Compensation Mapping of British American Tobacco Bangladesh

Table of Content

Subject: Submission of report on compensation system of British American Tobacco Bangladesh.

This study is the outcome of t  he assignment writing program under taken by the Compensation Management course instructed by “Farhana Rashid”, Asst. professor of school of business and Economics, United International University for the ‘Summer 2012’ student to supplement the experience and research skills gather from a particular field. We are indebted to them, who have directly and indirectly assisted us in conducting the study. Specially, we are thankful to our honorable teacher be  cause she helped us to start our research paper promptly.

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First, we are thankful to the general people for showing their kind cooperation to collecting information about compensation system. We are indebted to the website that indirectly helped us in completing our assignment. We are also indebted to those people, who showed their friendly behavior to complete our questions. Finally, we owe a profound intellectual debt to our seniors for their part time help, assistance and valuable advices in thinking and developing of this assignment. Executive summery

British American Tobacco Bangladesh is one of the oldest and largest multinational companies operating in Bangladesh. The UK-based British American Tobacco Group holds 65. 91% share in the company. The Government of Bangladesh owns 28. 7% through several of its agencies, while 5. 39% is owned by other shareholder  s. British American Tobacco Bangladesh began its operations in the sub-continent in the year 1910 as Imperial Tobacco Company Ltd. Post 1947 after independence, in 1972, Bangladesh Tobacco Company (BTC) was formed with British American Tobacco holding majority of the shares.

In March 1998, Bangladesh Tobacco Company changed its corporate name into British American Tobacco Bangladesh proclaiming its common identity with other operating companies in the British American Tobacco Group. At British American Tobacco Bangladesh, the key factor to their sustainable growth is human resource. Therefor  e, they have always been committed to good employment practices and have set out the framework of our Employment Principles on providing best compensation and benefits, workplace practices, employee relations and employee human rights.

The report includes the theoretical framework of various concepts of Compensation Management in the eye of Human Resource and also contains the practices of Compensation management in British American Tobacco Bangladesh for the purpose of relating the theoretical concepts with the relevant areas of an established organization. Introduction B  ritish American Tobacco Bangladesh Company Limited (BATBCL) is one of the largest multinational companies in the country and has been operating for over 100 years. It is the part of the British American Tobacco Group, the world’s most international tobacco group with brands sold in more than 180 markets.

BATBCL has been building an international reputation for producing high quality tobacco products to meet the diverse preferences of consumers. Being listed in the London Stock Exchange, it has an active business presence in 180 markets worldwide. It holds strong market positions around  the world and has leadership in more than 50 markets. The Headquarter of BAT is situated in G  lobe House, Docklands Business District in London. BATBCL has over 1,000 employees. They take pride in being one of the preferred employers in Bangladesh. Responsibility – to our shareholders, employees, business partners, customers and any other stakeholders” – is at the core of our business and that is why they believe “success and responsibility go together”. Objectives of the study To enhance the knowledge about the Human resource activities on Compensation Management practiced in an organization and to relate them with the concepts of the texts of the course “Compensation Management”. Methodology of the study Both primary and secondary data have been collected for the purpose of the study. Primary Data: The primary data are collected by following ways:

  1. The primary data was collected by face to face interview by using a detailed questionnaire.
  2. Other informal ways. • Secondary Data: The secondary data are collected by following ways:
  3. Web Sites 2. Group Instruction Manual & Business Instruction Manual. Limitations of the study •Due to inexperience and lack of proper planning & feedback in time it was really difficult to understand what to do, how to do & when to do. •Cost and time constraints did not allow for a more extensive data collection. Omission of some important information due to response biases, confidential matters and time constraints. Company Overview British American Tobacco Bangladesh is one of the oldest and largest multinational companies operating in Bangladesh. The UK-based British American Tobacco Group holds 65. 91% share in the company. The Government of Bangladesh owns 28. 7%through several of its agencies, while 5. 39% is owned by other shareholders. They are the leading business organization in the industrial sector employing more than 1300 people directly and a further 40,000 indirectly as farmers, distributors and suppliers.

They have business contracts directly with around 21,000 registered farmers who produce high quality tobacco leaf. British American Tobacco Bangladesh began its operations in the sub-continent in the year 1910 as Imperial Tobacco Company Ltd. Post 1947; Pakistan Tobacco Company (PTC) came into existence with its head office in Karachi. During that time, PTC’s East Pakistan office was in Armanitola which was ultimately moved to Motijheel. After independence, in 1972, Bangladesh Tobacco Company (BTC) was formed with British American Tobacco holding majority of the shares.

In March 1998, Bangladesh Tobacco Company changed its corporate name into British American Tobacco Bangladesh proclaiming its common identity with other operating companies in the British American Tobacco Group. Here is some latest highlight of BATB: • Gross Turnover:

  • Tk. 7,536 crores
  • Profit (PBT) improved by 20%; 491 crores in 2011 (409 crores: 2010)
  • In 2011, the Company contributed Tk. 5,445 crores as taxes
  • Leaf exports generated US$ 39. 5 mil. in foreign currency income
  • For 2011, 50% interim dividend & recommended 370% final dividend
  • The Company contributed almost 2/3rd of total tax collections from the cigarette industry

Shareholders: It is one of the first companies listed on Dhaka and Chittagong stock exchanges. The British American Tobacco Group holds 65. 91% of the shares in British American Tobacco Bangladesh. Other shareholders are the Investment Corporation of Bangladesh, Shadharan Bima Corporation, Bangladesh Shilpa Rin Shangstha, Government of People’s Republic of Bangladesh, Sena Kalyan Shangstha and other members of the public. Contributions: British American Tobacco Bangladesh is one of the largest multinational companies in Bangladesh. Consequently, they are also the largest private sector tax payer in Bangladesh.

In 2010, they contributed Tk 46. 27 billion in the form of Supplementary Duty, Value Added Tax (VAT) and other taxes to the national exchequer. Over time, BATB have successfully established themselves as the company contributing to economic, social and human resource development. They continue to move forward to deliver higher promises. Beliefs: At British American Tobacco Bangladesh, they strive to be a responsible company wherever they operate – that may be to their shareholders, employees, business partners or any other relevant internal and external stakeholders.

Responsibility is a way of life and that is why they believe “success and responsibility go together”. At British American Tobacco Bangladesh, difference is their advantage and diversity is their strength. BATB employs more than 1,186 people directly and about 50,000 people indirectly as farmers, distributors and local suppliers. Moreov  er, around 900,000 retailers in the country sell their brands to earn their living. The take great pride in saying that they are one of the most preferred employers in the country.

Having people from a wide variety of cultures and backgrounds who support each other’s success makes us unique. It is their pool of talented people who give this place the wonderful and pleasant working en  vironment that takes them forward every day. Vision: The Vision BATB is to extend their leadership through World Class performance that motivates people and drives the business. Mission: They delight their customers with superior quality product through flexible operations. Slogan: “SUCCESS AND RESPONSIBILITY GO TOGETHER” Historical Background of BATB:

British American Tobacco Bangladesh (BATB) Company Limited, a subsidiary of British American Tobacco, is recognized leader in Bangladesh cigarette market, with a long established reputation for providing its consumers with consistently high quality brands. The journey of this company started long back. BATB was est  ablished back in1910 as Imperial Tobacco Company Ltd. with head office in Calcutta. In the very beginning Imperial Tobacco Company (ITC) launched a branch office at Moulivibazar Dhaka in 1926. Cigarettes were made in Carreras Ltd. , Calcutta, Imperial and Carreras merged into a single company in 1943.

After the partition in 1947, cigarettes were coming freely from Calcutta, but introduction of customs barriers in 1948 between India and Pakistan interrupted the smooth flow of cigarettes from Calcutta to East Pakistan. InMarch1, 1949, Pakista  n Tobacco Company (PTC) came into existence with head office in Karachi; with the assets and liabilities of ITC Limited held in Pakistan. The then East Pakistan Office was situated in Alico Building, Motijheel. In order to meet the increasing demand, the first factory in the then East Pakistan was established in Chittagong in 1952. After independence, Bangladesh Tobacco Company (Pvt. Limited was formed on 02February 1972 under the Companies Act 1913, with the assets and liabilities of PTC. Shareholding position for GOB and BAT was 1:2. BTC (Pvt. ) was converted into a public limited company on 03 September 1973. British American Tobacco played a pivotal role in BTC’s creation in 1972 and since then has been involved in BTC’s development every step of the way. To pronounce the successful relationship with British American Tobacco, BTC has changed its name and identity to British American Tobacco Bangladesh (BATB) Bangladesh Company Limited on March 1998. Structure of BATB

British American Tobacco Bangladesh has a wide range of cigarettes for different consumer segments. These include international brands such as Benson & Hedges, State Express 555, and John Player Gold Leaf. National brands such as Star, Scissors and Capstan are also part of the portfolio. BATB is a company where 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. Functional Areas: BATB has been operating its business under the following major functional areas:

• Production • Leaf • Finance • Human Resource • Brand Marketing • Trade Marketing and Distribution • Information Technology • Corporate and Regulatory Affairs • Business Development Organizational Chart

International Organizational Chart:  The parent company of BATB is called BAT Co or British American Tobacco. They are the major shareholder of BATB. The operations of BATB are done according to BAT Co regulations and BAT Co looks after the management of BATB.

BATB management is trained by BAT Co and on many occasions BAT Co sends their managers to work in BATB. Different departments have different structure according to their function and responsibility. BAT maintains a modern organizational structure headed by Managing Director. Managing Director is the operational head and national sales manager. Head of every department carries out their functions with the help of line managers. Other positions of the organ gram are directors, regional manager, secretary, assistant manager, area manager, territory officer, supervisor and other staffs.

It has seven departments with two supporting departments. The “Board of Directors” and Executive Committee (EXCO) govern the overall activities of the company. The Board of Directors is responsible for protecting the rights and interests of all shareholders and is held accountable for the overall management of the entity. The British American Tobacco Bangladesh Board consists of eight Directors, comprising the Non-Executive Chairman, five other Non-Executive Directors and three executive Directors which include the Managing Director. The key functions of the Managing Director are clearly defined.

The Board meets at least 6 times a year and makes decisions on key matters. The Board is responsible for the overall system of internal control for the company and for reviewing the effectiveness of these controls. The system is designed to manage risks that may impede the achievement of the company’s business objectives rather than to eliminate these risks. Responsibilities for implementing the company’s strategy and day to day operations are delegated to the Executive Committee, which meets monthly. The Executive Committee is chaired by the Managing Director.

The other members include the Deputy Managing Director and the functional heads of Human Resources, Corporate and Regulatory Affairs, Operations, Leaf, Brand Marketing, Trade Marketing & Distribution, Finance and Information Technology of whom three are Executive Directors. The Board Committees are namely – Audit Committee & Board Compensation Committee, each of its own terms of reference play an important role in executing the responsibility of the Board. ? Organizational Chart Of HR dept. of BAT Bangladesh :  Planning and process of recruiting of BATB 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 cannot give the accurate situation of the personnel needs. These are basically graphical methods, which cannot 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 firsthand 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 the selection process.

Organizational Behavior upon Employees in BATB Socialization Socialization is a process of adaption. Organization entry socialization refers to the adaption that takes place when an individual passes from outside the organization to the role of an inside member. Socialization can be conceptualized as a process made up of three stages: Pre-arrival stage: This stage explicitly recognizes that each individual arrives with a set of organizational values, attitude, and expectations. Encounter stage: Here the individuals confront the possible the dichotomy between their expectations and reality.

Metamorphosis stage: Finally, the new member must work out any problems discovered during the encounter stage. The organization gets higher productivity, greater employee commitment, and lower turnover rates through socialization. Employees achieved reduced anxiety, increased awareness of what is expected on the job, and an increased feeling of being accepted by their peers and bosses. When socialization works, employees receive the confidence and satisfaction what comes from feeling that they are members in good standing in the organization. Training and Development of BATB

Training is a learning experience in that it seeks a relatively permanent change in an individual that will improve his or her ability to perform on the job. To make training a success, a trainer should take care of the following points: ? Make learning meaningful. ? Make skills transfer easy and ? Motivate the learner The employee training method can be in two ways and they are – i. On the job training ii. Off the job training On-the-job Training: It means having a person learn a job by actually doing it. Its advantages are: • Relatively inexpensive • Trainees learn while producing No need off-site facilities Its Drawbacks are: • Low productivity while the employees develop their skills. • The errors made by the trainees while they learn. ? Apprenticeship Training: It traditionally involves having the learner study under the tutelage of a master craftsperson. ? Informal Learning: This learning process is not determined or designed by the organization. But the organization may ensure it by creating a learning environment in the organization. ? Job Instruction Training: This is listing each jobs basic task, along with key points, in order to provide step-by-step training for employees. Lectures: Lecture is the most simple and quick way to provide knowledge to large groups of trainees. ? Simulated Training: It places the trainee in an artificial environment that closely mirrors actual working conditions. Off-the-job Training: It includes- ? The Case Study Method: Here the manager is presented with a written description of an organizational problem to solve in a discussion with other trainees. ? Management Game: The manager presented with a computerized decisions regarding but simulated situations. ? Outside Seminars:

Many organizations now are using this popular method on various aspects of business and management. ? Behavior Modeling: It involves the Modeling-Role playing-Social reinforcement-Transfer of training. Development: Any attempt to improve current or future management performance by imparting knowledge, changing attitudes, or increasing skills. Any effort toward developing employees must begin by looking at the organizations objectives. The objectives tell us where were going and provide a framework from which our managerial needs can be determined.

Employee Development Method Managerial On-the-Job Training: The development of employee’s abilities can take place on the job. It includes: ? Job Rotation: It involves moving a trainee from department to department to broaden their understanding of all parts of the business and test their abilities. ? Coaching Approach: The trainee works directly with a senior manager or with the person they are to replace. ? Action learning: Here the management trainees are allowed to work full-time analyzing and solving problems in other departments. Performance Appraisal

Performance Appraisal is Evaluating an employee’s current and/or past performance relative to their performance standards. Importance: • It does little good to translate the employer’s strategic goals into specific employees’ goals • It develop a plan for correcting any deficiencies he appraisal might have unearthed • It should serve a useful career planning exhibit strengths and weaknesses. • It almost always affects the employer’s salary raise and promotional decisions. Methods of Appraising Performance Graphic Rating Scale Method: A scale that lists a number of traits and a range of performance for each.

The employee is then rated by identifying the score that best describes his or her level of performance for each trait. Alternation Ranking Method of BATB Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked. ? Paired Comparison Method: The performance of each employee is compared to the performance of other employees. It is a matter of combination. ? Forced Distribution Method: Similar to grading on a curve, predetermined percentages of rates are placed in various categories. ? Critical Incident Method:

Keeping a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing it with the employees as predetermined times. ? Narrative Forms: It is an essay type method. Employee Compensation System of BATB Employee compensation refers to all forms of pay or rewards going to employees and arising from their employment. It has two main components: 1. Direct financial payments: Wages, salaries, incentives, commissions, and bonuses. There are two ways to pay directly: • Time based pay: Daily, hourly, weekly, biweekly or monthly wages and salaries. Performance based pay: Ties compensation directly to the amount of product the worker generates. 2. Direct payments: Financial benefits like employer-paid insurance and vacations. Factors that influence the design of compensation plan ? Legal considerations in compensation ? Union influences on compensation decisions ? Corporate policies and competitive strategy ? Policy issues affecting the plan of an organization Establishing Pay Rates Step-1 The Salary Survey: A survey aimed at determining prevailing wage rates. A good salary survey provides specific wage rates for specific jobs.

Formal written questionnaire surveys are the most comprehensive, but telephone surveys and newspaper ads are also sources of information. Step-2 Job Evaluation: A systematic comparison done in order to determine the worth of one job relative to another. Job Evaluation method includes: 1. Ranking: It involves ranking each job relative to all other jobs, usually based on overall difficulty. There are several steps in this method: •Obtain job information for each job •Rank jobs by department or in clusters •Select just one compensable factor •Rank jobs •Combine ratings 2. Job Classification:

Categorize jobs into groups 3. Point Method: A number of compensable factors are identified and then the degree to which each of these factors is present on the job is determined. 4. Factor comparison: They Rank jobs according to a variety of skill and difficulty factors, and then adding up these rankings to arrive at an overall numerical rating for each given job. Step-3 Group Similar Jobs into Pay Grades: A pay grade is comprised of jobs of approximately equal difficulty. Step-4 Price each Pay Grade-Wage Curves: This curve shows the relationship between the value of the job and the average wage paid for this job.

Step-5 Fine-Tune Pay Rates: A series of steps or levels within as pay grade usually based upon years of service. Benefits Indirect financial and non financial payments employees receive for continuing their employment with the company. There are several types of benefits: • Supplemental Pay Benefits • Insurance Benefits • Vacations and Holidays • Sick Leave • Parental Leave and Family Leave • Medical Leave • Retirement Benefits Benefits and Other Facilities for the Managerial Level of Employees that are currently followed by BATB: BATB strongly follow equal employment policy.

They use all kind of incentives such as Individual incentives, Small group/team incentives, Organization specified goal bonus, Discretionary bonus, Profit sharing, Spot awards, Key contributor plan. The increase of salary depends on General facts, cost of living and Merit also. Probationary period for new employee is 180 days. After probationary period an employee is eligible to get insurance benefits. Disability insurance or leave considered on negotiation. They do not have any pension benefit after the year of 2007. But they provide Gratuity and provident fund to them.

Provident fund is based on 10% of basic pay of employee. They also have some scheme named “Voluntary Separation Scheme” and “Your Enterprising Scheme”. They can take loan from the company with 7% interest for personal basis. The coverage for accidental death is double than the normal death. They have fixed amount (3lakh taka) of medical insurance for each managerial employee. They provide Maternity leave for 180 days and paternal leave for 7days. They consider 18 days as paid leave. They follow job grades and management level Job grade starts with 34th grade.

They give Management training –Local or Oversees. Salary depends on market grade, (ex: if job grade is 35 in market, salary will be same as well). They prefer job evaluation in terms of need. They follow sample based survey for Finance purpose where they make the lowest/ highest salary percentage. They follow yearly performance rating and salary depends on this rating which base on 3 things: 1. Outstanding 2. Moderate 3. Dissatisfactory If an employee’s performance is in dissatisfactory level they don’t prefer to cut his/her salary rather to constant that, or may take some other actions.

CPI increases ? of the year, arrange Board CPI meeting in every 6 months or a year where they propose all the changes if needed. They have contracted with specialize research agency who design their salaries, infrastructure etc. Executive Directors’ Compensation and benefits internationally: The Executive Directors (with the exception of Antonio Monteiro de Castro up to 31 December 2007 and Nicandro Durante from 1 January 2008) are, like other employees, eligible for membership of the British American Tobacco UK Pension Fund (Pension Fund).

The Pension Fund, for members who joined before 1 April 2005, is a non-contributory defined benefit scheme and includes provision for spouses’ benefits on death in service or after retirement. In the event of death in service, a spouse’s pension equal to half of the member’s prospective pension at normal retirement age would be payable. A spouse’s pension payable in the event of death after retirement is equal to half of the member’s full pension, irrespective of any decision to exchange part of the benefit for a lump sum.

The early retirement rules in the Pension Fund permit a member to draw the accrued retirement pension within five years of normal retirement age without actuarial reduction, subject to the employing company’s agreement. Alternatively, an Executive Director may choose to retire at any time on or after his or her 50th birthday without the employing company’s agreement, subject to a reduction as determined by the Pension Fund trustee in conjunction with the Pension Fund actuary. Accrual rates differ according to individual circumstances but do not exceed one-fortieth of pensionable salary for each year of pensionable service.

Pensionable pay covers basic salary only and therefore bonus awards and the value of benefits in kind are not pensionable. Paul Adams and Paul Rayner both joined the Pension Fund after 1989. As a result, prior to 6 April 2006, both individuals were subject to the HM Revenue & Customs cap on pensionable earnings (notionally ? 112,800 for the tax year 2007/08). In addition, each has an unfunded pension promise from the Company in respect of earnings above the cap on an equivalent basis to the benefits provided by the Pension Fund.

This is provided through membership of an unfunded unapproved retirement benefit scheme. However, following the changes in pension’s legislation in 2006, it was agreed that benefits up to ? 75,000 per annum (targeting the Lifetime Allowance) would be provided through the Pension Fund with the remainder of benefits being provided through the unfunded arrangement. As a result, the Company paid an additional amount to the Pension Fund in 2006 to fund the additional benefits up to a maximum of ? 75,000 per annum. The overall pension entitlement for each of the Executive Directors remained unchanged.

Paul Adams and Paul Rayner, being members of the Pension Fund, are entitled to receive increases in their pensions in line with price inflation up to 6 per cent per annum. These unfunded commitments are included in the provisions referred to in note 12 to the accounts. Paul Rayner has an accumulated defined contribution entitlement from Division A of the British American Tobacco Australia Superannuation Fund. No contributions were paid to this arrangement on behalf of Paul Rayner during 2007. Antonio Monteiro de Castro retired as an Executive Director on 31 December 2007.

Details of his pension entitlements are set out in note 5 to Table 4. Nicandro Durante, who was appointed an Executive Director with effect from 1 January 2008, is a member of the Fundacao Albino Souza Cruz in Brazil. This is a non-contributory defined benefit scheme and includes a spouse’s death in service benefit equal to 37. 5 per cent of the member’s prospective pension at normal retirement age. Accrual rates do not exceed 1. 85 per cent of basic salary (excluding bonus) averaged over the last 12 months to normal retirement age, for each year of pensionable service.

Nicandro Durante’s pension will be reviewed by the Company annually with reference to the salary of that of a General Manager of Souza Cruz SA which will increase annually in line with local practice. In addition, Nicandro Durante accrues a pension of 0. 65 per cent for each year of service based on his 12-month average UK basic salary (excluding bonus) with effect from 1 March 2006, that being the date of his appointment as a member of the Management Board. This benefit is provided through the unfunded unapproved retirement benefit scheme. Executive Directors’ service contracts

The Remuneration Committee continues to operate a policy of one year rolling contracts for Executive Directors. Each Executive Director has such a contract, executed at the time of his original appointment. The contract may be re-executed during the term of his employment to take account of variations in terms and conditions as well as changes in best practice; the contractual term will continue to be of a one year rolling period. Most recently, in February 2007, the service contracts for each of Paul Adams, Paul Rayner and Antonio Monteiro de Castro, were revised to principally take account of the new age discrimination legislation.

In addition, the Remuneration Committee maintains discretion in respect of this policy for those future Executive Directors who may be recruited externally or from overseas, when it may be appropriate to offer a contract with an initial period of longer than one year, reducing to a one year rolling contract after the expiry of the initial period. It is the policy that an Executive Director’s one year rolling contract incorporates a provision for a termination or compensation payment in lieu of notice. An Executive Director’s compensation payment, in lieu of notice, would comprise: 1. 2 months’ salary at his then current base pay 2. Cash payment in respect of other benefits under the contract such as medical insurance, or the Company may at its option continue those benefits for a 12 month period. The Committee maintains discretion as to how to deal with any grants or awards made prior to termination under the Share Option Scheme (if appropriate), the Deferred Scheme and the long term incentive plans. Pension entitlements are dealt with in accordance with the terms and conditions of the applicable pension scheme and do not form part of the contractual compensation payment.

The compensation payment is payable where the requisite 12 months’ notice is not given to the Executive Director or when he terminates by giving 12 months’ notice and the Company does not wish him to serve his notice. If a period of notice is served, the compensation payment is reduced pro rata. In the unlikely event, the contract is terminated for cause (such as gross misconduct), the Company may terminate the contract with immediate effect and therefore no compensation payment would be payable.

Nicandro Durante, who was appointed Chief Operating Officer with effect from 1 January 2008, has a service contract with the Company in the form outlined above. In addition, as a result of the application of local labour laws in Brazil, Nicandro Durante retains certain termination or compensation rights in respect of his former employment with Souza Cruz SA. In the event of any compensation being payable to Nicandro Durante pursuant to his service contract with the Company, these Souza Cruz rights will be taken into account first in arriving at a final compensation amount. Proposed Plan for BATB

Though BATB is one the most renowned Organization in Bangladesh, it also has some limitations that can be solved or it can be improve by changing some policies or rules. We do not have that much ability to suggest them but as far we have learned though the course, and have analyze the condition of BATB, and also make some interview with some managerial employee as well as factory employees, we point out some needs and things that can be improved such as: ? BATB is rigid with their policies. They should be flexible and should adjust with the situation considering the budget and circumstances. After 2007, they have stopped proving “Pension” which is pretty attractive to employees. They can reconstruct the policy. ? They have 18 days paid leave which they must have to take. Otherwise it will be disable. They cannot sale it to company or cannot enjoy those days later on. But it should not be so rigid. It should make flexible to employee that they can enjoy those paid leave whenever they want or whenever they need. Or they can sale it to company and convert those “leave” days into cash. ? Their medical insurance range is fixed. They do not provide more than 3lakh taka as medical insurance.

They should flexible the range of insurance on the basis of the situation of the patient. ? They can provide residential benefit to their employees. ? They also can provide transportation facilities to them. ? They have good relation with their registered farmer. But they should provide some more benefit to them and give them their reorganization as they are working for BATB though they are out of the organizational structure. ? They do not have such separate disability insurance category. It still depends on negotiations. But it should be separated and fixed.

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