Guidelines for JUIM -.Iulv 1993
General Priorities
I It is sugVested that the primary objective for Imasco should be to provide shareholders
0
with an above-averaze recum on their investment in the CorriDany throueb dividends and
capital appreciation measured in terms of the movement of the share price reinive co the
TSE 300 Index.
In Une with the Group's overall development. B.A.T Industries would preffer, Imasco to
achieve these objectives through a strategy based mainly an mainminini, Imperial
Tobacco in a leadership, . 7 . . market and on
. position in its developing the Company's
Financial Services activides
In evaluating Imasco's stratecri s and plans. B.A.T Industries will apply cricena similar
to those ap
plied to the other businesses within the Grotrp. In particular. it is expected
that them will be an aim for each business within Lmasc either to be a leader or' to be
seekinz ro achieve leadership in markets where it is possible to earn rates of rcrurn which
will gg=erate sufficient cash both to pay a dividend and either support scif-funced growth
at above-ave=p rates or provide surplus cash for investment elsewhere.
Financial Guidelines
Profits should f-m-w at the following average rams over the rive years 199-'1998. in
eac_- =se measured from, a 1992 base:-
'V D-2,
Earnings from Operations
Financial ser-rices 15 (i)
Tobacco 6 (6)
Other 14 (9)
Earriings from Opemtions (@jll consolidation) I 1 (6)
Pnrnings Before Tax 15 (9)
Earnines for Common Shares 14 (10)
Fmoures in brackets relate to the eight year growth ram from a 1989 base.
5- Imasco should adhere to a tarre, for operating cash flow each year to show a substantial
surplus after payment of taxes and dividends: this target should be expressed as a
perc:nmee of the cos, of zommon dividends. M.)
6. Imasco should aim to pay common dividends equivalent to 2E least 4075 of current year N.)
earrungs per share: and for (he rate of increase to accelerate as earnings recover. The
MULLMUM percentage distribution should be reviewed with a view to increasine it when -10
there are mai.or asset disposals.
BAT Industries document for Province of British Columbia 13 April 1999

2 -
Imasco should continue to give priority to suengthening its balance sheet. reducing the
level of borrowings through generaticin of cash surpluses after payment of = dividends
and disposal of Hardees as soon as practicable.
S. Imasco should aim to provide shareholders with a 'superior total remm" measured by
dividends plus the increase in the company's common share price. 'Superior' is to be
measured over three. five and ten vearS by refer=ce to the TSE300. other pcer group,
ecuides. Canadian Treasur., bills and a synthetic index composed of the consumer
produczs index (6017a) and the bank Mex (40%).
Specific Priorities
9 Imperial Tob2CCO : There should be x-nEinuing strong pressure to obtain amendments or
recisions of Elie Tobacco Products Control Act and opposition to any further increases in
the !e-.,ei of mxadon on cievarertes.
10 -.c sz:=remes tor counteracting stic
7her: s@ould also be spec"I k sales bv comcedtors and
the orevzlencc of =nsit Lmde.
Tbe pian should review ImperWi's manufacruning srmte2y in the light of the dkely
introduction of NAF-1A on I st January 1994.
1:. Tbe plan should also review Inivertal's emort suu=v and discuss anv ch=--es to the
cos: structure of the business and development of brands ttmt would be necessary to
make a success of the stratra-i.
12. CT Financial : The pian should set out how the level of profimbiliry and payment of
dividends from CT Finzrzc@ai will be imoroved.
na
Canada Trust should lobbv for the Deregulation of the Ca, than financial services
market. varticulariv :oncemine he rules that banks and trust comoanies aia,., not scil the
insurance products or sister companies.
15 Them should be a defined plan to optimise the method and timing for the reduction in
the shareholding in Cartada Trust. resulted under the Financial Services legisiadon. An
agreement needs to be reached bcrwc= Imasco and B.A.T Industfies on how the
proceeds from the sale of 35 FS of CT Financial will be utiffsed.
16 Hardee's : Plans should be progressed for the divest:menc of Hardee's. and an agreement
needs to be reached on how the proceeds from the sale of Hardee's will be utilised.
17. Shoppers Drug : The plans for the drugstore business should include specific
programmes For productivity improvements through the introduction of improved
Ther
svstc-ns. should also be plans o =ct to restrictions an Elie sale of Tobacco PO
products. In keqing with B.A.T's wish to concentrate development on Tobacco and
Fiiizric4al Services. possible divestment of Shoppers Drug should be considered.
IS. VCS : 7he future of UCS as a separate business or as part of Imperial Tobacco should
be determined. C)
HC&fmi. 30 June. 1993
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BAT Industries document for Province of British Columbia 13 April 1999