Tobacco Documents Online

/NCORC011A1[D TOBACCO-CIGARETTES-CiGARS 1!9 ~r~ 40-l `Se~iv oW 1B S VI F/ Minutes of the Budget Committee Meeting January 12, 1955 lii Id Present: Messrs. F. Hopewell, A. James, I. H. Peak, H. F. Temple, F. M. Walson, J. E. Bennett, J. J. Darby, G. 0. Davies and J, M. Combs. The Budget Committee met to review and approve the Operations Budget and Capital Budget for 1955. Mr. Hopewell presided. The committee approved both budgets and recommended that they be submitted to the Board of Directors for final review and appnoval. The Capital Budget was reviewed by location, and major items were explained by the responsible executives. The budget was approved without addition or del etion. A listing of 1954 non-budget items amounting to $1,483,297, was reviewed, and Mr. Hopewell stated that the number of items and the amount of money involved indicate a lack of pnoper planning, which cannot be al- lowed to continue, as it seriously reduces the effectiveness of budgetary planning. Futzrr e non-budget i tems will be subject to cl oser scruti ny and approval will be more difficult to obtain. Each schedule in the Operations Budget was individually reviewed, and responsible executives were called upon to answer questions. Mr. Davies made a detailed presentation of the 8nancing operation and showed the seriousness of the current situation. Mr. Hopewell stressed the need to defer any item which can be postponed without harm to the Company's interests, partiaxlarily through the first quarter of 1955 -while a ccuracy of the operati ors forecast is being observed. Mr. Hopewell closed the meeting with a discussion of the need for sound budgetary policies and emphasized that the cooperation of all persona present was essential for t he CompaiW t o derive maximum benefits from budgeting. The points discussed are summarized below: 1. Work sheets must show basis for estimates in sufficient detail and itemization to'provide information for intelligent approval, and for the Budget Dept. to make detailed analysis of variances during the year.

M Reasons for increase or decrease from current year's operations should be noted. 2. This year's budget meeting was held later than desirable, and future meetings will be held in December. Time schedules will be established in consultation with appropriate executives in order to consider problems which affect the availability of infb an a ti on ( su ch as new brand s, volume of s ale s, advertising and sales promotion). t After schedlle is set, it must be adhered to by all departments to enable completion of budget in time f or desired meeting date. 3. Each month during 1955, major differexi ces between actual and budget Will be discussed by the Comptroller or Budget Director with the various department managers and where necessary their superiors. The object of these disaissions will be (1) the improv ement of future budgetary procedures; (2) the exploration of avenues for expe nse control; (3) the determination that excess expenditures on "allotment" type expenses have been specifically approved; (4) the determination when expenditures are under actual if the deficiency will or will not be made up during the balanr e of the year. The size of differences on expe nses and sales may determine if the budget should be revised at a time other than the regular mid -y ear revi s ion.