.4 _L4
Our r-@ !air Er USTRICMD
L Sontrz ---sq.,
1=.Aco
I Wsustmaun: -7quarc
,--=act 13 u6tabcr 1986
Lkar Dan,
B.A.T Industries reporting add Imasco
was ;!ad of the oVportunlty of attending the Imasco presentation on Friday
corninZ. :: was unfortunate that Chri* Yuakla got tied up and could not sake It
for which 1:z sends his apologies. X die, however. have a chance to chat to half a
cozen or 6c o! the bankers acd without exceptlon ch,@y verc .12pressed, and I don't
th@nk they vcre being obsequious!
Following our meeting on Wednesday I thought it night be sensible to make a
note of the issues ra!sed as well an inform you of the various B.A.T Xadustrias
re;ort!nZ Ia:es.
Is far as B.A.T Industries statutory reporting during 19V Is concerned the
t3!: I cbriov alves the Z.A.T Industries anuounceueuc date together witb the last
Idst; ior con7uter input in order to meet these deadlines. Narrat1ves !or the
comentaries are required 2 or 3 days after the cam-,uter input date so it would be
ustful to have Inascots own published narratives in time for tbin.
Camputor B.A.T Industries
Results Input Announcement
lear to 31st December 1986 Tuesday 17 March Wednesday 25 March
-hree moutba to 31a March 1987
I Monday 4 Jay Wednesday 27 Say
SIz wouths to 30 Juse 1987 Monday 10 August Wednesday 2 September
Hine *oaths to 30 September 1937 Monday 2 November Wednesday 75 November
The C?C vill be discussing the Imance Five Tear Plan an 27 ftbruary and In
order for It to be studied In Windsor House Lt should be received by 23 February at
the latest. However all the B.A.T Industries subsidiaries and other associates
will have had their plane discussed by aid-January and at this time it will be
necessary co prepare consolidated Group forecasts. The latest possible date that
Imasco figures can be included would be 12 January. As I understand It. tho Imasco
long range plan will be completed towards the end of 1986 so it should be possible
to aosc these deadlines without difficulty.
The Inasco strategy review has been scheduled for discussion by the CPC for
Wrd=csea7 14 Yay. This is primarily a planning department requirement and I expect
Mr Deauls vi:l be discussing this vith Mr Crawford. r%j
CD
NJ
CD
%_1)
1-4
C>
BAT Industries document for Province of British Columbia 13 April 1999

-LM,ri. :UZ 2 13 ccto@@er 1966
t=rLaZ 1957 there will be three form&I Q1PZj. Thc can't below shows the
in-lustrios toard v.4&tL--g dates togacher with the 1a;t day ior input to allow
corsol!datud B.A.T Zadustriva paper to;cth4-r with a Marracive 'or laasco to be
pr.:;arz2 azd c-rculati-1.
Input Date Board ?WQctinst
1:arch 15271 QVI Friday 24 April Tuesday 5 ray
.;uo,- 19S7 QPR 7riday 17 July Tueaday 28 July
Ecptaz@:r M7 qQPR Friday 23 October Tuesday 3 November
in add!:tou there will almost certainly be occasions wt6an updates of
Induscr.'dal Croup astinar" arc required for one reason or another.
1@:peQdLag an the need for accuracy and developments within Imasco, It say be
ecessary for se to contact you. It is not. however. possible to give dates for
ttase in ad-r3acc- Bowevac we are currently reviewing our 19!7 management reporting
L:ibPt*'blw Ln the Ugbt of published quarterly information, and I will send you
e-zrther iator=tion as it becomes available.
I understand that as far as tha Z.A-T la-dustrias Sopcember 1986 QPR is
concerned, Tzaaco w'-11 bAvo a :orecast available an 24 October which will enable us
to calculate an estimate for the year to 31 Decesiber. In general, quarterly profit
brotekdowns will only be available in April after the Tmasco plan has been finallsed
or in October. For its own Board purposes Imasco prepares a-- analysis of actual
r.sults for each quarter toGether with an estimate for the next year to Nara.
Allthou_vh It is too late to use as Input for the SAT QPP. we would be grateful if a
co;j could continued to be sent to London for the record.
B.A.T lzftotries will be Including in Its results the BAT Group share of
Imascols interest in Trust Co. at the pre-tax level after writing back Imasco's,
goody-Ul anortizacloo. It is understood that this treatment will not cause
difficulties for Inasco and that Imasco vill be able co furnish us with details of
tha tax charge and Trust Co. turnover. BAT's share of turnover will be 4OZ of 98Z
of Trust C4. turnover. For background information It would be helpful if we
.received copies of Trust Co.'s annual and quarterly accounts in future as they are
published. It would Also be interesting to have their December 1985 report
together with their Xarch and June releases.
The goodwill arlslag; on the Genstar acquisition gives rise to a severe problem.
in connection with the B.A.T Industries 1996 accounts. the Inafto prospectus
included a goodwill figure of C$300 zillion an the basis of keeping the vb*lo of
censtar Vinsucial. on the basis of disposing of all Genstar 71nancial's assets
save Trust Co. this would be increased to CS1000 million before revaluation and for
published accounts purposes Inasco is amortizing this over 25 years. This 4Z per
Ann= rate is a blond insofar as part of the C$1000 million will be represented by
revalued assets that will be written off ever a much shorter period than the 40
?ears normally ado;tcd for Intangibles.
N)
CD
NJ
BAT Industries document forProvince of British C01UMbla 13 April 1999

7 row. rs :%4 13 Octob-.-r 1986
rhe za!n problem as far an S.A.T' lodustrics 1s, coucarimd is not the prof it and
lo&3 account *!!act of goodwill but the balance shert Implications. ?or B.A.T
Induitrics 196t- consolidation purposes it will be accessary !or the Group co met
o'! its share of Imaoccls :*ad-jL11 &&&!seat reservfts. The total Imasca goodwill
cot,10 br snvwhe%,e between CSIOn million or C3500 W-111an less th4r the current
-%tlmata but Imasco vill not @A-vc to firm up on a flCure for Its own published
accounts until the March year-ead. In the maantim,e you 4treed to look Into the
possible of Imsco updatiaC the Zoodwill figure In your December quarrarly
report. -Ahis would enable 3-A-7 Industries to best Its Occember year-end accounts
on recent -,uh_'ishod 7zasco information.
Save for Genstar/Trust Co. Imsecols accounting is very similar to the 03
QV0. rho only material ArIffershce-woule seen to be 'extrsordluar7 items' where
ca=da fol!ovs the UX ratber than the US.- The acquisition accounting ftr Genstar
wall bave lose of an impact attar the d!z?osals have been completed. It still ban
to be see= how far the Imasco carrying value for Trust Co. and Lucom* reporting
follovs US practice. In th:s context the SEC may be easing up in its requirments
and also chaaZe3 la Caundlan accounting for financial services are under
discussion: 'An this context ve would appreciate a copy of the report you are baving
pre;arnd or. US/Canadian GAAF differences for Trust Co. From an audit perspective
tne N audit of Trust Ca. would not ste= to cause difficulties. Also Deloittes
review the I=sco Decembir announcement and will have completed the bc,1k of the
audit work on Inascals March accounts before signing off the December
B.A.T Industries accounts.
Yours sincerely
P D Lovejoy
C)
BAT Industries document for Province of British COIUMbia 13 April 1999