Letter from the TDR Chief Executive Officer

Moving forward with confidence

Dear customers and business partners,

our new factory in Kanfanar, which opened in May of 2007, stands as a firm guarantee that TDR will remain the largest cigarette producer and exporter in the region. Throughout the coming years and challenges, we will continue to offer our customers highest-quality products and innovative business practices. Adding to the well-known brands in our product portfolio - Ronhill, Walter Wolf, MC, Filter 160 and York, we have launched Avangard - a highly innovative new brand distinguished by a unique triple filter with minerals and containing finest tobacco. Avangard marks TDR's entry into the high-end segment of the industry.

Our exports, which account for 25 percent of the regional market, continue to grow as we successfully expand into EU countries and other world markets. The increased capacity provided by the Kanfanar factory will ensure that we sustain this regional and global growth.

In a time when smoking and consumers' right to choice figure prominently in the public debate, TDR, a socially responsible company, does business strictly in accordance with laws and regulations. I would like to turn your attention to our Principles of Doing Business, which we adopted in 2001, as well as the guidelines on recognizing illegal sales and forgeries, both available on our website.

It is a great pleasure to introduce to you our new web pages, which will allow us to communicate effectively with our customers and business partners on a daily basis.

Davor Tomašković
Chief Executive Officer