the momentum of a growing and expanding economy and it has been working
with National Board of Revenue (NBR) over the years to ensure sustainable revenue growth from
cigarette industryinthe form of indirecttax.However,the Companystronglyfeels that by targeting
the Corporate Tax structure of cigarette manufacturer listed in the Stock Exchange, Government’s
gain is minimal. Rather, it significantly impacts the shareholders’ return (which includes the
Government of Bangladesh), discourages the Company to declare high dividends, and takes away
the incentive forothertobaccocompaniestobe listedinthe stockexchange. The Company strongly
Netincrease /(decrease) incash&
cash equivalentforthe year 1,433,174.00 (506,460.00) 463,357.00
Cash & cash equivalentatthe
beginningof the year 837,393.00 1,343,853.00 1,090,623.00
Cash& cash equivalentsat
the endof the year 2,270,567.00 837,393.00 1,553,980.00

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hopes that the Government will reinstate the 10% tax rebate for paying more than 20% dividends
when considering the upcoming National Budget.
Conclusion:
The Company grew its gross turnover to BDT 9,518 corers, up by BDT 501 corers from the previous
year. This increase was driven by volume growth and tax-led price increases. Profit before tax
decreased by 38% from BDT 650 corers last year to BDT 570 corers in 2013. The higher profit before
tax reflects higher volumes, better brand mix and increased price, as well as cost savings and
productivity initiatives driven across the Company. There is no significant variance between the
quarterly and the annual financial performance of your Company for the year 2013. Furthermore,
there isno extra-ordinary gainorloss in 2013. The notes to the annual financial statements explain
the variations against the previous year.