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PATHWAY GROUP LIMITED
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
HELD AT
~.-ICL_HOUSE, PUTNEY, LONDON, SW15 1SW
nn
oN
THURSDAY, 25TH APRIL 1996
Present: Sir Michael Butler (Chairman)
Mr J H Bennett
Mr M Murphy
Mr A Oppenheim (Item 30 onwards)
Mr T Reynolds
Mr T K Todd (To item 33e)
Mr J White (Item 30 onwards)
In attendance: Mr R F Scott (Secretary)
Mr J Jones
Mr T Austin
Mr M Bennett (Item 34)
Mr P Seddon (Girobank)
Apologies for absence were received from Mr R Banks.
96/27 MINUTES OF PREVIOUS MEETING
The minutes of the meeting held on 15 March were
approved as a correct record and signed by the
Chairman.
96/28 TRANSFER OF SHARES & SHARE CERTIFICATES
It was noted that Girobank PLC and De La Rue PLC
had sold their shares in the company to
International Computers Limited. The share
transfers, which were not yet to hand, were
approved, conditional upon their being
appropriately stamped with transfer duty.
It was agreed that the common seal of the Company
be affixed to a share certificate in the name of
International Computers Limited for the shares thus
transferred.
96/29 DRAFT STATUTORY ACCOUNTS
The draft report and accounts for the Company for
the period ended 31 December 1995 were approved and
the Board authorised any one director to sign the
balance sheet (after making any necessary changes
for example as a result of auditors comments). The
Board also authorised the Secretary to sign the
report of the Directors and convene the company’s
Annual General Meeting at a convenient date after
the auditors had signed their Report.
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96/30
a)
Mr Bennett
b)
c)
dq)
e)
f)
Mr Bennett
96/31
a)
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MANAGING DIRECTORS REPORT
Mr Bennett reported and there was a discussion.
Points noted:-
Pathway had re-tendered to POCL/BA on Monday 22
April and was now fully compliant with the revised
ITT issued the week previously. The short
management summary in front of the Re-tender
document would be circulated to the Board.
It was noted that one of the bidders, Cardlink, had
proposed that this PFI procurement be linked with
the NIRS II PFI to produce a variety of savings.
However it was noted that this initiative was
unlikely to go forward.
Mr Todd had written letters assuring the customer
of full ICL support for Pathway. The Chairman was
writing to Mr Hesletine with copies to other
ministers to make sure the Government were fully
aware of Pathway’s solution.
On the delivery side, Pathway staff were in Boston
working with Escher to understand the Escher
software. Good progress was being made.
Pathway had developed a suppliers forum, meeting
monthly, for the 15 or more suppliers involved.
This was being used for communication and would
later be helpful across the whole business front.
Over the next three months it was planned to
recruit an extra 40 or so people. Permanent posts
were being filled if possible from ICL.
Mr Bennett proposed that if Pathway won the
procurement, the Company should move offices to a
building in the Thames Valley/M4 corridor. Staff
were at present in three locations in Feltham and
the accommodation was otherwise unsuitable.
However the Board felt that a move at the crucial
time indicated could be a distraction. Mr Bennett
would talk to Mr Pyle of ICL about Pathway’s needs,
to see if some ICL Group staff in Feltham could
themselves be moved to allow Pathway to expand
here.
SALES UPDATE
Mr Jones reported and there was a. discussion.
Points noted:
Our intelligence on the competitors offerings,
indicated Pathway was well placed both in price and
customer preference. (Further intelligence since
the Board Meeting has shown that Cardlink and
Pathway’s prices are now very close, and that
Cardlink may indeed be lower.)
minutes/Grp.250496 Page 2
b)
c)
Mr Bennett
Mr Bennett
q)
Mr Bennett
e)
Mr Bennett
Mr Bennett
£)
96/32
a)
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Pathway were working with ICL on possible linkages
with databases held by the DSS and elsewhere, to
reduce fraud in particular. The Chairman and Mr
Todd would try to develop this point at a meeting
with Mr Mathison of the Benefits Agency.
There was a discussion on publicity, where it was
noted that the customer would wish most involvement
with the media, keeping Pathway in the background.
It was agreed that we would have appropriate Press
Releases ready together with possible questions and
answers, all prepared with the help of Mr Cheetham
of ICL, and to be in place one week before the
expected announcement date. A brief would also be
prepared for the Board and others, to enable a
co: stent line to be taken by Pathway. All this
material would be cleared by the Chairman before
issue.
Mr Bennett would begin to work on plans to handle
marketing/liaison with the customer and with POCL’s
customers such as Royal Mail and Parcelforce in
particular, whilst respecting the provisions in the
contract and POCL’s own position on the matter.
A review of possible business opportunities for the
Pathway solution, beyond the presently intended
customer, had already indicated a great deal of
interest. The problem was more to avoid being
distracted than to seek out new leads. Mr Todd
emphasised the importance and high priority of
Pathway to ICL and it was acknowledged that the
first priority was to make the solution work for
this customer. Mr Bennett and Mr Oppenheim however
should spend sometime on the strategic
possibilities outside the UK, and develop an
approach with the assistance of Mr Murphy in
particular, keeping the Chairman advised.
The activities of the French owned "Cashstop"
organisation which offered a service for paying
utilities bills in particular, were noted.
FINANCIAL DIRECTOR’S REPORT
Mr Oppenheim reported and there was a discussion.
Points noted:
The award was expected around 15 May, possibly to
be announced by Peter Lilley at a sub-postmasters’
conference. Parallel activities beginning then
included agreement on functional specifications,
finalisation of release strategy, service
definitions and acceptance criteria. A limited "go
live" test was planned for September followed by
detailed integration and test of all end-to-end
components prior to user acceptance tests in Q1
1997. The target start date for commencement of
rollout remained July 1997 completed in December
1998 for Counters and July 1999 for Cards. The
contract end date would now be February 2005. This
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Mr Bennett
Mr Oppenheim
Mr Oppenheim
96/33
Mr Bennett
b)
c)
dq)
e)
f)
a)
b)
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factor has been taken into account in repricing for
the re-tender and Mr Oppenheim said that the
revised business plan showed the contract would. be
profitable.
Mr Bennett would review the manpower plan for
Pathway with Messrs Sillitoe and Berry of ICL. Mr
Todd said ICL placed great priority on Pathway and
if Pathway required any particular skills or
individuals whom the rest of ICL Group would not
release, then Mr Bennett should refer to him.
The negotiations with the customer prior to the re-
tender were noted and it was a cause for
satisfaction that the new ITT had adopted the
Pathway timetable.
The position on funding was noted. The Chairman,
Mr Todd and Mr Oppenheim would meet to decide on
the way forward.
Mx Oppenheim said the work which Pathway had done
on risks had so far been very successful with only
four "B2" risks left - relating to fraud. It was
believed the customer would regard this as
satisfactory. Work continued on defining and
refining Pathway’s own approach to its own Risk
Register.
Mr Oppenheim would now prepare Board Reports based
on Pathway as a Project, and would also monitor
cashflow on a daily basis, reporting periodically
on this. He would also report profit and loss
effects for the ICL Group, including forecasts to
ICL.
PROGRAMME PLANS
Mr Austin reported and there was a discussion.
Points noted:-
Mr Austin reminded the Board of the proposed
solution which could be seen in three "layers". An
Post, Escher and Pathway were relatively confident
that the Post Office layer would work
satisfactorily from early on but the interfaces
between the TMS layer and the Central Services
layer were causing concern. Mr Austin was
working on this as a high priority, he would liaise
with Escher in particular.
The schedule summary was noted and Mr Austin
explained the proposals for the first operational
trial beginning in September. This would involved
payment of one benefit - child benefit - to 1500
recipients through ten Post Offices in Stroud,
Gloucestershire.
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ec) Mr Austin explained the matters he was currently
focusing on which included the detailed programme
plan, finance and manpower resources and the
operational trial. The post award priorities were
noted, particularly the need to settle the
functional specification.
d) Mr Austin explained the top ten risks which he saw
at present.
e) The Board discussed the security of the solution
and Mr Murphy explained the very high security
features embedded in the Esher software. These
were very much state of the art although there was
some delay in the customer accepting this, mainly
because being non-UK elements were unfamiliar. The
Chairman offered his assistance in arranging a
Mr Bennett meeting with, for example the head of GCHQ, if the
8 customer continued to delay.
96/34 RISK REGISTER
Mr M Bennett gave a presentation explaining the
final risk register and the risk process and
analysis.
He explained the key risks on the commercial,
technical, developmental and operations fronts.
Pathway continued to work for greater definition of
the risks and to put mitigation plans in place.
96/35 DATE OF NEXT MEETINGS
The next meetings would be held between 5 and 7pm
on 22 May at ICL Beaumont, Old Windsor and between
2.30 and 4.30pm on 27 June at ICL, Putney.
The Secretary would fix dates for Board meeting for
the rest of the year from late July onwards,
including August, which would be a critical time
leading up to the first test.
Unfortunately the June date had not been suitable
for the Chairman but he had kindly agreed the
change his arrangements accordingly, since this was
the best date for all the other members of the
Board.
_GRO I
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