Tobacco Documents Online

. S ITEM 2.5 S. C. ARTHUR ANDERSEN & CO. C. V. Av. DEa ARTe 56 1040 BRUXELL.F:S K U N S T L A A N 5 6 1040 B RUSSEL Mr. J.M. Hartogh August 25, 1980 Vice-President Corporate Affairs Philip Morris Brillancourt 10 CH-1006 Lausanne Dear Mr. Hartogh, Upon your request we have reviewed the reasonableness and the acceptability of the new system, which you developed, for computing the financial contribution to ICOSI by its member companies. According to this new system, the six member companies would share equally in the costs of operating the secretariat. These costs would include salaries, social charges and related expenses of employees on ICOSI's payroll, (with the exception of the proposed regional coordinators and their secretary/ies), office occupancy costs and other office operating expenses. Program costs, which include the expenses incurred under approved action plans and the costs of the regional coordinators and their secretary/ies, will be supported by the member companies on the basis of their total annual tobacco sales value, net of any value added taxes, excise taxes or other local taxes and duties. These sales amounts will be made available to Arthur Andersen & Co., which firm will compute each member company's contribution. It is understood that it is the tobacco sales value of the preceeding bookyear (12 months figures) that will be included in the determination of the current year's contribution to ICOSI. The amount of sales value will be recomputed in U.S. dollars by Arthur Andersen & Co. using the yearly average of monthly average exchange rates on the New York Exchange Market. ~' (02) 513. (34. 36 Telex 21678 Artand•B R.C.B. - H.R.B. 422.175 T.V.A. - B.T.W. ' 410.70£1.7£13

S. C. ARTHUR ANDERSEN & CO. C. V. 2 We have obtained from the member companies the net tobacco sales values listed below, for the last book-year, which we translated into U.S. dollars. Based on the assumptions explained above, we calculated that the percentage contribution of the member companies for 1981 would be as follows (000's omitted): Amount in Translated amount in Company Currency Foreign Currency U.S. dollars 7. B.A.T. Industries Ltd £ 1,728,400 3,669,393 26 Imperial Group Ltd £ 559,400 1,169,146 -8 Philip Morris Inc. U.S.$ 3,455,354 3,455,354 25 Reemtsma GmbH DM 1,100,000 605,000 1 4 R.J. Reynolds Industries U.S.$ 3,245,000 3,245,000 23 Rothmans International £ 1,000,000 (1) 1,940,000 14 Ltd 14,083,893 1:00 (1) This amount was transmitted by telephone and was communicated as best estimate for the year. - Very truly yours, _C.