Shared Interest Society Limited
Annual General Meeting Friday 11th March 2016
AGM Minutes The meeting was held at the Northern Stage, Barras Bridge, Newcastle upon Tyne, NE1 7RH commencing at 10.30 AM Mary Coyle, Chair of the Board, moderated this meeting and welcomed 77 members plus their guests and other staff (who are not members of the Society) to the meeting. Patricia Alexander, Managing Director, presented a report on the Society’s activities during 2014/15. Tim Morgan, Finance Director, gave a presentation on the financial results for the year and then, along with other colleagues from the Society’s Staff Team and Directors, responded to questions from members. Question1: You talked about bad debt provision, how much bad debt has actually occurred? Answer 1: There has been very little bad debt written off as we take a very patient view and work with our customers to try to find a solution which avoids this. At the end of the financial year we make a provision for bad debts and you can find information about the breakdown of the annual charge in our yearly accounts (note 24). We currently have provisions of £2.2m against bad debts. We aim to work with producers and buyers through bad times; sometimes this actually means lending more money. We also work with other social lenders to help resolve problems and help the customers’ trade through difficulties. The total amount of bad debt written off for good was actually in the tens of thousands of pounds. Question 2: Why do we pay interest to borrow our own money? Answer 2: This approach, which we have used for a number of years, reduces exchange rate exposure. We lend about 80% of facilities in US Dollars and a further 15% or so in Euros. We borrow the currency against our own Sterling deposits, lend it out and then when it is repaid we pay off the currency loan. This avoids us having to “speculate” in terms of exchange rates for the capital element of the loans and facilities we make available. There is of course an (increasing) interest cost for borrowing our own money but the volatility of routinely converting our capital into different currencies to lend, would be much more risky. Holding some funds in different currencies may, however, be something we need to consider in the future. We have looked at converting and holding some investment in Dollars and/or Euros. We did ask members through the members’ survey how willing they would be to have their investment converted into dollars and the response was largely against this strategy. Question3: How many current potential borrowers are there and how much would we have to raise to meet this demand? Answer 3: We currently have a pipeline of £10m potential opportunities. It is important to remember that we must maintain some liquidity to protect our investors’ money and ensure they can withdraw money during normal conditions when required. We aim to lend about 70-80% of our Share Capital at any one time. The new Lending Team structure has been very successful and we are now getting to a
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