British Equity Collecting Society Limited
BRITISH EQUITY COLLECTING SOCIETY LIMITED
Company No: 3547531
MINUTES of the Eighteenth Annual General Meeting
of British Equity Collecting Society Limited (“the Company”)
held on Friday 2nd December 2016 at 13.30
in the National Film Theatre Auditorium 3 (NFT3) at BFI Southbank,
Belvedere Road, London SE1 8XT.
Welcoming remarks from the Chair
Jean Rogers, as Chairman of the Board, welcomed members and guests to the 18th Annual General Meeting of the Company.
It was now eighteen years since Equity formed BECS to cover the collection and distribution of payments which the Union itself was not able to do with some members of the current Board being first appointed when the decision was made to set up BECS.
Following new legislation, changes were in the air for both Equity and BECS, but the commitment to maintaining a strong collective management organisation to represent the interests of BECS’ members remained.
The Chairman noted that 89 Members were present at the AGM and 265 duly completed Proxy forms had been completed and returned before the published deadline.
The Chairman introduced the other members of the Board outlining the way in which the 12 members were appointed: 6 Board members had been nominated from Equity Council (Maureen Beatty, Ian Barritt, Bryn Evans, Louis Rolston, Nicholas Fletcher and Andrew Macbean);Steve Kenis has been nominated by the PMA with Fred Reed present as his alternate; and Peter Barnes had been nominated by CPMA. 3 Board members had been elected from the BECS’ membership, herself, Frederick Pyne and Natasha Gerson. Andy Prodger, the Chief Executive was the final member and only executive member of the Board.
The Chairman also introduced the staff of BECS also present at the meeting and following housekeeping notices moved to the business on the Agenda.
Ordinary Business – Section A
1. To receive and approve the Minutes of the previous Annual General Meeting held on Friday 2 December 2015.
The Chairman asked all present whether they wished to raise any comments of corrections to the Minutes of the 2015 Annual General Meeting. No issues were raised and the members present were then invited to approve the Minutes.
The resolution to approve the Minutes was proposed by James Smith.
The proposal was seconded by Lionel Guyett
The Minutes were approved by the members present subject to two abstentions.
2. To receive the report of the Chief Executive on the activities of the Company and the Governance Review undertaken to reflect legislative changes implemented from April 2016.
Andy Prodger welcomed members and guests to the meeting and explained that the format of the business to be conducted was slightly different to previous years, primarily due to reflecting legislation and new Regulations which had been implemented from 10 April 2016.
The purpose behind the Regulations and the way in which they transposed EU Directive provisions was to underpin a level playing field for the operation of Collective Management Organisations not only in the UK but throughout Europe.
He explained that it had been a difficult year for the Company and much had been done to manage the way in which the Company would do business in the future. This would not have been possible without the dedication and support of the Board and BECS Staff members. The changes had been unsettling for staff, but their work had been magnificent.
Doremy Vernon asked whether the Chief Executive would give concrete plans for the operations of the Company as part of his presentation. She was concerned to understand how much the Company would lose as a result of the termination of the distribution activities the Company had previously undertaken as agent for Equity. How will the Company keep going because of this change?
Andy Prodger responded by explaining the Board was still looking at those plans and that negotiations were still on-going with the Union with the hope of retaining some work. However, it was expected that, subject to the on-going good relationships with our sister CMOs with whom BECS had bi-lateral agreements, together with the support of the members with regard to future commission rates, the activities of the Company would be sustainable.
James Smith asked whether the changes facing the Company and the constitutional changes put to the meeting had come about specifically from changes to the law.
Andy Prodger confirmed that the constitutional changes were driven by changes to the law. Policies reflecting the changes were also to be presented to the members for approval as part of the business of the meeting.
Anthony Forrest suggested that it was important for members to know what the Company would be doing as a result of the changes.
Andy Prodger confirmed that staff size would reduce and consideration needed to be given to the appropriate nature and size of accommodation required for the Company. The Company was clear about the work that it would be undertaking in respect of statutory payments, but careful consideration was being given to the way in which services to members would be supplied effectively in the future.
The practical reality was that the Company was facing a cut in commission and income of around two thirds and whilst the Board believed that the company would remain viable, there would be a need for change. Additionally, it was the view of the BECS Board that a fully functional CMO representing audio visual performers in the UK was vital if performers were to be fully represented in a way that delivered the additional payments that only BECS was able to secure.
Lionel Guyett suggested that the BREXIT process might mean that the Company faced further changes to the Regulations governing the Company’s activities and that this should be anticipated.
The report of the CEO was noted.
3. To receive and consider the Directors’ Report and Financial Statements of the Company for the year ended 30 April 2016 and the Auditor’s Report thereon.
The Chairman invited Tayyiba Nasser to present the Directors’ Report and Financial Statements.
Tayyiba Nasser referred members to the breakdown of Company revenues set out in detail within the draft Transparency Report, circulated to members in addition to the Financial Statements.
It was important to note that Fee income and Commission income from the activities of the Company acting as agent for Equity amounted to over 70% of turnover. Administration charges for the collection and distribution of statutory Performers’ revenues amounted to £152,301.
Bank interest and investment income receivable were modest due to low interest rates and application of a risk averse investment policy.
Expenses were down to £913K from £1,015K in the previous year.
Nevertheless, the Company had reported a loss on ordinary activities before taxation of £93,240 for the year. This should be considered against the Company holding current assets of £16.3m and reserves of £612K with current liabilities at the year-end reported at £14.5m.
Phil Clark of Moore Stephens LLP, auditors for the Company was then invited to report on the Audit.
Phil Clark noted that members had raised questions about the future, but his audit report related to what had happened during the Financial Year ended 31 April 2016.
The audit had raised no problems, but it was a major concern that members are safeguarded and that changes are carried out in a transparent manner.
The systems operated by the Company for financial controls were robust and a clean audit report had been provided to the Board.
In assessing the auditors’ requirement to look at whether the Company was a going concern, the test was whether the Company was in a position to operate for twelve months from when the accounts are approved. Phil Clark reported that the Auditors of the Company believed plans to address changes were in place and that it was not necessary to qualify the audit report on the matter of going concern.
Phil Clark thanked Tayyiba Nasser for her support and accuracy in responding to the audit process.
Questions on the Financial Statements were then invited from members.
Jonathan Coy was concerned that the Company had recorded year on year losses against a background of staff costs increasing.
It was explained that losses had been covered by reserves held by the Company. To enable break even budgets to be prepared going forwards, it was recognised that overheads would have to be reduced. Additionally, the CEO pointed out that the Company was a not for profit organisation created for the benefit of performers not share-holders. As such, it was not the Company’s policy to make a profit but to operate close to break-even allowing a small reserve to be built to create stability. This had been achieved with a small profit being recorded in 2014, 2013, 2012 and 2011 amounting to over £330,000. The post-tax losses in 2015 and 2016 will amount to less than £70,000 as BECS will be able to recoup taxes paid on profit made in previous years.
The Chairman noted that, against the financial results, considerable investment had been made by the Company to secure a new distribution system. Some £660k had been invested in the system’s development required to replace a legacy system that was 16 years old and proving to be unreliable.
During the financial year 2016/17, the budget for overheads had been significantly reduced including a significant reduction in staff pay. Additionally, the Board were working on a provisional budget for 2017/18 where that trend will continue including a required reduction in Executive pay.
The Chairman then asked for a proposer and seconder for the resolution to approve the Directors’ Report and Financial Statements for the year ended 30 April 2016.
The resolution was proposed by Seb Craig.
This was seconded by Anne Clements.
The resolution was approved by the members present with two votes against and 2abstentions.
4. To consider and, if thought fit, pass a resolution that the auditors of the Company, Moore Stephens LLP, be reappointed as auditors of the Company to hold office from the conclusion of the meeting until the Annual Report and Financial Statements are next laid before the Members, and that their remuneration be determined by the Directors.
The Chair asked for a proposer and seconder for the resolution.
The resolution was proposed by Wally K Daly.
This was seconded by Faith Hines.
The resolution was approved by the members present with one vote against and three abstentions.
SPECIAL BUSINESS
5. To consider and, if thought fit, pass a special resolution that the Articles of Association of the Company be replaced by Articles of Association of the Company in the form published with the Notice of business for the meeting (the 2016 Articles) with immediate effect of the special resolution being passed and that the Company Secretary send to the registrar at Companies House a copy of the 2016 Articles within 15 days of the special resolution being passed.
At the invitation of the Chairman, Andrew Yeates gave a brief description of the way in which it was proposed to update the Articles of Association of the Company reflecting the requirements of The Collective Management of Copyright (EU Directive) Regulations 2016. These were concerned with increasing the transparency requirements for operation of Collective Management Organisations such as BECS including the formal recognition of a Supervisory Committee whose members would monitor the activities and the performance of the duties of the executive running the Company.
The resolution was then proposed by Annie Bright.
This was seconded by Jane Booker.
The resolution was then approved by all members present.
6. To pass a special resolution that the non-executive Directors of the Company shall provide the supervisory function for continuously monitoring the activities of the performance and the duties of the persons who manage the business of the Company as provided by Article 14 of the 2016 Articles.
It was noted that no Director (and therefore member of the Supervisory Committee) was eligible to remain in post if he or she became bankrupt or makes any arrangement or composition with his or her creditors generally.
The resolution was proposed by Nὂel Butler.
This was seconded by Faith Hines.
The resolution was then approved by all members present.
7. To consider and, if thought fit, pass a special resolution that the standard terms of the Membership Registration Form of the Company be updated and adopted in the form published with the Notice of business for the meeting.
The resolution was proposed by Anne Clements.
This was seconded by Prudence Drage.
The resolution was then approved by all members present.
8. To consider and, if thought fit, pass a special resolution that the Distribution Policies of the Company for the allocation and distribution of Performers’ Revenue as published with the Notice of business for the meeting be formally adopted by the Members and applied for the purposes of application of the 2016 Articles.
Andy Prodger provided background to the ways in which the recently implemented Regulations required members of Collective Management Organisations to see and approve a range of Polices applied by the Company to support its activities as a Collective Management Organisation and the way that it conducted its activities on behalf of members. The distribution policies presented for approval had been in place with the approval of the Board for some time. Details had been available to members on the BECS website.
Wally K Daly enquired about application of grading when credits might not recognise the distinction between a primary and a secondary performer.
Marilyn Cutts said that concerns sometimes arose when a performer was engaged for a production but the recorded work was not included in the final cut.
Alan Thompson recognised that the Company had to rely upon payments being transferred to BECS from other Collecting Societies. This meant that distribution rules applied by these other societies had to be recognised.
After discussion, the Chair invited members to consider the proposed resolution.
The resolution was proposed by Sheila Mitchell.
This was seconded by Alan Thompson.
The resolution was then approved unanimously by all members present.
9. To consider and, if thought fit, pass a special resolution that the Policy of the Company on non-distributable amounts in the form published with the Notice of business for the meeting be formally adopted by the Members and applied for the purposes of the 2016 Articles.
In response to a question from Sheila Mitchell, it was explained that all the Policies of the Company being presented to Members for formal approval, had been published and were available on the BECS website.
In response to a question from Jenny Goodwin, it was confirmed that BECS’ Policy on Investment applied and governed any investment of “Undistributed Funds” as described in the Policy on non-distributable amounts.
The Chair then invited the members to consider the proposed resolution.
The resolution was proposed by Marilyn Cutts.
This was seconded by Alan Thompson.
The resolution was the approved by members present with two abstentions.
10. To consider and, if thought fit, pass a special resolution that the Investment Policy of the Company in the form published with the Notice of business for the meeting be formally adopted by the Members and applied for the purposes of application of the 2016 Articles.
Andy Prodger introduced the proposal and outlined how the Investment Policy set out the current prudent approach to investment and the treatment of investment income outlined in the Policy.
The resolution was then proposed by Nὂel Butler.
This was seconded by Seb Craig.
The resolution was then approved unanimously by all members present.
11. To consider, and if thought fit, pass a special resolution that the Policy on Deductions of the Company (including provision for payment of management fees) in the form published with the Notice of business for the meeting be formally adopted by the Members and applied for the purposes of application of the 2016 Articles.
Andy Prodger introduced the proposal and referred to the way in which the Policy set out the process for Board approval of the budget for operation of the Company and the recoupment of approved budget expenditure.
The resolution was then proposed by Lionel Guyett.
This was seconded by Anne Clements.
The resolution was then approved by the members present with one abstention.
12. To consider, and it thought fit, pass a special resolution that in applying the approved Policy on Deductions of the Company, the management fees which may be deducted by the Company from sums collected by BECS as Performers’ Remuneration may, by agreement with the Collective Management Organisation from who the payments are received, be up to ten per cent of the monies processed to meet the distribution costs of BECS within approved budgeted costs.