British American Tobacco Malaysia Berhad : 61st Annual General Meeting minutes (348 kb)

BRITISH AMERICAN TOBACCO (MALAYSIA) BERHAD

[Registration No. 196101000326 (4372-M)]

(Incorporated in Malaysia)

Minutes of the Sixty-First (61st) Annual General Meeting of British American Tobacco (Malaysia) Berhad ("the Company" or "BAT Malaysia") held at the broadcast venue at Infinity Room, Level 16, Guoco Tower, Damansara City, No. 6, Jalan Damanlela, Bukit Damansara, 50490 Kuala Lumpur on Wednesday, 27 April 2022 at 9.30 a.m.

PRESENT
Tan Sri Dato' Seri (Dr.) Aseh bin Haji Che Mat	:	Chairman
(TSA)		Independent Non-Executive Director
Dato' Chan Choon Ngai (DCCN)	:	Senior Independent Non-Executive
		Director
Mr. Eric Ooi Lip Aun (EO)	:	Independent Non-Executive Director
Cik Norliza binti Kamaruddin (LK)	:	Independent Non-Executive Director
Datuk Christine Lee Oi Kuan (DCL)	:	Non-IndependentNon-Executive
		Director
Mr. Nedal Louay Salem (NS)	:	Managing Director
Mr. Anthony Yong Mun Seng (AY)	:	Finance Director
IN ATTENDANCE
Ms. Sharifah Thaherah	:	Company Secretary
BY INVITATION
Mr. Adrian Lee		Messrs. KPMG PLT (External Auditors)
Ms. Lee Seen Yin		Messrs. Jeff Leong, Poon & Wong
ATTENDEES

(765 Members, 49 Proxies and 1 Corporate Representative participated in the virtual meeting of the 61st Annual General Meeting as per the summary of attendance)

1. CHAIRMAN OF THE MEETING
   TSA chaired the 61st Annual General Meeting ("AGM" or "Meeting") of BAT Malaysia.
2. WELCOME ADDRESS AND HOUSE RULE
   The Company Secretary shared that the AGM was a fully virtual meeting, and the Meeting was restricted to shareholders and authorised representatives of corporate shareholders. BAT Malaysia had taken all efforts to ensure a smooth live streaming, however the quality of the broadcast for the recipients might be affected by the participants' own internet bandwidth connection and stability. Shareholders were also encouraged to submit their questions early in the query box.
3. CHAIRMAN'S OPENING SPEECH
   On behalf of the Board of Directors ("Board") and the Leadership Team of BAT Malaysia,

BRITISH AMERICAN TOBACCO (MALAYSIA) BERHAD

Minutes of the 61st Annual General Meeting held on 27 April 2022

the Chairman extended a warm welcome to the shareholders and authorised representative of corporate representatives, proxies and invitees to the AGM. The Chairman went on to express his special gratitude to all employees of BAT Malaysia for their grit, dedication and resilience in turning around the business in 2021. The Chairman also thanked the shareholders for their continued support and loyalty.

The Chairman briefed the Meeting on the following:

1. 1. BAT Malaysia held strong in the face of adversity, operated with minimal disruptions and 2021 saw BAT Malaysia's volume grew for the first time since 2002 and profit grew for the first time since 2015;
   2. Despite the trying times, BAT Malaysia remained committed to returning value to shareholders declaring dividends of 98 sen per share for the financial year ended 2021;
   3. In delivering 'A Better TomorrowTM', BAT Malaysia unveiled its sustainability strategy supported by the key pillars of Harm Reduction, Environment, Social and Governance or HESG. HESG would focus on reducing the health impact of the business, excellence in environmental management, positive social impact and robust governance across BAT Malaysia.
   4. BAT Malaysia is encouraged by the Government's announcement on the range of measures to tackle the tobacco black market in Budget 2021. The preliminary measures were effective and resulted in illegal cigarettes prevalence declining from 63.8% in 2000 to 57.7% in 2021. However, the level of tobacco black market remained too high against international standards. BAT Malaysia believes focus must now be put on further increasing enforcement, maintaining policy stability including excise duty moratorium and encouraging collaboration between industry players and the Government. Shareholders were also encouraged to be vocal and active advocates against the tobacco black market.
   5. BAT Malaysia called for establishment of appropriate regulations to be introduced to ensure nicotine vape users in Malaysia have access to vape products that are regulated and compliant to quality and safety standards.
2. QUORUM
   The requisite quorum being present pursuant to Clause 80 of BAT Malaysia's Constitution, the Chairman declared the Meeting duly convened.
3. NOTICE OF MEETING
   The Notice of the 61st AGM dated 29 March 2022 ("Notice") was announced to Bursa Malaysia Securities Berhad, published on BAT Malaysia's website, advertised in the newspapers and circulated to all members on 29 March 2022.
4. VOTING PROCEDURES
   Before proceeding with the agenda of the Meeting, the shareholders and proxies were briefed by the Chairman that pursuant to Paragraph 8.29A of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the resolutions set out in the Notice would be voted on by way of poll.

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BRITISH AMERICAN TOBACCO (MALAYSIA) BERHAD

Minutes of the 61st Annual General Meeting held on 27 April 2022

The shareholders were also informed that BAT Malaysia had appointed Tricor Investor & Issuing House Services Sdn. Bhd. as the poll administrator to conduct the e-voting process and Coopers Professional Scrutineers Sdn. Bhd. as the scrutineer to validate the votes cast.

The shareholders were informed that the voting on the resolutions could be done at any time during the Meeting until the closure of the voting session. The polling process via remote participation and voting facility for the resolutions and hotline number for support were shared.

The Chairman informed the shareholders that the Board would make every effort to answer questions received prior to and during the Meeting. For questions that were not addressed at the Meeting, the Company would provide responses by email within ten (10) working days from the date of the Meeting. Mr. Loo Ling Wah and Ms. Choo Bee Bee, both being shareholders of the Company had agreed to be the proposer and seconder for all the resolutions tabled.

7. 2021 STRATEGY AND OPERATING ENVIRONMENT

The Chairman then invited the Managing Director, NS, to share BAT Malaysia and its subsidiaries ("the Group") 2021 strategy and operating environment. NS shared the key strategy and operating environment highlights as follows:

1. The Group would be committed to drive combustible value growth, become a multi- category business in Malaysia to deliver its purpose in reducing the health impact of its business, and transform into a simpler and smarter company to maximise shareholders' value.
2. The Group welcomed the Government's transshipment ban which came into effect in January 2021. The Government's actions yielded positive results in reducing illegal cigarettes incidence by 6 percentage points ("ppt") which in turn contributed to the growth of the legal tobacco industry domestic volume by 5%. However, the tobacco black market remained at a critical stage where nearly three in five cigarettes consumed are illegal cigarettes and tobacco black market operators have been quick to switch to coastal smuggling.
3. Currently, there are 1.1 million vape users in Malaysia in 2021 which represented a rapid increase of 23% from 2020. To effectively address the tobacco black market and legalisation of nicotine vapour, it would be critical for the Government to establish regulations for nicotine vapour as a sustainable future for the industry. Otherwise, the Government would continue to lose RM5 billion in tax revenue every year due to an unregulated black market.
4. In order to further reduce the tobacco black market, it would also be crucial that the Government take the following steps:
5. • Maintain the transshipment restrictions;
   • Heighten enforcement against smuggling activities particularly coastal smuggling; and
   • Reduce the price gap between legal and cheap tobacco black market products.
6. In 2021, the Group continued on its journey to become a smarter and simpler organisation leveraged on digital transformation, supply-chain savings and streamlined ways of working. BAT Malaysia was certified as a Top Employer in Malaysia in 2021. Diversity and inclusion was a big agenda item for the business. BAT was the first tobacco company to globally achieve both National and Global Equality Standards.

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BRITISH AMERICAN TOBACCO (MALAYSIA) BERHAD

Minutes of the 61st Annual General Meeting held on 27 April 2022

1. On the sustainability highlight, BAT Malaysia was congratulated and/or awarded on the following:
2. • Johor factory operations achieved carbon neutrality certified by First Climate;
   • Gold Award at the 17th Malaysia Occupational Safety and Health Practitioners Association Awards;
   • Minority Shareholders Watch Group ("MSWG") Excellence Award for overall Corporate Governance Disclosure; and
   • MSWG Industry Excellence Award.

8. 2021 FINANCIAL PERFORMANCE

The Finance Director, AY, shared with the shareholders the Group's 2021 financial performance as follows:

1. Total Group's volume recorded an increase of 10% in 2021 as compared to the same period last year as a result of the recovery of the legal volume and reduction in tobacco black market due to Covid restrictions.
2. The Group's revenue and profit from operations recorded RM2,637 million and RM411 million respectively in 2021 mainly due to increase in the Group's domestic volume, share growth and a one-off benefit from the implementation of route-to- market. The revenue and profit from operations had increased by 14% and 19%, respectively as compared to the same period last year.
3. The Group's total share of market recorded an increase of 0.8 ppt as compared to the same period last year. Dunhill continued to strengthen its position as the leading premium brand in Malaysia and grew by 2.1 ppt as compared to the same period last year. Value-for-money portfolio grew by 1.4 ppt in share of market as compared to the same period last year.
4. The Group's operating expenses were RM264 million, an increase of 5% as compared to the same period last year as the Group invested in various strategic initiatives to support the Group's journey to "A Better TomorrowTM".

9. 2022 OUTLOOK

The 2022 outlook was highlighted as follows:

• Combustible value growth would still be the core of the Group's business;
• Step-changein new categories through driving step change in regulation for nicotine vapour and tobacco harm reduction;
• Simpler and smarter company with emphasis on business sustainability and talent acceleration.

The Group urged the Government to take necessary actions to fight the tobacco black market as it remained at a crisis point. The Group would be hopeful that there would be no tobacco excise increase in Budget 2023 as increased enforcement must be complemented with measures that address consumer affordability. The Group called on the Government to pursue a science-based approach and establish a specific regulatory framework to prevent a vapour black market.

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BRITISH AMERICAN TOBACCO (MALAYSIA) BERHAD

Minutes of the 61st Annual General Meeting held on 27 April 2022

1. AUDITED FINANCIAL STATEMENTS OF THE COMPANY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 AND THE REPORTS OF THE DIRECTORS AND AUDITORS THEREON
   The Chairman informed the shareholders that the first item on the Agenda was to receive the Audited Financial Statements of the Company for the financial year ended 31 December 2021 together with the Reports of the Directors and Auditors thereon ("2021 AFS"). The first item on the Agenda was for discussion only and did not require voting.
2. ORDINARY RESOLUTION 1
   RE-ELECTION OF DCL IN ACCORDANCE WITH CLAUSES 109.1 AND 109.2 OF THE COMPANY'S CONSTITUTION
   Ordinary Resolution 1 was in relation to the re-election of DCL as a Director of the Company in accordance with Clauses 109.1 and 109.2 of the Constitution of the Company.
3. ORDINARY RESOLUTION 2
   RE-ELECTION OF LK IN ACCORDANCE WITH CLAUSE 115 OF THE COMPANY'S CONSTITUTION
   Ordinary Resolution 2 was in relation to the re-election of LK as a Director of the Company in accordance with Clause 115 of the Constitution of the Company.
4. ORDINARY RESOLUTION 3
   RE-ELECTION OF NS IN ACCORDANCE WITH CLAUSE 115 OF THE COMPANY'S CONSTITUTION
   Ordinary Resolution 3 was in relation to the re-election of NS as a Director of the Company in accordance with Clause 115 of the Constitution of the Company.
5. ORDINARY RESOLUTION 4
   RE-ELECTION OF AY IN ACCORDANCE WITH CLAUSE 115 OF THE COMPANY'S CONSTITUTION
   Ordinary Resolution 4 was in relation to the re-election of AY as a Director of the Company in accordance with Clause 115 of the Constitution of the Company.
6. ORDINARY RESOLUTION 5
   PAYMENT OF DIRECTORS' FEES AND BENEFITS TO THE NON-EXECUTIVE DIRECTORS UP TO AN AMOUNT OF RM1,000,000.00 WITH EFFECT FROM THE 61st
   AGM OF THE COMPANY UNTIL THE NEXT ANNUAL GENERAL MEETING OF THE COMPANY
   Ordinary Resolution 5 was in relation to the approval of the payment of Directors' fees and benefits to Non-Executive Directors up to an amount of RM1,000,000.00 with effect from the 61st AGM until the next Annual General Meeting of the Company.

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