RESTRICTED
BRITISH-AMERICAN TOBACCO COMPANY LIMITED
MANAGEMENT BOARD MEETING
5 th November 1992
Present: Mr B D Bramley (chairman)
Mr P N Adams
Mr N Davis
Mr K S Dunt
Mr R S Hartley
Mr R H Pilbeam
Mr J Rembiszewski
Mr D S Watterton
In attendance: Mr P L Clarke (Secretary)
Also attended: Mr J Bottome Item BH.76
Mrs S Osborne Item SH.77
Mr M Magnacca Item BH.77
Mr G Read Item BH.78
Mr D Stimson Item BH.79
Aucloaies: Apolocies for absence were received
frzm Mr 11 G Broc'-'sS.
PPE'.~icus MI~Tu--_s
The minutes cf t1le meer-ina held on 2!sz
Septem'--ar- 19S:
were aareed.
MATTERS AR1S7.1;G
Mr Filbeam reported on the proposed revised
arrangements
for handling the Ccr-.pany's exposure to exchange
rate
fluctuations. At the end of November, a fixed
E,Z:_z'3
exchange rate would be agreed with BAT Industries
and
al'! ^- inflows to the Company would be sold to
BAT
Industries Finance at the agreed exchange rate,
where
they would be managed centrally. The position
w_~zh
regard to non-US$ currencies was under review. It
was
agreed that Mr Pilbeam would circulate a paper to
the
Board describing the revised arrangements in
detail
prior to agreement with BAT Industries.
BH.74 BATCO PERFORMANCE OBJECTIVES fREVIEW)
The Board reviewed the latest estimate of BATCo's
year
end performance against sales and other financial
objectives.
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B11.75 PRODUCT LIABILITY
Mr Clarke reported that the plaintiffs' lawyers
responsible for most of the tobacco litigation
pending
in New Jersey USA, including the Cipollone case,
had
announced their intention to withdraw from these
cases.
It was expected that the Court would order the
Cipollone
case to be dismissed later that week. In certain
of
the other cases, the plaintiffs wished to continue
the
actions and they would be seeking replacement
Counsel.
It was hoped that the dismissal of the Cipollone
case
would result in some favourable publicity for the
industry.
Bh.76 MANAGEMENT SERVICES DEPARTMENT REVIEW
Mr J Bottome gave the Board a presentation on the
1993
plans for MSD which now combined the BATCo and
BATUKE
departments. Mr Bottome outlined the overall
strategic
framework for MSD and the expected demands on the
department in 1993, and explained the need to set
oriorities. After discussion, it was felt that
there
shculd be a seoarate meeting of Directors to
review and
a,gree the various priority areas.
7
":TERNATIONAL E3PJV1DS
M-
. -= S Osborne and Mr M Mac;nacca gave a
presentation to
tne Board of proposals for State Express ~-45 to
sponscr
t"ne Subaru International Rally Works Tea:-, in
the 199"!
o
d
r and Asian-Pacil~ic Rallies Championship
prograr=,e.
7 n discussion, it was noted that the revenue cost
of the
Szonsarship would be approximately E:5.9mn, but
that this
-would achieve an estimated E15.3mn in television
airtime
benel:it and other unquantified media benefits.
The
e%penditure was approved subject to the Preview
t)rofitab; lit~w for 1993 beina achieved an-d a
review of
~hq brand's -advertisina spen(~.
E 1z. -.7 3 R&D UPDATE AND BUDGET
Mr Read explained that the integration of the
Fundamental Research Centre (11FRC11) and the
BATCo
Technology Centre (11BTC11) and the re-focusing of
effort
towards market needs had resulted in a significant
change in the R&D organisation structure, a re-
distribution of resources and a proliferation of
short-
term market-focused projects. Mr Read described
each
of the key work areas and presented the R&D budget
forecast for 1993. In discussion, it was felt that
the
number of projects currently in progress should be
Ul
reduced and greater emphasis given to a smaller
number C)
of key projects. It was noted that the work
programme -
was largely generated from the Product Development
Ur
Committee and it was agreed that the minutes of
the C110
meetings of this Committee should in future be Qf4
BATCo document for Province of BritiSh Columbia 28
October 1999


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circulated to all Directors. It was also felt that
there was a need to review the depth of experience
in
the R&D Department and PP&D in relation to primary
manufacturing and GLT technology. Messrs Bramley,
Davis and Rembiszewski would discuss how the
control
over these demands on R&D could be improved.
BH.79 PRODUCTION PLANNING & DEVELOPMENT BUDGET
The Board noted the 1993 budget for PP&D and
requested
that the detailed review of progress on major
projects
should be deferred to a future meeting.
BH.80 PROJECT TALISMAN
The Chairman outlined the principal terms of a
proposed
deal for the exchange of certain brands in Europe
which
was in an advanced stage of negotiation. It was
noted
that the total consideration expected from the
deal was
in the region of E150mn but that made no allowance
for
various costs which BATCo would have to incur
prior to
completion. In view of the magnitude of the
project,
it was aareed that once final agreement had been
reacne4- a full-time project manager should be
appointed
to B*!.TCo to supervise the imulementation of the
2.q.81
A repcrt _'cr Taiwan was ncted.
BFI. 8 2
it was agreed that M.- Bacon's presentation on the
EATCo
imaae, and the regufar reviews of Production
and Leaf would be deferred to a future meeting.
BH.83 DATE OF NEX-1 MEETING
Thurs.J.ay, 10th Decemter 1992 at 9.00am.
Lri
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BATCo document for Province of BritiSh Columbia 28
October 1999