Unaudited Financial Results

For the Half Year ended 30 June 2013

Abridged Consolidated Statement Of Financial Position
As At 30 June 2013

Chairmans Statement
Introduction
The economy has shown signs of stagnation in the first half of 2013. Despite limited growth being achieved in the agricultural and mining sectors, investment in the economy has been constrained by domestic liquidity challenges and restricted availability of external credit lines. It is in this context that British American Tobacco Zimbabwe (Holdings) Limited ("the Company") presents its unaudited financial results for the six months to 30 June 2013. Industry cigarette volumes have reduced as a result of the slowdown in GDP growth and the ongoing general affordability challenges that consumers in the country continue to face. Successive increases in excise duty which impacted cigarette retail prices in 2011 and 2012 have been compounded by coinage constraints resulting in consumers often paying higher prices than recommended by manufacturers simply due to the unavailability of coins.

Financial Results
Domestic cigarette sales volumes declined by a very significant 16% compared to the same period last year for reasons as mentioned previously. The decrease in sales volumes was experienced across all our local brands though market leader Madison proved more resilient. Our Global Drive Brand, Dunhill, grew volume by 44% compared to last year albeit off a small but growing consumer base. Total revenues were $23.1 million for the first six months of the year, broadly stable when compared with the same period last year, mainly due to manufacturer increases net of excise on key brands in December 2012 which offset on part the impact of lower sales volumes. Gross profit increased by $2.5 million to $16.0 million in the period, driven by strong management focus on cost reductions. Cut rag exports to Mozambique were discontinued whilst management focused the business on building distribution of the manufactured cigarette portfolio. Credit is due to the excellent efforts of management to deliver such strong results in the half year notwithstanding the volume challenges outlined earlier, and still sustaining the top 2 brands in the country. Independent research shows BAT market share at over 75%. On a non-adjusted basis, operating profit reduced to $2.4 million primarily as a result of an IFRS 2 share-based payment expense of $10.6 million. This expense represents the fair value of share awards made to employees by our Employee Share Ownership Trust ("ESOT") as part of the Company's compliance with Indigenisation and Economic Empowerment legislation ($10.2 million) plus the associated payment of dividends to employees participating in the Trust of $0.4 million. The fair value of these awards is assessed with reference to the market value of BAT Zimbabwe's shares on the Zimbabwe Stock Exchange, which has grown significantly in the period. The impact of this expense was partly offset by other income of $3.3 million due to the forgiveness by a related party of payables for services which had been accumulated during the country's period of hyperinflation. After the deduction of finance costs and income tax, there was a net loss for the period of $1.4 million (6 months to June 2012: profit of $5.1 million). Operating cash flow for the period outperformed reported profit. Cash flows benefited from a reduction in inventories of tobacco leaf of $4.6 million following the discontinuation of cut rag exports to Mozambique. Cash outflows associated with the Employee Share Ownership Trust are weighted towards future years as the awards are cash settled upon employees retiring or leaving employment with the Company.

Unaudited Audited 30 Jun. 2013 31 Dec. 2012 US$000s US$000s ASSETS Non-current assets Property, plant and equipment 9 614 9 834 Intangible assets 176 222 Investment property 222 225 Financial assets at fair value through profit or loss 26 27 Total assets 10 038 10 308 Current assets Inventories 7 910 12 466 Trade and other receivables 6 693 7 337 Cash and cash equivalents 5 123 3 514 19 726 23 317 Total assets 29 764 33 625 EQUITY AND LIABILITIES Equity attributable to the owner of parent Share capital 5 214 5 214 Non distributable Reserve 337 337 Retained earnings 105 8 411 Total equity 5 656 13 962 Non- current Liabilities Deferred tax liablities 2 249 2 033 Current Liabilities Trade and other payables 6 343 8 900 Provisions for other liabilities and charges 11 185 1 415 Current tax liability 1 332 1 465 Borrowings 3 000 5 850 21 860 17 630 Total liabilities 24 109 19 663 Total equity and liabilities 29 764 33 625

Abridged Consolidated Statement Of Changes In Equity

For The Six Months Ended 30 June 2013
Share capital Non distributable Retained earnings Total reserves US$000s US$000s US$000s US$000s

Corporate Governance
During the period under review, Messrs. Richard Morgan and Jorge Davyt resigned as Finance Director and Non-Executive Director, respectively. The Board is indebted to Messrs. Morgan and Davyt for their contributions during their tenures as directors and wishes them the best in their future endeavors. Messrs. Peter Doona and Andre Joubert were appointed as Finance Director and Non-Executive Director respectively in terms of Article 88 of the Company's Articles of Association. These appointments will be ratified at the next Annual General Meeting.

Dividend
Due to the loss for the period, the directors have resolved not to declare an interim dividend.

Outlook
Trading conditions are expected to remain challenging in the second half of the year as the country continues to look for economic stability. We are confident that our strategies remain appropriate, that our brand portfolio is relevant and that the excellent quality of our people and processes will deliver the sustainable competitive advantage required for future success and to the benefit of shareholders.

Balance at 1 January 2012 5 214 337 2 928 8 479 Net profit attributable to shareholders - - 5 060 5 060 Dividends to equity holders - - (2 781) (2 781) Balance at 30 June 2012 5 214 337 5 207 10 758 Balance at 1 January 2013 5 214 337 8 411 13 962 Net profit attributable to shareholders - - (1 439) (1 439) Dividends to equity holders - - (6 867) (6 867) Balance at 30 June 2013 5 214 337 105 5 656

Abridged Consolidated Statement Of Cash Flows

For The Half Year Ended 30 June 2013

Unaudited Unaudited 6 months 6 months The Company remains committed to overcoming the challenges presented by 2013 towards sustainable growth, supported by a ended ended 30 Jun. 2013 30 Jun. 2012 great team and a winning organization. US$000's US$000's Cash flows from operating activities Profit before tax 2 266 6 738 Net cash before working capital changes 2 951 7 369 Kennedy Mandevhani Changes in working capital 12 415 (1 901) Chairman Interest paid (139) (278) Income tax paid (3 621) (1 161) Net cash generated from operating activities 11 605 4 029 Financial Highlights Cash flows from investing activities Purchase of property, plant and equipment (288) (267) June June Group Summary (US$000's) June June Proceeds on disposal of property, plant and equipment 9 21 2013 2012 2013 2012 Net cash utilised in investing activities (279) (246) (loss)/profit for the period (1 439) 5 060 Revenue 23 137 23 018 Total assets 29 764 31 874 Operating profit 2 405 7 016 Cashflows from financing activities Repayments of borrowings (2 850) Earnings per share (basic and diluted) (US$) (0.09) 0.29 Profit before income tax 2 266 6 738 Dividend paid to companys shareholders (6 867) (2 781) (9 717) (2 781) Abridged Consolidated Statement Of Comprehensive Income Net Increase in cash and cash equivalence 1 609 1 002 For The Six Months Ended 30 June 2013 Cash and cash equivalents at the beginning of the period 3 514 2 243 Unaudited Unaudited 30 Jun. 2013 30 Jun. 2012 Cash and cash equivalents as at end of the period 5 123 3 245 US$000's US$000's Comprising: Revenue 23 137 23 018 Cash and bank 5 123 3 245 Cost of sales (7 168) (9 589) Gross profit 15 969 13 429 Notes To The Financial Statements For The Half Year Ended 30 June 2013 Selling and marketing costs (2 166) (1 878) Administrative expenses (4 485) (4 946) 1. General information Share-based payment expense (10 606) British American Tobacco Zimbabwe (Holdings) Limited ("the Group") manufactures, distributes and sells cigarettes through a Other income - net 3 694 394 network of independent retailers and distributors. The Group has a cigarette manufacturing plant in Zimbabwe and sells cigarettes Fair value gain (1) 17 entirely in the Zimbabwe market. Operating profit 2 405 7 016 2. Accounting Policies and reporting currency Finance cost (139) (278) There has been no change in the Group's accounting policies since the date of the last audited financial statements These financial statements are presented in United States Dollars (US$), being the currency of the primary economic environment in Profit before income tax 2 266 6 738 which the Group operates. Income tax expense (3 705) (1 678) 3. Basis of preparation (Loss) / profit for the period (1 439) 5 060 The Group's Interim financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) and are based on statutory records that are maintained under the historical cost convention. Other comprehensive income - Supplementary Information Total comprehensive (loss)/income for the period (1 439) 5 060 30 Jun. 2013 30 Jun. 2012 US$000's US$000's Attributable to: 4. Depreciation charge 535 501 Owners of the parent (1 439) 5 060 Non-controlling interests - 5 Capital expenditure 288 267 6. Operating profit for the period analysed as: Total comprehensive (loss)/income for the period (1 439) 5 060 - adjusted operating profit 9 313 7 016 - Indigenous Employee Share Ownership Trust awards (10 173) Earnings per Share ($) (0.09) 0.29 - forgiveness of related party payables 3 265 Headline earnings per share ($) (0.09) 0.29 Operating profit 2 405 7 016

Conclusion

Directors: Kennedy Mandevhani* (Chairman), Lovemore T Manatsa (Managing Director), Peter Doona (Finance Director), Andre Joubert*,Angela Mashanyare*, Hope C Sadza*, Wael Sabra* (Alternate Director), (*Non Executive)