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ITEM 8 PROGRAMME & BUDGETS 1981 8.1 Under normal circumstances, a Board of Director's meeting held at this time would be presented with a complete programme and budget for the whole of the coming year. As we are sure all the member companies realize, this is just not possible at the moment as far as the Secretariat Administrative/Operational Budget is concerned. There are too many variables and too many unknowns. For example: - The timing of the appointment of the new Secretary General and the various things this will bring in its train,such as the possible relocation of the Secretariat and the engaging of new full-time staff. - The decisions to be taken on_the future needs of the Information Service project, such as the cost of hardware and software, and the staffing up of the Information Section within the Secretariat. - The possible future adoption (or not) of the proposal for Regional Coordinators on the staff of the Secretariat. 8.2 However, since operating funds will be required as of January Ist 1981, we have prepared an estimate for the first quarter only. This is based partly on recent experience and partly on the first quarter T of 1980. And we have assumed that a new Secretary General will have been appointed by then. 8.3 We propose that the budget for the rest of 1981 be prepared by the new Secretary General and presented for approval at the next meeting of the Board of Directors which, under Item 9 of this Agenda, we are suggesting should be in early February. 8.4 The 1981 Budget Summary follows on the next page. The Secretariat Administrative/Operational Budget for the first quarter only is $ 348'000. The Programme Budgets are those proposed by the Working Party Chairmen and are for the whole of 1981 and total $ I'356'000. We are proposing that a Board of Directors' Reserve be included as before and at the same figure of $ 300'000.

ITEM 8 PROGRAMME & BUDGETS 1981 (cont) 1981 BUDGET PROPOSALS SUMMARY I SECRETARIAT ADMINISTRATIVE/ OPERATIONAL BUDGET $ JanI-Mar3i only I Salary & allowances - Secretary General I00'000 2 Salaries - full-time staff 50'000 3 Travel 20'000 4 Entertainment 5'000 5 Meetings 3'000 6 Office occupancy(rent,charges,utilities) 25'000 7 Office supplies 5'000 8 Communications 20'000 9 Professional fees 25'000 IO Car expenses 5'000 II Freight/Postage 2'000 12 Bank charges I'000 13 Library 5'000 14 Difference on exchange 5'000 15 Information Service Project 35'000 16 Depreciation I0'000 17 General reserve 32'000 SUB-TOTAL 348'000 JanI-Dec3I II PROGRAMME BUDGETS I SAWP 664'000 2 EEC Consumerism Task Force 50'000 ~ 3 DAC (inc. Scandinavian Study) 377'000 ~ 4 Developing Countries Group (DCG) 265'000 ~ SUB-TOTAL I'356'000 Lr1 z ~ III BOA RD OF DIRECTORS RESERVE 300'000 ~ TOTAL $ 2'004'000 z 22.9.80

ITEM 8 PROGRAMME & BUDGETS 1981 (cont) 1981 Contributions from Member Companies Breakdown of total proposed budget 8.5 In order to present a practical comparison of various ways of allocating members' contributions following the percentage basis suggested in Item 2.5 of the Agenda, we have worked out members' resulting share using three different approaches. 8.5.1. Secretariat Budget equally shared. Programme Budgets and Reserve shared on the suggested percentage basis: (BAT 26%: Imperial 8%: Philip Morris 25%: Reemtsma 4%: RJReynolds 23%: Rothmans 14%). SECRETARIAT PROGRAMMES BofD RESERVE TOTAL Ist qtr only Full Year Full Year 348'000 I'356'000 300'000 2'004'000 BAT 58'000 353'000 78'000 489'000 Imperial 58'000 I08'000 24'000 190,000 Philip Morris 58'000 339'000 75'000 472'000 Reemtsma 58'000 54'000 I2'000 I24'000 RJReynolds 58'000 3I2'000 69'000 439'000 Rothmans 58'000 I90'000 42'000 290'000 8.5.2 All budgets shared on the percentage basis _ BAT 90'480 353'000 78'000 521'480 Imperial 27'840 I08'000 24'000 I59'840 Philip Morris 87'000 339'000 75'000 50I'000 Reemtsma I3'920 54'000 I2'000 79'920 RJReynolds 80'040 3I2'000 69'000 46I'040 Rothmans 48'720 I90'000 42'000 280'720 8.5.3 All budgets e qually shared BAT 58'000 226'000 50'000 334'000 Imperial 58'000 226'000 50'000 334'000 Philip Morris 58'000 226'000 50'000 334'000 Reemtsma 58'000 226'000 50'000 334'000 RJReynolds 58'000 226'000 50'000 334'000 Rothmans 58'000 226'000 50'000 334'000

ITEM 8 PROGRAMME & BUDGETS 1981 (cont) 1981 Contributions from Member Companies (cont) Breakdown into quarterly contributions 8.6 In the chart circulated by the Secretariat dated February 29th 1980, a breakdown of the three main budgets categories into quarterly contributions by the companies appears to have been established on the following approximate percentage basis: Ist Qtr 2nd Qtr 3rd Qtr 4th Qtr Secretariat Budget 25% 25% 25% 25% 100% Programme Budgets 20% 12.5% 12.5% 55% 100% B of D Reserve 10% 12.5% 12.5% 65% 100% (For reference, the February 29th Chart is included at the end of this section) 8.7 Using the same scale, the total contribution for the first quarter of 1981 would be: $ Secretariat Budget Ist quarter budgeted only = 348'000 Programme Budgets 20% of I'356'000 = 27I'000 Board of Directors Reserve 10% of 300'000 = 30'000 $ 649'200 Allocation of this $ 649'200 by companies is shown on the next page.

ITEM 8 PROGRAMME & BUDGETS 1981 (cont) 1981 Contributions from Member Companies (cont) 1981 First Quarter contributions of $ 649'200 allocated by companies 8.8 This is shown in the same three ways as the total 1981 Budget in _ paragraphs 8.5.1, 8.5.2 and 8.5.3. 8.8.1 Secretariat Budget equally shared. Programme Budgets and Reserve on the percentage basis SECRETARIAT PROGRAMMES B of D RESERVE TOTAL 348'000 27I'200 30'000 649'200 BAT 58'000 70'5I2 7"800 136'312 Imperial 58'000 2I'696 2'400 82'096 Philip Morris 58'000 67'800 7'500 133'300 Reemtsma 58'000 I0'848 I'200 70'048 RJReynolds 58'000 62'376 6'900 I27'276 Rothmans 58'000 37'968 4'200 I00'I68 8.8.2 All Budgets on the percentage basis BAT 90'480 70'5I2 7'800 I68'792. Imperial 27'840 2I'696 2'400 5I'936 Philip Morris 87'000 67'800 7'500 I62'300 Reemtsma I3'920 I0'848 I'200 25'968 RJReynolds 80'040 62'376 6'900 149'316 Rothmans 48'720 37'968 4'200 90'888 8.8.3 All Budgets equally shared BAT 58'000 45'200 51000 I08'200 Imperial 58'000 45'200 5'000 I08'200 Philip Morris 58'000 45'200 5'000 108'200 Reemtsma 58'000 45'200 5'000 I08'200 RJReynolds 58'000 45'200 5'000 108'200 Rothmans 58'000 45'200 5'000 I08'200

ITEM 8 PROGRAMME & BUDGETS 1981 (cont) 1981 Contributions from Member Companies (cont) . Timing of payment of First Quarter 1981 Contributions 8.9 Whatever is finally approved as regards budget levels and the method of allocation as between companies, it is proposed that the payment itself should be made by December 15 1980.