Company Overview
B
ritish American Tobacco is a British multinational tobacco company headquartered in London, United Kingdom. It is the world’s second-largest quoted tobacco company by market share (after Philip Morris International), and has a leading position in over 50 countries and operations in more than 180 countries. Its brands include Dunhill, Kent, Lucky Strike and Pall Mall. BAT has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 26 December 2011 it had a market capitalization of £59.2 billion, the sixth-largest of any company listed on the London Stock Exchange. It has a secondary listing on the Johannesburg Stock Exchange. They are leading more than 50 countries and have their presence in more than 180 countries with approximately 50,000 employees. BAT is committed to providing consumers with pleasure through excellent products, and to demonstrating that they are meeting their commercial goals in ways that are consistent with reasonable societal expectations of a responsible tobacco group in the 21st century. BAT is designed to deliver their vision and build shareholder value. It is based on growth, funded by productivity and delivered by a winning organization that acts responsibly at all times.

History
Born international
O
n 29 September 1902 the UK’s Imperial Tobacco Company and the American Tobacco Company of the United States form a joint venture, the British American Tobacco Company, in a bid to end an intense trade war. Under the agreement, the two companies will not trade in each other’s domestic markets and acquire the right to use each other’s brands and trade marks in their own territory. Imperial Tobacco's and American Tobacco’s businesses outside the ‘home’ markets of the UK and US are transferred to British American Tobacco, giving the new company operations in countries as diverse as Canada, Japan, Germany, Australia, South Africa and China. James ‘Buck’ Duke, an austere, self-taught commercial genius, becomes the company’s first chairman. His strategy is to devise a superior product, hire the best people to make it, price it as low as possible, and mechanize, organize and merchandise. The first decade is a chronicle of expansion: to the West Indies in 1904; to India, Ceylon and Egypt in 1905; Holland, Belgium, Sweden and Norway in 1906; Finland, Indonesia and East Africa in 1908; and Malaya (now Malaysia) in 1911. By 1910, British American Tobacco’s sales are more than 10 billion cigarettes. Profits grow correspondingly quickly.

BAT becomes British
B
y 1911, the American Tobacco Company divests its shares in the joint venture. British American Tobacco is listed on the London Stock Exchange and British investors acquire most of its American parent's shares. The company is now free to conduct its business independently throughout the world, except in the UK where territorial agreements remain with Imperial.
New markets
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cross the South Atlantic, the company is busy entering new markets. In 1913, a local tobacco manufacturer in Argentina, Bozetti & Co. is acquired. One year later, Brazilian company Souza Cruz is purchased – today, one of the Group’s leading subsidiaries.
First World War 1914–1918
W
ith the coming of war in 1914, the additional demand from the armed forces for tobacco stretches the company’s manufacturing capacity to the limit. In 1915, British American Tobacco cigarette sales total 25 billion. The First World War creates a unifying corporate culture from what had previously been a disparate Group of companies, while the recruitment of women to replace the men who had gone to war changes the workplace forever.
The post-war world
B
ritish American Tobacco’s enormous market is the fruit of continuing expansion. In 1921, Cigarrera Bigott Sucs is formed in Venezuela and, in the following few years, acquisitions are made in Chile, Mexico and Central America. Duke resigns as chairman in 1923. His successor is Sir Hugo Cunliffe-Owen, another powerful, decisive personality. One of Sir Hugo’s first moves as chairman is to acquire, in 1925, the overseas business of Ardath Tobacco and with it the rights of the State Express brand. British American Tobacco moves into the US market in 1927 with the acquisition of a small North Carolina company, Brown & Williamson. By 1927 – the company’s 25th anniversary – it is recognized as one of the UK’s leading companies, with 120 subsidiaries and more than 75,000 employees worldwide. It has gained a toehold in the American market and has absorbed its only international rival, Ardath; British American Tobacco is well established in every continent of the globe and profits are running at more than £6 million annually.
A decade of consolidation
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ith tough trading conditions created by the Wall Street Crash in 1929, territorial expansion slows during the 1930s. Despite the economic downturn, British American Tobacco companies have factories in most countries without government monopolies by 1932. That same year, company depots develop independent distribution networks, which become fully-fledged subsidiaries. Leaf-growing and manufacturing operations are established in India, China, Brazil and Nigeria and Haus Bergmann is acquired in Germany.
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First war, then decolonization, creates turbulent times for British American Tobacco from the 1930s to the 1960s. After the upheaval of the Second World War and the loss of its Chinese operations, the company goes on to lose several end markets. But worldwide sales continue to grow.
Second World War 1939 - 1945
T
he impact of the Second World War on British American Tobacco is no less profound than that of the First World War. European operations are severely disrupted. In the Far East, the company loses contact with companies occupied by the Japanese. In China, where the company’s cigarette sales exceed 55 billion in 1937, the Japanese invasion brings British American Tobacco sales to a halt for more than four years. By 1942, profits that had remained static at £5.5 million right through the depression were down to £3 million. They stayed at that level until the war ended.

The post-war world
B
ritish American Tobacco faces difficult trading conditions around the world with inflation, the high price of leaf and the need to replace assets lost in the war all depressing profits. By 1952, the year of British American Tobacco’s 50th anniversary, the environment in which the company operates begins to change. The turmoil created by war ultimately results in the loss of several end markets, including Egypt, Indonesia and China. But even with political instability in some regions, the company continues to succeed.
New leadership
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ith new Chairman Duncan Oppenheim, 1953 signals a fresh start for the company. Oppenheim’s urbane manner and keen legal intelligence provide a beneficial steadiness during the next 13 years. Between 1953 and 1955, British American Tobacco ranks third among British, French and German companies, measured by company profits. Global sales exceed 280 billion in 1960 with the company reporting record trading profits of more than £58 million. In 1956, British American Tobacco obtains the overseas business of Benson & Hedges. With State Express, Benson & Hedges becomes one of the cornerstones of the Group’s predominance in the international brand market.
Diversification
I n the early 1960s, British American Tobacco begins to diversify into paper and pulp, cosmetics and the food industry. Stakes in Wiggins Teape and Mardon Packaging are among the company’s initial moves. In 1964, acquisitions include the UK’s Tonibell ice cream company and the Lenthéric fragrance house. Brown & Williamson and British American Tobacco companies in South Africa and Australia also begin to invest in the food industry.In 1966, British American Tobacco acquires cigar manufacturer Henri Wintermans and company profits exceed £100m for the first time. It also gains a new Chairman, Denzil Clarke, who accelerates the pace of acquisition.
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By 1970, British American Tobacco has operations in 50 countries.
Diversification with the creation of BAT Industries in the late 1970s and the expansion into financial services in the 1980s gives way by 1989 to a re-focus on the tobacco business.
Acquisition
B y 1970, under new Chairman Richard Dobson, British American Tobacco companies are manufacturing in 140 factories across 50 countries. Two years later, with the revocation of its 1902 agreement with Imperial, it gains exclusive ownership of its original brands, including State Express, in the UK and Western Europe. In the company’s quest for another significant business, British American Tobacco finally settles on retailing where acquisition in the seventies includes Argos in the UK and Saks Fifth Avenue in the United States. In 1976, the Group undergoes radical reorganization. With a new Chairman, Peter Macadam, operations are coordinated under a new holding company, B.A.T Industries. Within two years, Industries is the UK’s third largest company and the largest tobacco manufacturer in the free world with annual sales of 500 billion cigarettes. As the company celebrates its 75th anniversary in 1977, Macadam comments: “We have survived two world wars, the loss of our China business, [and] dispossession in numerous places elsewhere…and we have come through stronger and, I believe, better poised today than we have ever been.” Meanwhile, Brown & Williamson opens its new US$150 million factory in Macon, Georgia. By the end of the decade, British American Tobacco exports the first batch of cigarettes to China since the nationalization of its operations there 30 years before.
By the end of the decade, with its acquisition of Lorillard’s international business, the Group acquires several more key brands, including Kent.
Re-focus
By 1981, trading profits from the tobacco operations have tripled over the previous decade to more than £463 million as production capacity steadily increases.
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ith the acquisition of Eagle Star in 1984, Allied Dunbar the following year, and the Farmers Group in 1988, BAT Industries is by 1989 the largest UK-based insurance group. The same year, with a 24 per cent pre-tax profit increase to more than £2 billion and confronted by a hostile takeover bid, BAT Industries decides to re-focus exclusively on tobacco and financial services and dispose of almost everything else.
New opportunities
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n the 1990s, economic liberalization and the break-up of state monopolies open up new trading opportunities in Central and Eastern Europe and the Far East. British American Tobacco acquires Hungary’s Pecsi Dohanygyar in 1992. Acquisitions and joint ventures follow rapidly in Ukraine, Uzbekistan, the Czech Republic, Russia, Romania and Poland.
Another significant acquisition is that of the American Tobacco Company in 1994, giving British American Tobacco ownership of the Lucky Strike and Pall Mall brands.
Returning to its roots
I
n 1998, BAT Industries divests its financial services businesses. That same year the company acquires Cigarrera La Moderna, the leading cigarette company in Mexico.
In 1998, British American Tobacco p.l.c. becomes a separately quoted company on the London Stock Exchange, with Martin Broughton as its chairman. In 1999, British American Tobacco, the second largest tobacco company, announces a global merger with Rothmans International, the fourth largest. With the merger, British American Tobacco adds to its portfolio several major brands, including Dunhill.
Into the new millennium
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he merger with Rothmans is followed by a major change to the Group’s interests in the Canadian market, now the largest generator of profit for the Group. During 2000, Rothmans' Canadian interests are sold, while the outstanding shares in Imasco, an associate of British American Tobacco, are purchased and its non-tobacco interests are sold. Now a wholly-owned subsidiary focused solely on tobacco, the Canadian operation is known as Imperial Tobacco Canada. In 2001, the Group announces a series of new investments in countries such as Turkey, Egypt, Vietnam, South Korea and Nigeria. British American Tobacco celebrates its centenary in 2002. It reaffirms its faith in its people, its products and the tobacco industry as a whole with new investments in Nigeria, South Korea and Turkey. That same year, it becomes the first tobacco company to publish a Social Report. The following year British American Tobacco gains control of Peru’s Tabacalera Nacional and wins bids for Italy’s former state tobacco monopoly, ETI, and Serbia’s Duvanska Industrija Vranje. It also announces proposals to combine the US business of Brown & Williamson, its US subsidiary, with RJ Reynolds Tobacco Company.In November 2003 Martin Broughton discloses that he plans to retire from British American Tobacco at the end of June 2004 after 10 years leading the Group as Chief Executive and, for the last five, as Chairman. Paul Adams takes over as Chief Executive of the Group in July 2004, with Jan du Plessis as Non-Executive Chairman. In 2004 the US business of Brown & Williamson and RJ Reynolds Tobacco Company are combined and Reynolds American is formed – a stronger, more sustainable business in which British American Tobacco has a 42% share. In 2005 British American Tobacco trials Swedish-style snus in Sweden and South Africa, giving smokers the chance to enjoy a less harmful form of tobacco, without lighting up. The number of snus outlets in the two countries extends in 2006. The year also sees the sale of the Toscano cigar business in Italy. In October the Group exits Formula One motorsport sponsorship - a long-standing commitment consistent with the International Marketing Standards subscribed to in 2001. 2007 sees snus test marketing extended to Canada and the sale of a number of our pipe tobacco trademarks to Danish company Orlik Tobacco Company. In May we sell our Belgian cigar factory and associated brands to the cigars division of Skandinavisk Tobakskompagni. Acquisitions come to the fore in 2008 with our winning US$1.72 billion bid for the assets of Tekel, the Turkish state tobacco company. It is quickly followed by a deal to acquire the cigarette and snus businesses of Skandinavisk Tobakskompagni. 2009 sees another deal concluded: the approx. US$580 million acquisition of Bentoel, Indonesia's fourth largest kretek cigarette maker. Kreteks are made from tobacco and cloves. Richard Burrows takes over as Chairman of British American Tobacco p.l.c. in November 2009. At the end of February 2011, Paul Adams ends 20 years with British American Tobacco, including seven years as Chief Executive. Nicandro Durante takes over as Chief Executive of the Group in March 2011. April sees the establishment of Nicoventures Limited, a stand-alone company to focus exclusively on the development and commercialization of innovative, regulatory approved nicotine products that will offer consumers much of the experience they expect to get from a cigarette but without the real and serious health risks of smoking.2011 concludes with the US$452 million acquisition of Protabaco in Colombia.

BATs’ strategy
O
ur strategy drives our global operations, supported at all times by good corporate governance. The strength of our people and brands; the innovations that help differentiate our products in around 180 markets; our agile and responsible supply chain; and our science-based R&D - these all contribute to the revenue growth that helps build value for our shareholders.

Our vision
Our Group vision is to achieve leadership of the global tobacco industry, not just in volume and value, but also in the quality of our business. To be industry leaders we must continue to demonstrate that we are a responsible tobacco Group with outstanding people, brands and superior products.
Growth
Our strategy to deliver our vision begins with growth and our aim to increase our global market share, with a focus on our Global Drive Brands and other international brands.
Productivity
We target continuous improvements in our cost base that will provide resources to invest in our brands, helping us to grow market share and achieve higher returns for shareholders.
Winning organization
By being a winning organization we can ensure that we attract, develop and retain the best people we need to deliver our strategy for growth.
Responsibility
Our companies and people are required to act responsibly at all times and we seek to reduce the harm caused by our products and our environmental footprint.

BATs’ Brands

M uch of the growth of our leading brands is driven by innovation. We recognize that our business starts with our consumers and our brands. It’s not about encouraging people to start smoking or to smoke more, but about meeting the preferences of adults who have chosen to consume tobacco, and differentiating our brands from their competitors. We have never believed that ‘one size fits all’. Our portfolio of more than 200 brands is based on distinct strategic segments - premium, fresh taste and Adult Smokers Under 30 (ASU30). Our four Global Drive Brands - Dunhill, Kent, Lucky Strike and Pall Mall - cover the premium and value for money price segments. They grew by 8.5 per cent in 2011, or 17.7 billion more cigarettes. While developing our Global Drive Brands is central to our strategy, we are also increasing the profile of Vogue in the premium segment and Viceroy, a leading low price international brand. Much of the growth of our leading brands is driven by innovation – from filters to flavours and packaging to cigarette formats. Overall our brand mix is broadly balanced between premium, mid-price and low-price.

More than cigarettes
While more than 95 per cent of the world’s smokers consume ready-made cigarettes you can find cigar and roll your own tobacco brands in our portfolio. Our cigar brands include Captain Black and the hand-made premium Dunhill Signed Range.
Smokeless too
Some of our Group companies sell Swedish-style snus, a form of smokeless tobacco that is placed under the lip and is reported by several independent health experts as being much less harmful than cigarettes. It’s sold under the Lucky Strike, Granit and Mocca brands.

BATs’ international brands
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s a major international Fast Moving Consumer Goods (FMCG) company, we are proud of our reputation for producing high-quality brands that are chosen by one in eight of the world’s adult smokers.
Our four Global Drive Brands, Dunhill, Kent, Lucky Strike and Pall Mall, accounted for just under 32 per cent of our global volumes in 2011, or 226 billion cigarettes.

Kent was introduced in America in 1952 and is now sold in more than 70 countries. It is our largest premium brand. Annual sales grew by 10 per cent in 2011 to 67 billion cigarettes. Key markets include Russia, Japan, Romania and Ukraine.
The range includes Kent HD, Kent Nanotek - a superslim king size variety - and Kent Convertibles which were launched in 2010 and contain a menthol-flavoured capsule.

Dunhill celebrated its centenary in 2007 and sells in more than 120 countries. Dunhill offers a range of premium and super premium cigars and cigarettes. 48 billion cigarettes were sold in 2011 and key markets include South Korea, Malaysia, Brazil, Taiwan, Saudi Arabia, South Africa and Russia.

Lucky Strike, launched in 1871, is one of the oldest and most iconic trademarks in the world. It’s sold in more than 60 countries. In 2010, the Click & Roll variant was launched which contains a menthol-flavoured capsule. Volumes rose 14 per cent in 2011 to 30 billion cigarettes. Key markets include Germany, Spain, Japan, France, Italy, Chile and Argentina.

Pall Mall was introduced in 1899 and is now sold in more than 100 countries. It is our leading global value-for-money brand and the range includes the Pocket, Nanoking, Slim and Super Slim variants. Pall Mall volumes grew 11 per cent in 2011 to 81 billion cigarettes. Key markets include Pakistan, Germany, Uzbekistan, Italy, Chile and Romania.
While the Global Drive Brands remain central to our strategy, we are also increasing the profile of Vogue and Viceroy.

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

Viceroy is sold in more than 40 countries. Introduced in 1936, key markets today include Russia, Poland, the Czech Republic, 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 Egypt, Yemen, Nigeria, South Africa, Saudi Arabia and France.

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 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 40 countries outside the European Union, including Nigeria, Australia, Saudi Arabia, Bangladesh and Malaysia.

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.

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.

Corporate governance
We are committed to good corporate governance and to achieving our business objectives in a manner which is responsible and consistent with our beliefs in honesty, transparency and accountability. We regard corporate governance not simply as an exercise in compliance, but as a key element underpinning the sustainable, long-term growth of our business. These principles are reflected in our Standards of Business Conduct, which demonstrate our commitment to good corporate behaviour. They have been in place for many years, and continue to be kept under review in order to ensure that they remain at the forefront of best business practice. Every Group company and every employee worldwide is expected to live up to them. In addition, the principles set out within our Statement of Business Principles are designed to help meet the expectations placed on us by our various stakeholders, and they form the basis on which we expect our business to be run in terms of responsibility. The principal governance rules applying to UK companies listed on the London Stock Exchange are contained in the UK Corporate Governance Code, which can be found on the Financial Reporting Council's website. As required by the Code, the Corporate Governance Statement in our Annual Report describes how we apply its Principles and provides our formal report on compliance with its Provisions.

Approaches
Approach to sustainability
S
ustainable business practice is at the heart of our strategy. In 2007, we developed our sustainability agenda, which focuses on five pillars: harm reduction, marketplace, environment, supply chain and people and culture. It aims to build value for our shareholders and other stakeholders by addressing our social, environmental and economic impacts. This means generating returns for our shareholders by doing the right thing by our stakeholders and the environment. This concept of sustainable value underpins all of our sustainability activities. By taking action to address our impacts today, we help our business to thrive in the future.
Our sustainability agenda is an integral part of delivering our Group strategy and comprises five goals. We will: * Strive to bring commercially viable, consumer acceptable reduced-risk products to market; * Take a lead in upholding high standards of corporate conduct within our marketplace; * Actively address the impact of our business on the natural environment; * Work for positive social, environmental and economic impacts in our supply chain; and * Work to ensure we have the right people and culture to meet our goals.
Over the years we have built a strong reputation for CSR and sustainability and have been seen by some as leaders in our industry: from being the first tobacco company to be included in the Dow Jones Sustainability World Index, continuing our inclusion to date; to receiving a number of reporting awards; to achieving platinum status in the UK Business in the Community Corporate Responsibility Index.
However, we also recognize that we do not have all the answers and that sustainability is a long-term commitment for which we need to continually evolve our approach.

Approach to human rights
T
hey expect their companies to respect the universally recognised fundamental human rights of all their employees and we use the United Nations Global Compact’s Principles on human rights which state that: * Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence; and * Make sure they are not complicit in human rights abuses.
We also use the Guidelines for Multinational Enterprises established by the OECD (Organization for Economic Co-operation and Development) which cover all internationally recognized fundamental principles and rights at work and have been multilaterally agreed by governments.
We see it as the responsibility of governments and the political community to promote, secure and protect human rights recognized in international and national law. We recognize that business can contribute to this in the workplace and can use its influence where possible in the supply chain.
Although we do not think businesses should withdraw unilaterally from countries where a government’s human rights record is criticized, as a Group operating in over 180 countries, we are particularly aware of issues around having a presence in countries where poor human rights situations can be accompanied by difficult business environments.
Employment Principles and supply chain
Our approach to human rights is underpinned by our Business Principles, which include our core belief that universally recognized fundamental human rights should be respected. Our Employment Principles embody key internationally recognized aspects of human rights that apply to the workplace. They include important topics such as equality of opportunity and non-discrimination, freedom of association, not condoning or employing child labor, being completely against forced or bonded labor, occupational health and safety, fair remuneration and conditions of work, employee skills development and internal communications and the free flow of ideas. We also strive to encourage our business partners to adopt similarly high standards to our own. Key human rights principles are incorporated in our major supply chain programmes.

Monitoring performance:
Our audit and CSR governance committees, including our Board CSR Committee, regularly monitor the performance of our companies in managing human rights in the workplace and supply chain. All our companies are required to demonstrate that they are embedding our Employment Principles in the workplace and are strongly encouraging key suppliers to meet similar standards. Our governance and auditing particularly monitors the performance of our companies in countries that have been assessed through analyses of human rights risks for businesses by the Maplecroft consultancy. While we do not seek to step into politics or criticize governments, we aim to ensure that in these countries the high standards we set as an employer and responsible operator are consistently maintained.

Employment Planning
Every organization has employment planning. BAT has also its employment planning. They usually forecast their personnel needs based on their mission, strategic goals & objectives &technological and other changes resulting in increased productivity. Although there are several methods to predict personnel needs, but they use managerial judgment because it gives the more real world scenario for personnel needs. They think that the other methods can not give the accurate situation of the personnel needs. These are basically graphical methods, which can not measure the actual personnel needs. But managerial judgment method depends upon the change in productivity, market conditions etc.
Recruitment Policy
British American Tobacco Bangladesh has been in e-resourcing since 2002. They focus on e- based advertisement for more visibility and transparency beside the conventional print media. All recruitment related notices are posted on the www.bdjobs.com website. Candidates are required to fill up the blank resume format provided in the website. A well-structured and systematic selection procedure is followed to get the most suitable candidate. Following the selection procedure, pre-employment medical examination and reference checks are done. They entertain application from recognized universities from home and abroad. Applicant must be a citizen of Bangladesh. They encourage students with good academic track record to apply. They are not prejudiced against race, sex, religion, age etc. Positions will be offered to the candidate on the basis of his/her ability and the requirement of the company.

Selection Process
• If the application is successful, They will be invited to a preliminary interview which will be taken by a member from the function to which they have applied and a member of the Human Resource team.
• As a final candidate, they will be invited to a specifically designed British American Tobacco assessment centre. This will provide them opportunity to demonstrate their skills and suitability through their performance in a number of participative and individual exercises. They will also have the opportunity to meet managers and to gain first hand experience of what it is like to work for British American Tobacco Bangladesh. Regardless of the outcome, participants find it a unique opportunity to demonstrate their strengths.
• If they get through the Assessment Centre, they will be recommended to the respective Heads of Functions for a final Interview.
• They are committed to keep them informed of their progress through every step of thes election process.

Financial Statement
Balance Sheet

| Notes | 2010
£m | 2009
£m | Assets | | | | Non-current assets | | | | Intangible assets | 9 | 12,458 | 12,232 | Property, plant and equipment | 10 | 3,117 | 3,010 | Investments in associates and joint ventures | 11 | 2,666 | 2,521 | Retirement benefit assets | 12 | 122 | 105 | Deferred tax assets | 13 | 411 | 350 | Trade and other receivables | 14 | 272 | 171 | Available-for-sale investments | 15 | 29 | 26 | Derivative financial instruments | 16 | 128 | 93 | Total non-current assets | | 19,203 | 18,508 | Current assets | | | | Inventories | 17 | 3,608 | 3,261 | Income tax receivable | 18 | 73 | 97 | Trade and other receivables | 14 | 2,409 | 2,344 | Available-for-sale investments | 15 | 58 | 57 | Derivative financial instruments | 16 | 145 | 156 | Cash and cash equivalents | 19 | 2,329 | 2,161 | | | 8,622 | 8,076 | Assets classified as held-for-sale | 26 | 35 | 30 | Total current assets | | 8,657 | 8,106 | Total assets | | 27,860 | 26,614 |

| Notes | 2010
£m | 2009
£m | Equity | | | | Capital and reserves | | | | Share capital | | 506 | 506 | Share premium, capital redemption and merger reserves | | 3,910 | 3,907 | Other reserves | | 1,600 | 1,032 | Retained earnings | | 3,190 | 2,168 | Owners of the parent | | 9,206 | 7,613 | | | | | after deducting | | | | – cost of treasury shares | | (750) | (772) | | | | | Non-controlling interests | | 342 | 299 | Total equity | 20 | 9,548 | 7,912 | Liabilities | | | | Non-current liabilities | | | | Borrowings | 21 | 8,916 | 9,712 | Retirement benefit liabilities | 12 | 770 | 1,129 | Deferred tax liabilities | 13 | 509 | 527 | Other provisions for liabilities and charges | 22 | 187 | 144 | Trade and other payables | 23 | 193 | 180 | Derivative financial instruments | 16 | 92 | 94 | Total non-current liabilities | | 10,667 | 11,786 | Current liabilities | | | | Borrowings | 21 | 1,334 | 1,370 | Income tax payable | 18 | 467 | 364 | Other provisions for liabilities and charges | 22 | 282 | 312 | Trade and other payables | 23 | 5,335 | 4,727 | Derivative financial instruments | 16 | 227 | 127 | | | 7,645 | 6,900 | Liabilities directly associated with assets classified as held-for-sale | 26 | | 16 | Total current liabilities | | 7,645 | 6,916 | Total equity and liabilities | | 27,860 | 26,614 |

Cash Flow Statement:

| Notes | 2010
£m | 2009
£m | Cash flows from operating activities | | | | Cash generated from operations | 25 | 5,207 | 4,645 | Dividends received from associates | | 461 | 328 | Tax paid | | (1,178) | (1,095) | Net cash from operating activities | | 4,490 | 3,878 | Cash flows from investing activities | | | | Interest received | | 59 | 83 | Dividends received from investments | | 2 | 2 | Purchases of property, plant and equipment | | (497) | (450) | Proceeds on disposal of property, plant and equipment | | 61 | 39 | Purchases of intangibles | | (87) | (104) | Purchases and proceeds on disposals of investments | 25 | (1) | 37 | Purchase of Bentoel | 25 | | (370) | Purchase of Tekel cigarette assets | 25 | | (12) | Proceeds from ST trademark disposals | 25 | | 187 | Purchases of other subsidiaries and associates | 25 | | (1) | Proceeds on disposal of subsidiaries | 25 | 12 | | Net cash from investing activities | | (451) | (589) | Cash flows from financing activities | | | | Interest paid | | (578) | (576) | Interest element of finance lease rental payments | | (2) | (2) | Capital element of finance lease rental payments | | (17) | (35) | Proceeds from issue of shares to owners of the parent | | 3 | 2 | Proceeds from the exercise of options over own shares held in employee share ownership trusts | | 4 | 5 | Proceeds from increases in and new borrowings | 25 | 892 | 1,447 | Movements relating to derivative financial instruments | 25 | (179) | (267) | Purchases of own shares held in employee share ownership trusts | | (66) | (94) | Purchases of non-controlling interests | 25 | (12) | | Reductions in and repayments of borrowings | 25 | (1,582) | (1,853) | Dividends paid to owners of the parent | 8 | (2,093) | (1,798) | Dividends paid to non-controlling interests | | (234) | (234) | Net cash from financing activities | | (3,864) | (3,405) | Net cash flows from operating, investing and financing activities | | 175 | (116) | Differences on exchange | | 29 | (125) | Increase/(decrease) in net cash and cash equivalents in the year | | 204 | (241) | Net cash and cash equivalents at 1 January | | 1,979 | 2,220 | Net cash and cash equivalents at 31 December | 19 | 2,183 | 1,979 |

Ethical Issues
T
he Nigerian federal government filed a lawsuit against BAT and two other tobacco companies in 2007. Nigeria is seeking $42.4 billion, $34.4 billion of which the government seeks in anticipation of the future cost of treating Nigerians for tobacco-related illnesses. They are also seeking $1.04 billion as a fine for the companies' advertising and marketing campaign allegedly targeting Nigerian youth, and has asked the companies to fund an awareness campaign to educate young people about the dangers of their product. Several Nigerian state governments have filed similar petitions. In 2008 the company was the subject of a BBC2 documentary, in which Duncan Bannatyne investigated the marketing practices of the company in Africa and specifically the way the company targets younger Africans with branded music events, competitions and the sale of single cigarette sticks. Many of the practices uncovered by Bannatyne appeared to break BAT's own code of conduct and company standards. Towards the end of the programme, Bannatyne interviewed Dr Chris Proctor, Head of Science and Regulation, in which Proctor admitted that advertisements targeting children from three African countries were 'disappointing'. In many of these undeveloped countries, the awareness of health risks from smoking is very low or nonexistent.
In 2001 September, BAT invested $7.1m in North Korean state-owned enterprise called the Korea Sogyong Trading Corporation, which employs 200 people in Pyongyang to produce up to two billion cigarettes a year. The operation is run by BAT's Singapore Division. Brands of cigarettes produced are Kumgansan, Craven A and Viceroy. BAT claims that the cigarettes are produced only for consumption in North Korea, although there are allegations that the cigarettes are smuggled for sale overseas.
British American Tobacco was declared the winner of the 2008 Roger Award, the award for the worst transnational corporation operating in New Zealand.
British American Tobacco spent more than €700,000 lobbying the EU in 2008, up to four times as much as the company declared on the EU's register of interest representatives, according to a report by Corporate Europe Observatory. The report argues that BAT's hidden lobbying activities, which are clearly not in the public interest, should be exposed to public scrutiny.