SO1

Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.

Our EHS policy requires our companies to implement safe systems of work and cleaner technologies to minimize or eliminate risks to employees, communities and the physical environment. Our companies are required to characterise environmental releases and control or remedy them in accordance with regulations and justifiable public complaints. The policy now also requires all our companies to carry out a biodiversity risk assessment to identify biodiversity impacts within the sphere of influence of company-owned or leased tracts of land and, if impacts are identified, to develop appropriate plans to continuously reduce them, to support preservation and to share these plans with key stakeholders. Our Social Responsibility in Tobacco Production programme covers all leaf suppliers to the Group and includes good agricultural practice, EHS standards, eliminating child labour and aiming to ensure that farmers' standards of living are maintained or increased. Our Corporate Social Investment Framework encourages our companies to focus community support in alignment with three global themes: Sustainable Agriculture; Civic Life; and Empowerment. Our approach to embedding CSR principles includes dialogue with stakeholders, including the communities in which we operate.

All factory closures and redundancies are undertaken locally and differences in local law and precedent mean we do not have a standard approach to redundancy across all our regions.

However, when implementing a closure or downsizing, our companies are also encouraged to make a social impact assessment and to consider ways of mitigating the effect on the local community.

Our Employment Principles make clear that we are committed to restructuring, where necessary, in a responsible manner. Any of our companies involved in restructuring will inform and consult on the initiatives that make change necessary to its employees and all appropriate groups and bodies, in accordance with local laws and regulations. We 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, our companies adopt responsible local approaches and procedures to address each instance, including severance pay and any other measures as may be appropriate to the situation and location, including extensive outplacement support.

 SO2

Percentage and total number of business units analyzed for risks related to corruption.

It is a fundamental Group policy, set out in our Standards of Business Conduct, that all our companies and all employees observe and comply with the laws and regulations applicable to the Group's business in each country in which they operate and that they act with high standards of business integrity. The Standards include specific provisions on bribery and corruption which prohibit the giving or taking of bribes to or from any person and any other activity which contravenes any applicable anti-corruption measures, including those prohibiting corrupt practices abroad. Employees are encouraged not to give or receive gifts in the course of business, but may do so where they are appropriate to the conduct of such business and are of a token or modest amount. They must be properly recorded in the books of the company in question. Similarly, the frequency and amount of business entertainment offered or accepted must be modest and must not exceed reasonable business practice. We are confident that our policy meets the standards of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Our Standards of Business Conduct apply to all Group companies and all employees and each company is required formally to adopt them or local policies embodying them.

Each general manager and head of function must sign a letter annually confirming compliance of their business unit, thus the entire organisation is covered. Continuous information on performance in accordance with the Standards through the year is gathered at a global level and reported quarterly to the Audit Committee.

 SO3

Percentage of employees trained in organisation's anti-corruption policies and procedures.

We do not currently record this information on a global or an EU level. However, as part of our training programme on the Standards of Business Conduct, heads of function at our UK Head Office were asked to attend briefing sessions on the Standards. All heads of function were provided with the training materials for cascade to their teams. Regional general counsel are now arranging briefing sessions for the regional top teams. Internationally, training on the Standards of Business Conduct continues to be delivered in a number of our companies, using materials developed centrally.

 SO4

Actions taken in response to incidents of corruption.

All suspected or alleged corruption within the Group is investigated internally and, where appropriate, the relevant authorities are notified. Any breach of our Standards of Business Conduct is a matter for disciplinary action. While the precise action taken in each case will depend upon the specific circumstances, employees involved in corrupt activity will, in most cases, be dismissed or will otherwise leave the company. Where a criminal offence has been committed, there is a presumption in favour of prosecution, although subject to the particular circumstances of the case. In every case, the relevant internal controls will be reviewed and, where appropriate, tightened and/or improved.

Although not solely relating to corruption, in the year to 31 December 2006, 22 instances of suspected breaches of the Standards of Business Conduct were reported to the Audit Committee, including 17 brought to attention through "whistle-blowing" reports from employees and ex-employees.

Seven were established as breaches and appropriate action was taken. In 11 cases, investigation found no wrongdoing. In four, investigations continued at the year end. No instances involved sums or matters considered material to the Group.

 SO5

Public policy positions and participation in public policy development and lobbying.

British American Tobacco supports the regulation of tobacco products, particularly given the health risks associated with consumption. In 2006, an extensive regulation programme was undertaken to encourage proactive engagement with regulators. As part of the programme, global positions were developed on many regulatory topics. These are being rolled out to our companies during 2007 and cover a range of tobacco-related issues from product, trade, manufacturing and marketing. Regulatory engagement by our companies is monitored by our regional CSR committees. We also have a clear policy and compliance procedures on political donations, set out in our Group-wide Standards of Business Conduct.

 SO6

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.

There were no financial and in-kind contributions to political parties for the EU. We do not monitor the value of gifts to individuals or politically-related institutions globally or on an EU level.

 SO7

Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes.

Italy
In March 2003, the Italian Competition Authority, after an investigation into cigarette prices, imposed a fine of approx £14 million on Ente Tabacchi Italiani (ETI), formerly the Italian state-owned tobacco company. British American Tobacco purchased ETI in December 2003. In April 2006, the Consiglio di Stato in Rome upheld the fine and referred to the European Court of Justice the question of whether the fine should be borne by the Italian State or ETI.

Greece
British American Tobacco Hellas S.A. (BAT Hellas), our company in Greece, together with other members of the local industry, is under investigation by the Hellenic Competition Authorities. It is believed that the investigation was prompted by a complaint from wholesalers following a request that they issue bank guarantees to secure credit exposure. BAT Hellas has provided full answers to the questions raised by the Competition Authorities to date and awaits their response.

 SO8

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

In May 2006, the French Supreme Court upheld a complaint by the Comité National Contre le Tabagisme (CNCT) that illustrations included on cigarette packs were advertisements prohibited under French law. The Group companies owning the relevant brands were required to pay fines of approx £20000 each and damages of approx £27000 to CNCT.

For more information on our approach to all these issues see www.bat.com/operatingresponsibly

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