Tobacco Documents Online

PLEASE DESTROY BY 2~rH OCTOBER, 1996 BRITISH-AMERICAN TOBACCO (HOLDINGS) LIMITED EXTRACTS FROM MINUTES OF MANAGEMENT BOARD MEETING H~Id on 6th SeBtember. 1996 BOARD PROCEDURES The meeting approved revised procedures for conduct of board meeting business. It was agreed that at least two directors must always be available or contactable during normal office hours at Staines or within easy reach of Staines for urgent or emergency action. A new IT database will be designed to track directors' movements for this purpose. PERFORMANCE REPORTING Mr. Herter clarified that the monthly Performance Report should contain information on shipment shares by market wherever such information is reliable. Where such information is not available or is unreliable consumer off-take shares should be included. STANDIN(~ ~QMMITI'EE Mr. Clarke reported on the business conducted by the S~anding Committee of the Board since the previous Board meeting. QpERATING PERFORMANCE Each of the Regional Directors reported on current performance in each of their regions and the sensitivities to achieving the year-end forecasts. In discussion, the following action points were agree, d:- . The Marketing Director will discuss with the US marketing team the impetus which is being given to the development of the Group's strategic brands in the domestic market particularly KOOL and GPC. • Whenever it is planned to change a distributor Regional Counsel should be consulted on the termination plans. • Caution needs to be exercised when terminating distribution arrangements with distributors who cover territories in more than one region. • The forecast performance for the third quarter and year-end needs to be improved and each director needs to examine his forecast costs critically for the remainder of the year (and their timing) to establish what further savings can be made. -1- BD10093

The Finance Director will report back to the next meeting of the Board what savings have been achieved. Controls on litigation expenditure needs to be reviewed ~o that the Board can be assured that such expenditure is being managed in the most cost-effective manner. MARKETING COMMITTEE The meeting noted the minutes of the first meeting of the Marketing Committee which took place on 5th September. US LITIGATION Mr. Withington gave the Board a presentation on the current status of the smoking and health litigation in the USA. It was noted that the judgement in the recent Carter ease would be appealed as the jury had been allowed to consider inadmissible evidence. In discussion the Board emphasised the importance of handling the public relations aspects of the litigation constructively and sensitively. It is important that lessons learnt in the USA in relation to the media coverage should be made available to operating companies in other markets. OCCUPATIONAL HEALTH & SAFETY Dr. Oltermann reported on safety performance and accident statistics in 1995 and the trends in the first half of 1996. Dr. Oltermann presented proposed revised reporting procedures which were agreed in principle subject to ascertaining BAT Industries' continuing requirements on the reporting of serious accidents. ENVIRONMENTAL MANAGEMENT Mr. Luke presented the annual report on environmental management in operating companies. The meeting noted the overall self-sufficiency of wood fuel usage and approved certain revisions to the afforestation policy. Mr. Luke explained the effect of the EU Directive on Packaging and Packaging Waste and in discussion it was noted that a study should be conducted on whether the company could revert to the use of cellophane packing in place of polypropylene which is non hie-degradable. The Board requested that a review be carried out of the financial consequences on future plant requirements as the requirements of the Directive are implemented. In discussion, it was agreed that operating companies should be entitled to participate in the Environmental Standards System lSOl~1001. INTI~G,RATED ENVIRONMENTAL HEALTH & SAFETY MANAGEMENT SYSTEMS The meeting agreed to proposals for simplifying organisational arrangements in Operations to introduce a system approach to health and safety matters including "road mapping" and to improve the safety culture. It was noted that the proposals should not result in any overall increase in manpower. -2- BD 10093

PRODUCT OUALITY Dr. Kausch gave the meedng a presentation on the quality improvement programme which he and his team are developing for the group's products and services. In discussion, the Board agreed to the proposed quality concept for the Group and noted that a pilot quality evaluation scheme will be tdaled in Chile. ACOUISITIONS AND BUSINESS DEVELOPMENT The Board noted the Monthly update. The Board noted the l.~gal Report for August 1996. GLOBAL TOBACCO STRATEGY Mr. Dunt reported that a strategy development committee of the Board was meeting to progress the development of the global tobacco strategy plan and a timetable of future meetings had been prepared. RUSSIA CREDIT TERMS The Board noted a proposed credit exposure risk policy. -3- BD 10093