AGM 2013 Minutes

Shared Interest Society Limited Annual General Meeting Friday 15th March 2013

B147.3

The meeting was held at The Assembly Rooms, Fenkle Street, Newcastle upon Tyne, NE1 5XU at 11:00am on 15th March 2013.

Kate Priestley, Chair of the Board, moderated this meeting and welcomed 97 members plus their guests and other staff (who are not members of the Society) to the meeting. Patricia Alexander, Managing Director then introduced the opening speaker.

Gabriel Kamudu, Managing Director of Craft Aid (Mauritius), gave the introductory address describing the work of Craft Aid, the longstanding relationship with Shared Interest and the support which this has enabled Craft Aid to give to many people with disabilities in Mauritius over many years.

Patricia Alexander presented a report on the Society’s activities during 2011/12. Tim Morgan, Finance Director, gave a presentation on the financial results for the year and then, along with members of the Society’s Staff Team and Directors, responded to questions from members.

Question – Interested that over 30% of income ended up in reserves. Most charities wouldn’t be happy with that, what is our target?

Tim Morgan – Clarified that the reserves figure represents surpluses made over many years and is not that we have retained 30% of this year’s income. The Society aims to have at least 5% of share capital as a reserve, and currently it is about 5.7%

Question – most lenders lend with interest based on risk, does Shared Interest?

Tim Morgan – Yes, Shared Interest operates a prime rate which is linked to the currency we are lending and to this is added a risk rate which is based on an assessment of the individual customer.

Question – what are the interest rates we charge? At moment borrowing is low therefore are interest rates higher or lower?

Tim Morgan – rate calculated as previously explained but normally between 7 – 11%. At present our borrowing costs are low in historical terms but also so is the interest we can earn from deposits. The cost of running the Society has to be met from the income we generate and we seek to set an interest rate which allows this but is also competitive to the customers we work with. The graph shown in the presentation demonstrates that we have retained relatively modest sums annually for the last 5 years so are getting this balance right.

Question – we were told a few years ago that if a customer repaid a loan they would be repaid some of the interest they had been charged?

Tim Morgan – No this is not the practice. Aware that many years ago the Society did pay some rebates to customers when a large surplus had been made. This had proved very difficult to administer and confusing to customers. Members were reminded that our rules only permit very limited used of surpluses but as the answer to the first question had showed, we don’t currently hold an excess amount of reserves so this question has not arisen for some time.

Question – surprised that interest to members has been reintroduced at 0.5% rather than leaving it at 0% Patricia Alexander – raising new investment is a challenge and we are experiencing a higher rate of withdrawals. We had felt that offering 0.5% would help retain and attract new members and this was a reasonable and affordable percentage in current market conditions. She recognised that members have been very patient while we were unable to pay interest but also recognised that some

1

Shared Interest Society Limited Annual General Meeting Friday 15th March 2013

B147.3

members want interest and some are less concerned. There was a route to donate or simply waive interest should any member wish to do this.

Question - Can you explain why VAT was paid back to us and why were we not registered before?

Tim Morgan – In short, we have been able to register for VAT for the first time and recover a proportion of the VAT we pay, as most of our income comes from outside of the EU. This has been reviewed in the past but VAT rules are ever-changing. We were able to backdate our registration by four years and once our initial claim was processed we recovered VAT over that period amounting to £119,000 net of our advisors’ costs.

Question – Could you please tell people (as 11% sounds high) what alternatives there are from local money lenders.

Tim Morgan – There is considerable information on this in the social accounts. We must take care in comparisons as local lenders are usually lending in local currency (at around 20%), and it’s not always accessible to our customers.

Paul Sablich – Hard question to be definitive. Shared Interest rarely asks for security but local lenders do. Large to medium businesses may get a rate of 14% from local lenders and 9-10% from Shared Interest. Larger co-operatives may be able to better rates from commercial banks and we don’t seek to compete against these.

Comment – the questioner noted that he had lived and worked for 8 years in Botswana and felt that the Society should be congratulated on keeping bad debts to an average over the last five years of about 2.5% of lending.

Question – What is the impact of bee die off on Apicoop?

Paul Sablich – colony collapse disorder is the official term for this and generally it has not affected them. But they face other issues, they cannot control where the bees feed and if they feed on nearby non-organic crops this can be a problem for organic certification of the honey.

Question – How vigorously does Shared Interest attempt to recover bad debt and how much does this cost?

Tim Morgan – “vigorous” is probably a euphemism for something Shared Interest wouldn’t want to do in this regard! We are very patient with borrowers who get into difficulties especially where there is a good flow of information and sensible proposals are made. We have tried to recover bad debts using lawyers from the UK but challenges in overseas’ jurisdictions etc make this difficult and we have had limited success. On a number of occasions we have rescheduled debt to assist a customer in paying down over a longer period and this had proved successful, although this is not always a practical option.

Kate Priestley drew the question session to a close and asked Tim Morgan, as Secretary, to conduct the voting on resolutions and report the outcome of the postal ballots. Resolutions were approved as follows (where applicable the proxy votes were also reported and in each case were also strongly in favour of the resolutions): 1

the Society’s accounts for the year ended 30th September 2012 and the reports of the directors and the Auditor were received; (96 For, 1 Abstain, 0 Against) [Proxy votes: 999 For, 2 Against]

2

B147.3

Shared Interest Society Limited Annual General Meeting Friday 15th March 2013 2

the Society’s Social Accounts for the year ended 30th September 2012 and the report of the Social Audit Panel were received; (Unanimous) [Proxy votes: 983 For, 2 Against]

3

members indicated their satisfaction with the arrangements for determining the pay of executive directors that are the subject of the report by the Remuneration Committee in the Directors’ report; (For 93, Against 1, Abstain 3) [Proxy votes: For 930, 33 Against]

4

the firm of PricewatershoueCoopers LLP were re-appointed as the Auditor of the Society and the directors were authorised to fix the remuneration of the Auditor for the year ending 30th September 2013 (For 89, Against 3, Abstain 5) [Proxy votes: For 953, Against 40]

5

a report from the Moderator of the Council was received;

6

public declarations of support for the Society’s object from all candidates for election were received.

7

the results of the postal ballot for the election of the following members of the Society as directors for the year were received:Name Kate Priestley Keith Sadler David Bowman Martin Kyndt

8

For 1,199 1,121 1,227 1,222

Against 42 77 8 12

the results of the postal ballot for the uncontested elections of the following members of the Society as members of Council for the year were received Non-Contested Name Sue James Malcolm Nunn Rod Gilpin Liz Murphy

For 1,239 1,226 1,204 1,218

Against 17 16 31 11

The formal AGM closed at 12.40pm followed by brief presentations to Peter Freeman (leaving the Board after 10 years’ service on the Board and Council) and Stephen Sanders retiring from Council after serving six years including three as Moderator.

Members meeting reconvened at 1.40pm following lunch and attended three workshops which were run throughout the afternoon and repeated so that all could participate in each. Topics covered were Environment – where do we stand?, The Overseas Team and Shared Interest Foundation. QR 87 reports in more detail on these.

Members returned for a plenary session with two films highlighting the work and success of two producer’ customers of Shared Interest – Mpanga in Uganda and Cesmach in Mexico, linking to their buyers who are also customers of Shared Interest, Cafédirect and Equal Exchange Inc. After a speech from Peter Freeman reflecting on the positive changes over his time as a Director and Council member, Kate Priestley closed the meeting with thanks to members and thanking those who had worked to make the event a success.

Meeting Closed 16.00

3